Kuwait to investigate $800-mn KOC, Shell contract

The government of Kuwait has formed a committee to probe an $800 million contract between state-owned Kuwait Oil Co (KOC) and Shell.

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, the country's Oil Minister Mohammad Al-Baseeri has said in an official statement.

The statement, released by Kuwait's official news agency KUNA, said the contract was awarded to Shell to help emirate develop its newly-discovered non-associated natural gas fields in the north of the country, after initial production hurdles.

Kuwait plans to produce around 1 billion cubic feet of free gas by 2016 from the current 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 on 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.