A Review of Upstream Development Policies in Kuwait

Abstract

Since 1993, Kuwait's legislative bodies have been looking closely at the prospect of opening-up the country's upstream oil sector for development and production to international oil companies (IOCs). The country has proposed doing this by means of a mechanism called an "operating service agreement" (OSA). This has generated controversy. One side argues that opening-up the oil sector embodies a pattern of denationalisation and is reminiscent of the country's former concession agreement of 1934. And the other side maintains that the proposed OSA is unquestionably different to the concession agreement, in terms of legal framework, fiscal system and the role of the state. This paper reviews and compares the two types of agreement. Copyright 2004 Organization of the Petroleum Exporting Countries.