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Kuwait okays draft law on foreign oil firms

KUWAIT: Kuwait moved closer on Sunday towards an ambitious plan to allow foreign oil majors to operate in the oil-rich Gulf Arab state, approving a draft law to govern the controversial issue.

"The cabinet approved a draft law to allow foreign oil majors to develop domestic oilfields and submitted it to the Emir Sheikh Jaber al-Ahmad al-Sabah," a government statement said after its weekly meeting on Sunday.

But the law requires approval by the country's elected opposition-dominated parliament where MPs have already criticised the government's handling of the issue.

Kuwait, whose constitution bans production sharing, hopes multinational oil firms will invest $7 billion to develop northern oilfields to double their production to 900,000 barrels per day (bpd) within five years.

Most of the world's oil majors have shown interest in the Kuwait project which has suffered several delays amid vociferous debates 20 years after Kuwait fully nationalised its strategic oil sector.

Kuwait currently has an OPEC quota of 1.98 million barrels per day (bpd) and plans to boost its production capacity by one million bpd from a current 2.4 million bpd early in the century.

Kuwait sits on almost 10 percent of the world's proven oil reserves.-Reuters