Dubai, 21 May (Argus) – Kuwait has widened the scope of its oil sector shake-up, yesterday replacing the managing directors of all subsidiaries of state-owned oil firm KPC. The reshuffle follows controversy over a $2.2bn payment made to US chemical firm Dow over a failed joint-venture.
The reshuffle at the KPC subsidiaries was in the making since a cabinet meeting on 16 May, but was only made public after oil minister Hani Hussein met with Kuwaiti ruler Sheikh Sabah al-Ahmad al-Jaber al-Sabah to discuss the changes. Hussein had already offered his resignation but has been retained in post.
The series of meetings between Hussein, the Kuwaiti ruler and prime minister Sheikh Jaber al-Mubarak al-Hamad al Sabah were held in response to the compensation to Dow over a failed $17bn joint venture with KPC petrochemicals subsidiary PIC in 2008. But Kuwaiti oil officials have repeatedly said the reshuffle is meant to “inject new blood” into the oil sector and was not related to the Dow payment.
Former chairman and managing director of KPC upstream arm KOC Sami al-Rushaid is replaced by Hashem Hashem, who was a deputy managing director in charge of KOC's south and east asset group, which includes the supergiant Burgan oil field. Hashem will only serve as the managing director of KOC however. The posts of chairman and managing director at all KPC subsidiaries have been separated as part of the reshuffle.
Assad al-Saad replaces Maha Hussain as the new head of PIC. Several members of the PIC executive body have also been suspended until the end of a legal probe into the Dow payment.
KPC domestic downstream arm KNPC sees its former managing director Fahad al-Ajmi replaced with Muhammad al-Mutairi, a young KNPC official who was in charge of the Mina al-Ahmadi refinery. KNPC's former deputy chairman and managing director Bakheet al-Rashidi replaces Hussain Esmaiel as the managing director of KPC overseas downstream subsidiary KPI.
KPC overseas upstream subsidiary Kufpec's new managing director is Sheikh Nawaf al-Sabah, who was in charge of legal affairs at KPC. Kufpec's former head Nizar Mohammad al-Adsani was named the new KPC chief executive last week. Hashim al-Rifaai, former managing director of KGOC, which represents Kuwaiti interest in the Neutral Zone shared with Saudi Arabia, was replaced with Ali al-Shemmeri who used to be part of the executive body at Kufpec.
Several Kuwaiti oil veterans at KPC and subsidiaries will likely “retire” as part of the ongoing reshuffle which will continue under oil minister Hussain's supervision. Those who have spent 30 to 35 years at state oil companies are the most likely targets. Their replacements have so far come from within KPC ranks. Some of the members of Kuwait's elected parliament have criticized the reshuffle, saying the oil minister has kept his job although he is also targeted in the allegations of irregularities that allegedly took place in the Dow payment.
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