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KUWAIT CITY, Jan 31: Oil sources have warned that Kuwait will lose about USD 10 billion of its oil revenues within a year, unless a funding of at least one billion dinars is available for KOC projects in order to maintain the country’s oil production at its current levels, reports Al- Rai daily. They said, “If the required funding is not available, production will decrease by 200,000 barrels per day during the first year. Multiplying that amount of the decrease by the price of USD 80 per barrel means a loss of about USD 10 billion for Kuwait in 12 months.”
The sources affirmed that, in light of the supply of the profits of the oil sector to the state and the lack of sufficient liquidity, KOC projects have become at stake, and the impact of the oil sector on the scarcity of liquidity will be reflected in the implementation of projects and their returns. They explained that one of the most viable solutions to achieve financing stability for the projects requires restructuring the economic structure of the company’s capital projects. What Kuwait Petroleum Corporation (KPC) spends on KOC projects comes from KPC’s profits from all its sectors, given that oil production projects are the basis for billions of revenues, which will eventually go to the state budget.
The sources asked, “After transferring the profits to the state treasury, where is the spending on the strategic projects of KOC that generate billions of revenues? How is it spent on production conservation projects? How to recover what was spent on these projects?”. They said, “The talk about recovering the expenses of KOC from the profits of all its sectors on productive KOC projects during 25 years can be considered as a fantasy. How much is the value of the dinar that is spent today on projects after 25 years?”