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Monday , September 26 2022

Kuwait oil industry in need of cost reductions, not more recruitment

This post has been read 12277 times!

ALAS! This is not the case in reality, as we are just opting for further employment without caring for the increase in the cost per barrel, especially since Kuwait is not moving ahead with its increase in crude oil production and is still stuck at 2.80 or 2.9 million barrels per day. This is far away from its original production strategy of reaching a production level of between 3 million and 3.5 million barrels per day. What is the point in hiring low paid workers with low technical know-how, or in recruiting new Kuwaitis? For the more sophisticated industry of refining, less employment is required, as a maximum of 300 top engineers is enough to run our updated three refineries.

Kamel Al-Harami

These can in fact be run by fewer staff if we take into consideration Kuwait’s experience which is pioneer in this sector. We were the first country among the OPEC member states and the Gulf and in the Middle East to own and build its refinery back in 1966.

Our government believes that it can hire and recruit about 1,000 Kuwaitis for each refinery. It is unaware that this action will have a negative impact on our refining economics and outcome, and cause loss and unacceptable return for the wealth of the nation, which is oil. Oil is the wealth of every citizen. Hiring a few into our industry and causing loss is not an acceptable solution or economically viable one. Kuwait has to create about 30,000 to 35,000 job opportunities for our new graduates; but putting them where they are not needed and causing losses is not the solution. In fact, this could be labeled as discriminatory action, bearing in mind that most of the recruitment is done through personal contacts or “wasta”, which is not applicable to the rest of potential candidates.

Oil sector is not the right place for hiring new graduates. The government needs to focus on updating the sectors of infrastructure, education, health, and roads, as they need more manpower, by thousands actually. At the same time, it does not cost the nation any money or it will not have to bear losses to ensure returns on our valuable investments of billions of dollars. Our industry needs to run its business on a profit and loss basis, instead of being burdened by hiring and recruiting our nationals for the sake of expensive and costly employment.

By Kamel Al-Harami Independent Oil Analyst
email: naftikuwaiti@yahoo.com

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