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KUWAIT - Decision Makers: Ahmad Rashid Al Arbeed.

The Chairman and CEO of Kuwait Oil Company (KOC), Arbeed took up this position in 2001 from Abdel Latif Hamad Al Torah. Until then, Arbeed used to be chairman and CEO of Kuwait Foreign Petroleum Exploration Company (KUFPEC). Now KUFPEC's Chairman and CEO is Badr Al Kashti.

Under Arbeed, KOC has been transformed from a functional entity into an asset management company, with E&P operations in Kuwait's northern and western oilfields eventually to be undertaken by international oil firms (IOCs) under long-term service contracts. KOC will only operate the fields within the Greater Burgan area.

To become more efficient and reduce delays in project implementation, KOC in February 2002 was streamlined. Seven new directorates were set up, with one for each of northern Kuwait, Project Kuwait (in which the IOCs will be the operators), western Kuwait, south-east Kuwait, E&P development, technical services, and the administration.

The Northern Kuwait Directorate is headed by Mohammed Hussein, who until early 2002 was manager of KOC's planning and fields' development department. Abdel Hussein Shehab heads the Western Kuwait Directorate. The South-Eastern Kuwait Directorate is headed by Sanad Al Sanad.

To expand its technology base, KOC as a holding company has alliances with Halliburton, Schlumberger and Microsoft. KOC's five-year project management consultant (PMC) for the northern oilfields from June 2003 is Halliburton's unit Kellogg Brown & Root (KBR). Its five-year PMC for the western and south-eastern oilfields is Fluor Daniel. From late 2001 to June 13, 2003, its PMC was Parsons Engineering Corp. All these companies are from the US.

Arbeed until 1999 used to be manager of KOC's planning and fields' development department as Torah was the company's CEO. As he returned to head KOC in 2001, Arbeed became a member of a special committee chaired by the oil minister which oversees the planned participation of foreign companies in the development of seven northern and western oilfields.

Badr Al Khashti: Succeeding Arbeed as chairman and CEO of KUFPEC in 2001, Khashti has seen this company making good profits thanks to rising oil and gas prices and increased production. Unveiling the company's latest annual report in May 2003, however, Khashti said KUFPEC in 2002 had a 46.5% fall in net profits to $46.3 million. He attributed this to increased investment spending and said he expected net profits to reach $70 million in 2003.

KUFPEC in 2000 posted net profits of about $106m, a record and up 44.4% on 1999, as revenues surged 26% to $233m from $177m in 1999. KUFPEC, created in June 1981, made its first profit in 1994, after years of sustained losses because of a sharp drop in oil prices during the 1980s.

KUFPEC's share of oil and gas production ventures overseas now averages about 34,000 b/d of oil equivalent. It is to rise to about 50,000 b/doe by 2006 and to 100,000 b/doe by 2010 (see OMT No. 24).

Saad Ali Al Shuwayaib runs Petrochemical Industries Corp. (PIC), a KPC subsidiary. In this position he succeeded Khalid Bouhamra in 2001. Shuwayaib is also member of KPC's board of director.

(Bouhamra had become PIC chairman and CEO in March 1995, when he succeeded Hani Abdel Aziz Al Hussein. PIC has been making good profit since late 1999, after major losses in previous years).

PIC and the US bulk chemicals producer Union Carbide Corp. (which in February 2001 was acquired by Dow Chemical) each holds 40% in Kuwait's olefins complex at Shuaiba run by Equate. The President of Equate is Hamad Al Terkait, who succeeded Charles Kline as the latter retired at the end of 2001. Previously Terkait used to be head of Equate's marketing department.

Equate is by far the biggest among PIC's profitable ventures in Kuwait. Equate now is having a second olefins plant built at Shuaiba, which Terkait says will be profitable (see DT No. 23).

Yousef Al Qabandi is director of Kuwait Oil Tanker Co. (KOTC). A fully-owned KPC subsidiary, KOTC has a fleet of 27 tankers. These were deployed in early March 2003 in preparations for the US-led war against Saddam Hussein's Baathist regime in Iraq.

To keep the flow of Kuwait's exports of crude oil and petroleum products uninterrupted by the war, these tankers were prepared to shuttle oil down to safer ports in the southern part of the Persian Gulf, or the Arabian Sea, for transfer to foreign tankers. At the same time, the US Navy's 5th Fleet in Bahrain advised shipping operators to continue on a "business as usual" basis until the war broke out.

The British Navy deployed several liaison terms in the Gulf and other parts of the Middle East to enhance communications with the merchant shipping community. Like the US Navy, the British were taking precautions for the war as well as for sabotage by Islamist militants.

Qabandi was particularly by the danger of sabotage and its implications for insurance rates which, he said on March 7, "went crasy". He said if the rates were to rise further, KOTC might even stop paying insurance premia for its own tankers.

However, the war began on March 20 local time and ended quickly with the fall of Baghdad on April 9. It did not affect KOTC or oil shipping along the Gulf.

Abdullah Hamad Al Roumi, who has been chairman of KOTC since 1992, is a member of KPC's board of directors. He had taken up post in March of that year to replace Abdel Fattah Al Badr, who was had been caught up in major KOTC scandals.

KOTC was established in 1957 by the private sector. It was taken over by the state in 1975, when it built up one of the largest tanker fleets in OPEC. It became a subsidiary of KPC in 1981 but has since preserved its legal status and its own board of directors.
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Publication:APS Review Downstream Trends
Geographic Code:7KUWA
Date:Jun 23, 2003
Previous Article:KUWAIT - Decision Makers - Siham Abdel Razzaq Al Razzouqi.
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