KUWAIT: Minister of Electricity and Water as well as the Minister of Oil Essam Al-Marzouq yesterday said that Oman's Duqm Refinery has been designed so that it can receive full needs from Kuwaiti oil, by 100 percent. The minister made the statement after the Kuwait Petroleum International (KPI) and the Oman Oil Company (OOC) signed a partnership agreement for cooperation in the development of Duqm Refinery, as well as the Petrochemical Complex in the Duqm Special Economic Zone (SEZ) in Oman's Al-Wusta Governorate. The KPI and the OOC also signed in Muscat yesterday the stock purchase agreement (SPA) of the partnership company, Marzouq added.

The OOC invited the KPI to invest in the refinery project, with total capacity of 230,000 barrels a day, after the economic feasibility studies and the initial engineering designs were already completed, he said. The two sides signed a MoU in November 2016 for the 50:50 joint equity venture, Marzouq said, noting that the Kuwait oil will provide 65 percent of the refinery's needs, and that it could be increased to 100 percent.

A joint team from the two companies is now assessing the offers by contractors for the construction phase, as well as management of the refinery. They are also working with a team from the international marketing at the Kuwait Petroleum Corporation (KPC) on the final touches of agreements on the oil sale and providing the crude. The KPI is the KPC's international subsidiary, while the OOC is the Sultanate's investment arm in the energy and energy related sectors.

KPI's CEO Bakheet Al-Rashidi said the agreement would play an effective role for achieving the Sultanate's oil strategy, turning the SEZ into one of the world's major economic centers. Rashidi signed the agreement with OOC Acting Executive Managing Director Hilal Al-Kharusi in Muscat. The ceremony was attended by a host of officials from both sides.

The Duqm Refinery will be established on a total area of 900 hectares. Once completed, the refinery will have the capacity to process 230,000 barrels of crude oil per day for both local and international markets. The KPI was established in 1983 as KPC's arm for marketing and refining outside Kuwait. The state-owned OOC was established in 1996 to pursue investment opportunities in the wider energy sector both at home and abroad.

Meanwhile, minister Marzouq referred to the OPEC/non-OPEC deal to cut oil production concluded in November 2016 saying that the rate of conformity was 87 in January and 94 a month later. These are historical rates, the minister said, adding a higher one is expected for March.

In December, 11 non-OPEC oil producers cooperated with the 13 OPEC member countries in a concerted effort to accelerate the rebalancing of the global oil market through an adjustment in combined production of 1.8 million barrels per day.  A resulting Declaration of Cooperation came into effect on January 1, 2017 for six months, and is extendable for an additional six months pending the status of supply and demand, as well as global inventories.

The joint OPEC/non-OPEC ministerial committee monitoring the implementation of the deal met in Kuwait recently and demanded a report be prepared by April on extending the oil output cut for six months more to guarantee stability of the world markets. Marzouq said that oil prices are unpredictable for the coming period, for factors like geopolitics, speculations, exchange rates and economic data, which are hard to predict or bring under control. - KUNA