Last updated: 20 May, 2013

Kuwait replaces top chiefs in oil sector shake-up

Kuwait’s vital oil sector has undergone a major reshuffle, with new executives appointed for the subsidiaries of Kuwait Petroleum Corp, after a new KPC chief was named last week, the national oil firm said Monday.

The decisions were taken at a meeting late Sunday by KPC board of directors headed by Oil Minister Hani Hussein, replacing all the top executives of the eight subsidiaries and other KPC departments.

KPC insisted in a statement that the reshuffle was not linked to the crisis over the controversial payment of a $2.2 billion penalty to US Dow Chemical for scrapping a joint venture in December 2008.

The measures aim at “restructuring the oil sector to cope with current and future challenges,” by merging some sectors and abolishing a number of leading posts, KPC said.

“The decision came in accordance with the council of ministers’ wish to inject fresh blood in the oil sector,” according to the statement sent to AFP.

The state-owned KPC also introduced a new system under which a chairman and a managing director are appointed for each oil company instead of a managing director alone.

Among the main victims of the shake-up is the long-serving Sami al-Rasheed, managing director of Kuwait Oil Co (KOC), responsible for oil and gas exploration and production in the OPEC member. He was replaced by Hashem Hashem.

The new measures also removed the managing director of national refiner Kuwait National Petroleum Co (KNPC), Fahad al-Adwah, replaced by Mohammad al-Mutairi.

The massive reshuffle in the oil sector, which contributes 95 percent of Kuwait’s revenues, comes after Faruq al-Zanki was dismissed as KPC chief executive officer and replaced by Nezar al-Adasani last week.

Among other key changes, Asaad al-Saad, a veteran oil executive, was named managing director for the Petrochemicals Industries Co (PIC) in place of Maha Mulla Hussein, who was suspended on Thursday over the Dow Chemical affair.

Earlier this month, PIC said it had reached a settlement with Dow Chemical to pay the $2.2 billion penalty for pulling out of a $17.4 billion joint venture.

The penalty was ordered by the International Chamber of Commerce in a May 2012 ruling.

The payment caused an uproar as three MPs filed a request to grill the oil minister over a variety of alleged violations but mainly the Dow Chemical affair, sparking a political crisis with the cabinet boycotting parliament.

Kuwait, OPEC’s fifth crude producer, is pumping around 3.0 million barrels per day and says it sits on about 10 percent of global oil reserves.