The Kuwait Oil Company and the Kuwait National Petroleum Company have completed the diligence work on the issue of the merger of Kuwait Gulf Oil Company (KGOC) and the Kuwait Integrated Petroleum Industries Company (KIPIC), with no legal impediment to the merger, in preparation for moving to the second phase of the merger and restructuring, amid some reservations about the merger mechanism and its possible consequences and effects on employees or the relationship with certain contractors.

A local Arabic daily quoting high-ranking pointed out that the teams in each company, whether related to the merger of KGOC or KIPIC have completed the required report in this direction.

The sources stated that despite the controversy surrounding the effects of restructuring the oil sector and its potential impact on many relevant stakeholders, including some positions and job titles of workers, opportunities for promotion and the possibility of termination of contracts of some contractors, there are institutional directives to complete studies to ensure that workers’ rights are not affected before any executive decision is taken.

On the other hand, sources expected that challenges would arise due to this merger, including the ongoing controversy regarding the job titles of workers and their impact on job opportunities and promotion in some jobs, in addition to the legal status of the oil unions of these companies, and the impact on their status.

The sources also indicated that the expected challenges include the filing of compensation claims by some contractors in the event of the termination of their contracts, including the KOC contracts that have similar with other contractors in KGOC and in the case of merger and restructuring, this may lead to the termination of contracts of some of these contractors and may affect each other, despite the company’s legal rights to terminate these contracts.

The sources confirmed that the completion of the diligence examination is an initial stage, followed by subsequent stages that will be completed and studied to ensure that workers in the oil sector are not affected before any executive decision is taken.

The sources stressed the CEO of the Kuwait Petroleum Corporation, Sheikh Nawaf Saud Al-Sabah has stressed on the importance of protecting the legal rights of workers, especially that the next stage requires concerted and unified efforts to confront global challenges in the oil industry.

The sources said Al-Saud’s directives are clear about the necessity of reviewing all files before moving to the implementation stages, especially the vital files, and reviewing them in an accurate and realistic manner while studying current and future variables and their effects on workers, functional structures and all parties before proceeding with the merger.

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