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KUWAIT CITY, Dec 5: It seems the effects and repercussions of the COVID-19 pandemic have started to appear in the oil sector. A controversy has erupted between Kuwait Integrated Petroleum Industries Company (KIPIC) and Al-Zour Refinery contractors over claims for contractors amounting to KD 500 billion, reports Al-Rai daily quoting informed sources. They explained that KIPIC is still negotiating with the contractors in Al-Zour Refinery project packages regarding claims of about KD 500 billion, under the pretext of delaying the implementation of the project due to the pandemic and additional work from the contractors’ point of view, and the study conducted by the company.
These claims are still within the concerned parties, and revolve around the delay of the contractors in implementing the project due to the measures taken by the state, which limited the movements of workers and the performance of works, especially the complete lockdown, which hindered the contractors from implementing the works according to the scheme. However, the question about delay before the pandemic remains. The sources went on to explain that the Al-Zour Refinery includes five packages in which the contractors’ claims vary. The total of these claims is estimated at half a billion dinars or more.
The reasons given were the length of time according to the procedures followed at the time, the difficulty in recruiting workers from abroad, and other consequences associated with the government procedures because of which they had no income, but in the end affected their performance according to their point of view, and also the additional work on which they depend and assert their entitlement. Negotiations are continuing with the contractors to find solutions before escalating these claims to the concerned authorities in accordance with the contracts concluded with them.
On the other hand, there will be reciprocal claims from KIPIC for the late contractors in accordance with the contracts as well, considering that it is best to reach consensual solutions, especially since the COVID-19 pandemic and its subsequent procedures are considered a force majeure on everyone including the company and contractors. On the other hand, the sources affirmed that the liquefied gas facilities are witnessing millions of claims to contractors that are still under negotiation. They stressed that all these claims are dealt with in a manner that guarantees the interests of the company and the preservation of public money as well as the rights of the contractors, adding that the contracts are carefully acquainted with the rights, obligations, and duties of each party.