Last updated: 18 August, 2011

Kuwait orders probe into contract with Shell

Kuwait’s Oil Minister Mohammad al-Baseeri Thursday formed a committee to probe an $800 million contract between state-owned Kuwait Oil Co. and Shell, an official statement said.

The six-member panel will review procedures leading to the awarding of the Enhanced Technical Services Agreement in February 2010 and examine the implementation of the deal, said the statement cited by the KUNA news agency.

The contract was awarded to Shell to help the oil-rich emirate to develop its newly-discovered non-associated natural gas fields in the north of the country after initial production hurdles.

Kuwait plans to produce around one billion cubic feet of free gas by 2016 up from the current modest output of 140 million cubic feet.

A parliamentary probe panel has been investigating the same deal for the past few weeks after MPs in June raised questions about how the contract was awarded to Shell without competition.

The parliamentary committee is due to hold a crucial meeting with KOC officials next Tuesday.

Kuwait is rich in crude oil but poor in natural gas, which it needs to operate its power plants and petrochemical industry. It has imported several gas shipments from international companies in the past three years.