Kuwait Cuts Oil Sector Spending

OPEC member Kuwait has decided to slash spending in its oil sector by around 700 million Kuwaiti dinars (US$2.3 billion) during the 2020-2021 fiscal year due to a sharp rise in the GCC country's budget deficits, a local newspaper reported on Thursday.

The state-owned Kuwait Petroleum Corporation (KPC), which manages the country's hydrocarbon industry, agreed with the Finance Ministry to slash budgeted costs of oil and gas production from 3.7 billion dinars (US$12.21 billion) to 3 billion dinars (US$9.9 billion) for the current fiscal year, which started on April 1, the Arabic language daily Alanba said.

It quoted responsible oil sources as saying the Finance Ministry found that such high costs are not "compatible" with the large decline in Kuwait's oil output in line with an agreement by OPEC and other producers to trim supplies to boost prices.

"The Finance Ministry decided that high oil sector costs are unjustified this year due to the current negative market conditions and the widening budget deficits," it said.

Finance Ministry figures showed Kuwait accumulated a fiscal shortfall of nearly 22.8 billion dinars (US$75 billion) over the past five years and that it was financed through the country's overseas assets.