DMEA: Kuwait extends CFP contract

This week’s DMEA looks at Kuwait’s move to extend a consultancy contract following project overruns at a key refining development and Iran’s appointment of a new oil minister.

Kuwait Petroleum Corp.’s (KPC) downstream-focused subsidiary this week extended a project management consultancy (PMC) contract for the emirate’s recently completed refinery overhaul project.

The move renews a contract Kuwait National Petroleum Co. (KNPC) signed with UK-based Amec Foster Wheeler for the implementation of the Clean Fuels Project (CFP) in October 2012. The UK firm became part of the Aberdeen-headquartered Wood Group in late 2017.

Quoting sources close to proceedings, the local Al-Anba Arabic language daily said that the Central Agency for Public Tenders (CAPT) had approved KNPC’s request to extend the deal, noting that the contract would now run until September 2023 because of contractor delays executing the CFP which had been expected to be completed in late 2018, but was not finished until June this year.

The sources said: “KNPC has decided that those contractors must pay for the extension of the consultancy contract because they were late in abiding by the project’s completion date … the extension will start from September 24, 2021 until September 23, 2023.”

In early June, KNPC announced the completion of a new hydrocracking unit at the Mina Abdullah refinery, signalling the finalisation of work on the $15.7bn CFP. Completion of the works came a month ahead of its updated schedule.

Meanwhile, Javad Owji has replaced Bijan Zanganeh as Iran’s new Oil Minister, following his proposal for the role last month by incoming President Ebrahim Raisi.

His appointment was approved by the Iranian parliament, with MPs voting 198 to 70 in his favour following five days of debate about the formation of Raisi’s 19 new cabinet members. 18 lawmakers abstained.

Owji previously served as deputy to Oil Minister Massoud Mir-Kazemi in 2009-2011 during the second presidential term of Mahmoud Ahmedinejad. Mir-Kazemi was named as the chairman of Iran’s Planning and Budget Organisation.

Owji served as managing director of the National Iranian Gas Co. (NIGC) and has held top positions in Mofid Economics Group and Petro Mofid Development Holding, two subsidiaries of Execution of Imam Khomeini's Order (EIKO or Setad).