Kuwait Oil Company (KOC) said Monday it succeeded in cutting 25 percent of its budget as well as slashing around 18 percent of its operating budget for the fiscal year 2020-21, all with the objective of contributing to “State financial stability.”
KOC was reacting, in a statement, to a local newspaper report that it canceled huge projects after spending hefty sums on designs, which allegedly reflected “lack of experience and failure to plan.” State-owned KOC underlined keenness to execute its strategic plan which aimed at maintaining and increasing production as part of a five-year plan.
It said the five-year plan included these reported projects but the global economic recession caused by the outbreak of coronavirus resulted in record drop of oil prices, which largely affected State of Kuwait’s revenues.
These extraordinary circumstances forced the Government of the State of Kuwait to direct all state institutions, including Kuwait Petroleum Corporation (KPC) and its subsidiary companies, to review its capitals and operating budgets, said KOC.
Accordinly, it said, KOC specificed the important projects and postponed others including those under the designing process but “in a way that would not affect its medium-term strategic objectives.” KOC said it also cut 25 percent of its capital budget and 18 percent of operating budget.
KOC will always carry out its projects with the objective of maintaining and ultimately increasing production, and therefore will keep on reviewing its five-year plan in line with circumstances of the global market, as well as setting the best time to decide upon its “postponed projects including those who were already designed.”