10/02/2026
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10/02/2026
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KUWAIT CITY, Feb 10: In view of the plan of Kuwait Petroleum Corporation (KPC) to invest $65 billion to raise oil production capacity to four million barrels per day by 2035, and the launching of the ‘Shaheen’ project—which allows foreign investment in the Kuwaiti oil pipeline sector owned by Kuwait Oil Company (KOC), the oil, economic and legal experts clarified that the project to lease portions of Kuwait’s crude oil production and export pipelines does not mean the foreign companies will share ownership of the natural resources of the country.
According to the experts, this is evident in the fact that the lease agreements will be limited to a certain period in accordance with Article 21 of the Kuwaiti Constitution. They stressed that KPC will not permit any international company to own even a single drop of Kuwait’s oil production. Oil expert Hajjaj Boukhadour explained that KPC’s move toward a financing mechanism based on a ‘lease or leaseback’ arrangement for part of the local pipeline network— valued at up to $7 billion— falls within the framework of asset monetization to enhance financing, rather than constituting any form of partnership in ownership of oil wealth. He pointed out that the proposed structure of the project grants investors a fixed-term contractual right in exchange for financial returns, while Kuwait retains full ownership and operational sovereignty within the announced framework.
He confirmed that this strategic project is in line with the development objectives of the oil sector under Kuwait Vision 2035 and the 2040 strategy of KPC, with the aim of improving the efficiency and resilience of infrastructure in the midst of geopolitical risks. Regarding claims that leasing Kuwaiti oil pipelines is intended to secure alternative export routes in the event of regional conflicts, he stated that discussions about alternative export options in the event of disruption to the Strait of Hormuz remain a strategic option “under study and development,” and have not yet reached the stage of a finalized or announced plan. Economic and legal expert Adhbi Al-Tahnoon said the current debate surrounding the leasing of KPC’s oil pipelines is an implicit and indirect form of participation.
He explained that the rental value—expected to be determined during the project’s development— will be considered part of the revenues generated from the operation of these pipelines. He added that one of the main objectives of this implicit participation is to strengthen international and political agreements between KPC and major global powers, particularly since some international agreements restrict the production of certain petroleum derivatives. “Accordingly, leasing the pipelines is necessary to avoid breaching such agreements,” he elaborated. He stressed that the project to lease some of Kuwait’s oil pipelines was examined from a legal standpoint to ensure full compliance with the Constitution and to prevent constitutional violations.
He reiterated that the project does not contravene Article 21 of the Kuwaiti Constitution, which stipulates that “all natural resources and their sources are the property of the State, which is responsible for their preservation and optimal utilization, taking into account the requirements of national security and the national economy.” In the same context, a reliable oil source told the newspaper that KPC will remain the unwavering guardian of the nation’s oil wealth and will not allow any international company to own or participate in a single drop of the oil production of the country.
The source added that the issue of leasing Kuwaiti oil pipelines has been raised repeatedly in recent years, particularly given that the pipeline network of the Kuwaiti oil sector is interconnected through multiple routes linking northern oil fields with western fields, as well as connecting them to the refineries of Kuwait National Petroleum Company (KNPC)— Mina Abdullah and Mina Al-Ahmadi—along with Al-Zour refinery, which currently falls under the Kuwait Integrated Petroleum Industries Company (KIPIC) and is set to be merged with KNPC following the announcement of the final stages of the merger.
The source emphasized that the oil and gas pipelines operated by KOC meet international standards, with diameters of 48 inches, and that they transport single-stage well flow lines with manifolds and an expected operational lifespan exceeding 25 years. He added the study conducted on leasing these pipelines did not classify the project as a sale of Kuwait’s natural resources, or any portion thereof.
“Rather, it strictly concerns the leasing of some—but not all—of the pipelines, in a manner that will generate additional financial returns for the corporation,” he explained. He revealed that one of the important objectives identified by the feasibility study is to attract foreign investment into the oil sector through leasing rather than selling, while maximizing sector revenues and maintaining the current level of operational oil production at KOC without any changes.
By Najeh Bilal Al-Seyassah/Arab Times Staff
