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By Economy Middle East
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July 19, 2022 11:55 am

Kuwait: Halting oil appointments detrimental to production plans

This might have a negative impact on the Kuwaiti economy
Kuwait
Oil pumpjack in sunset with Kuwait's flag

The decision to stop appointing officials to senior and supervisory positions or rotation in state institutions in the oil industry is starting to become clear and is likely to have a detrimental impact on the Kuwaiti economy in the future stage, according to Al-Rai daily. Sources revealed that the situation will jeopardize Kuwait’s chances of increasing its OPEC participation, highlighting the need to support the oil industry after its technical, operational, administrative, and financial sectors began to sigh due to the large number of positions that have remained unfilled for an extended period of time.

There are 30 open positions in the oil sector in Kuwait, including executive and management positions as well as team leader positions, sources observed. These positions are detrimental to the industry because they prevent decisions that could affect operations from being made. 

According to the same sources, it is unexpected that the government decided to prohibit senior appointments to positions in all industries, including the oil sector as this would hamper output and development, and its effects would be harmful.

Kuwait is rushing to implement strategic oil projects that will increase the country’s production capacity as it tries to keep up with developments on a global scale. However, the sources noted that “this requires deciding on projects that are difficult for any leader who works by proxy and does not know his fate, whether to avoid taking responsibility or not be qualified to do so, and therefore not excluding the oil sector from the decision to stop promotions and seniority appointments.”

In June, Kuwait said that it had an investment plan to increase oil production capacity to meet OPEC’s expected future needs, but it did not elaborate on the nature of this plan.

OPEC + (OPEC and its allies) decided in early June to increase production by 648,000 barrels per day in both July and August, rather than the previously agreed-upon 432,000 barrels per day. 

In April, sources disclosed that the government’s retirement would leave Kuwait Oil Company without a CEO and pose a threat to further postpone the execution of projects in the oil sector.

The sources added that the country’s oil and gas sector has already seen major delays as a result of the government’s departure on April 5. These delays are anticipated to have a severe long-term impact on the economy, which is heavily reliant on the income from the energy sector.

The resignation caused the ongoing restructuring of the Petroleum Corporation and its subsidiaries to be put on hold.

The final round of promotions and appointments that were supposed to be made as part of the restructuring in April have been postponed until the formation of a new government.