Kuwait must foray into petrochemical industry
We all know that Kuwait is sitting on about 90 billion barrels of oil; all of it can most likely be produced at a cost lower than $10 a barrel. This is in addition to domestic and overseas joint refining operations spread over Europe and Asia which are commendable and expected to grow. However, depending on oil alone is not healthy and economically viable in the long run.
In view of the current and future growth and development of alternative sources of energy, it can threaten the status of oil in every sector. Given this scenario, we have to look for new sources of income instead of solely depending on oil, which at present accounts for 90 percent of sales.
First of all, we believe Kuwait must optimize the resources of oil and ensure it enters every economic field to enhance our income from oil to the maximum not only in refining but by producing the most competitive products that adds real value and increase our income by marketing our refined prodducts overseas.
The other field that Kuwait has missed is investing in the petrochemical industry, and products. This field has a future for the growth of oil and the extreme added value that we should not miss. Petrochemical is the future of the oil industry and we should be part of it.
This industry cannot be run alone but we have to have foreign partners who are reluctant to come, as we stated last week in our article. Kuwait should be among the leaders in this business, we should invite the Indians, the Koreans and the Chinese to participate in this new petrochemical venture since these countries are known to generate good income in this field.
These countries import oil but they exported the same back to us in many forms mostly common in plastic form and make huge profits of between $50 or 60 a barrel of crude oil. They simply convert the $60 a barrel of oil from Kuwait to get more than 200% returns on investments.
This added value should attract us and we should take it from there given our small population. Of course, it’s not an alternative to oil, but its new business with huge profits that Kuwait can avail of because of low oil prices and low demand. It is the alternative that can bring maximum benefit for a barrel of oil.
By Kamel Al-Harami Independent oil analyst