Legislative Panel Takes Up Kpc Budget

The parliamentary Budgets and Final Accounts Committee discussed Wednesday the joint budget of Kuwait Petroleum Corporation (KPC) and its subsidiaries for fiscal 2017/2018, as well as the final account for fiscal 2015/2016 and comments of the State Audit Bureau and Financial Controllers Agency. Committee Chairman MP Adnan Abdul-Samad disclosed the estimated net profit of KPC in its budget for the new fiscal year is about KD 544 million which is 47 percent higher than that of the previous year.

He explained this is based on the expected revenues with oil price of $45 per barrel that will contribute to higher estimate of crude oil sales — more than KD 10 billion. He pointed out the committee still believes the net profit of KPC comes from non-operational income more than the operational because the former is the result of interests, investment income and others estimated at about KD 939 million; while some operational activities of companies affiliated to KPC have been incurring annual losses. He cited as an example Kuwait National Oil Company’s refinery losses which increased to KD 405 million in the budget for the new fiscal year.

He stressed the need to take decisive steps to address the problem, considering the KPC budget is a combination of the results of the work of its subsidiaries. He went on to say that despite the reduction in the number of oil development projects from 70 to 38 with an estimated total cost of KD 18 billion, or KD 5 billion.

He emphasized the need to find plausible solutions, taking into consideration the observations on the delayed implementation of oil projects by KPC and its affiliated companies. He revealed the last State Audit Bureau report submitted to the committee revealed that 144 out of 291 observations were about oil sector contracts and projects, as majority of them touched on loopholes in oil sector contracts and lack of financial conformity. He said the committee is contemplating on the possibility of holding a special session to discuss these observations in the Parliament as a separate issue, as it happened in the previous two years when they discussed observations of the bureau on various government agencies. For instance, the actual completion rate of the environmental fuel project was 50 percent in the last final account, while the target was 61 percent.

The number of workers involved in the project did not exceed 17,000 whereas the plan was 40,000, he asserted. He added the committee stressed the need for KPC and its affiliates to intensify their efforts in achieving the vision to increase production to four million barrels by 2020, especially since the difference between the target and actual production is estimated at 810,000 barrels according to the final account and budget of KPC and its subsidiaries which the committee discussed this year.

He affirmed the realization of this vision is necessary, particularly since the environmental fuel and Al-Zour refinery projects are expected to enter the operational phase in the next few years.

In order to ensure highly efficient operations, they will be provided with 46 percent of the current production of Kuwait Oil Company (KOC) — three million barrels — until the last final account, he clarified. He disclosed the committee also underscored the need to fill vacant posts in KPC and its subsidiaries — a total of 3,578 jobs; as well as the importance of re-examining reduction of personal interview percentage in the promotion criteria, currently 55 percent, to avoid mistakes.

SOURCE : ARABTIMES

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