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Kuwait in search of alternative to oil

January 6, 2019

Govt must foray into petrochemical industry and products

We know Kuwait has more than 90 billion barrels of oil underground, most of which are likely recoverable at a low cost of less than $10 per barrel. In addition, it has domestic and overseas joint refining operations in Europe and Asia.

Its overall coverage and oil investments are commendable and it still has more chance to grow.

Nevertheless, depending on oil alone is not healthy and economically viable on the long run.

The current and future developments of alternative energy forms of energy could threaten the status of oil in every sector. Therefore, it is necessary to look around and find a new source of income instead on depending on oil revenues by more than 90 percent.

Firstly, we believe Kuwait must optimize its oil resources and make sure it has entered every field that can enhance and enrich our oil income to the maximum. Not only in refining, it must also produce the most competitive products that has real added value.

Our income from the marketing of our downstream, refining, and from downstream overseas sales must be maximized. The other field that Kuwait has missed is investing in petrochemical industry and products. This is the field of the future; it represents the future growth of oil, and has high added value that we should not miss. Petrochemical is the future of oil industry and we should be part of it.

However, we cannot manage this industry alone and must have foreign partners, who are reluctant to come, as we stated last week on this page. Kuwait should be among the leaders in this business. We should invite Indian, Korean and Chinese petrochemical sectors to participate in this new venture and convert oil to the maximum revenue, as they do back home.

They import oil and then export it back to us in many forms, mostly commonly plastic, and generate huge net returns from $50 to $60 per barrel of crude oil. In other words, they simply convert the $60-barrel oil from Kuwait to more than 200 percent return on investments. This added value, which attracts us, can help us get into smaller business with our small population.

Of course, it is not an alternative to oil, but its new business with huge profits can be beneficial for Kuwait, especially with the low oil prices, and low demand. It is an alternative that can survive – the new venture of petrochemical products with full utilization of the full barrel of oil.

Arabtimesonline