KUWAIT CITY, Oct 12: Kuwait Petroleum Corporation (KPC) and its subsidiaries have started implementing the Kuwaitization policy in terms of reducing the number of expatriate employees with the aim of increasing the number of Kuwaiti employees to 90-95 percent, reports Al-Anba daily.
According to an official statistics, the oil sector has terminated the contracts of 1,085 expatriate employees and replaced them with Kuwaitis in both technical and administrative departments. Expatriates have been most affected by the crisis that emerged in July 2014 when the oil prices fell from $108 per barrel to less than $19 per barrel.
Oil companies ended the contracts of 500 expatriate employees in the last two years. Kuwait Oil Company (KOC) had the biggest share of contract termination in the oil sector with the ending of 620 expatriate employees’ contracts in the last ten years.
Kuwait National Petroleum Company (KNPC) ended the contracts of 165 expatriate employees, replacing them with Kuwaitis. The Petrochemical Industries Company nationalized 105 positions. In the recent years, Kuwait launched a number of huge oil projects worth billions of dinars, which resulted in the recruitment of huge number of expatriate laborers mostly from poorer countries in the Middle East, South Asia and South East Asia.
The oil companies were obligated to sign contracts with local and international contractors in order to fill thousands of vacancies especially in the oil engineering, operations and maintenance sectors. The companies later decided to dispose these expatriate employees or reduce the financial benefits offered to them.
The rate of expatriate employees in KPC reduced from 16 percent in 2007/2008 to two percent, which led to increase in the rate of national employees to almost 98 percent. In KOC, the rate of expatriate employees was reduced from 21.5 percent to 12.5 percent.
In KNPC, the rate of expatriate employees reduced from 20.5 percent to 11.13 percent. In the Kuwait Gulf Oil Company, the rate of expatriate employees reduced from 16 percent to 5.2 percent. According to the Central Statistical Bureau, the total rate of expatriate employees in the oil sector is six percent, which is more than 1,000 employees. With the implementation of Kuwaitization policy, about 700 expatriate employees will be dismissed.
The total amount offered as salaries in the oil sector is currently KD 1.5 billion, which is expected to increase to KD 2.3 billion within the next five years as a result of increase in the number of employees to 25,000.