Kuwait dissolves KIPIC in oil sector restructuring

• KIPIC taken over by KNPC
• New entity has $8.5bn of capital
• Kuwait’s oil sector being restructured

Kuwait has dissolved a downstream oil company and allowed it to be acquired by a bigger oil entity as part of plans to restructure the Gulf state’s hydrocarbon sector.

Kuwait Integrated Petroleum Industries Company (KIPIC) was taken over by the Kuwaiti National Petroleum Company (KNPC) in line with a decision by the supreme petroleum council (SPC), which manages the country’s hydrocarbon industry.

KIPIC manages the southern Al-Zour oil refinery, one of the world’s largest refining units with a capacity of around 615,000 barrels per day (bpd).

The acquisition was announced at the weekend by KNPC, which said KIPIC was dissolved and merged into its operations inside and outside Kuwait.

In a statement published by the official gazette, KNPC said the move resulted in the increase of the new entity’s capital to KD2.6 billion ($8.5 billion).

KNPC’s general assembly, which endorsed the acquisition last week, said the new company’s operations cover Kuwait and abroad, including exploration, production, refining, processing, transportation, storage and export of oil, gas and hydrocarbons.

“They also comprise the development and advancement of the petroleum industry and its products and related industries, cooperation with similar companies, and the establishment of petrochemical industries and their derivatives,” it said.

Besides the $16 billion Al-Zour, Kuwait has two other main oil refineries in Al-Ahmadi and Abdullah ports, with a combined output capacity of nearly 790,000 bpd.

Kuwait also has shares in overseas refineries, with production under its management of around 400,000 bpd, according to the oil ministry.

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In late 2024, oil officials said Kuwait Petroleum Corporation (KPC) had devised plans for the merger of four of its subsidiaries and that the process would start at the end of the first quarter of 2025.

The restructuring, intended to cut costs and improve efficienty, coincides with plans by Kuwait to expand oil and gas production capacity by 50 percent and gas output to nearly 1.5 billion cubic feet per day.

But its oil sector has been jolted by repeated Iranian missile and drone attacks during the six-week war with the US-Israeli alliance and the closure of Strait of Hormuz, through which nearly all Kuwait’s crude exports pass.

Kuwait has eight main state-owned oil companies and controls nearly 101 billion barrels of recoverable crude deposits, the world’s sixth-largest reserves, official estimates show.

In 2020 KPC appointed the US-based consultant Strategy& to carry out a study for restructuring the oil sector, which will remain managed by KPC.