Consultancies invited to bid for Kuwait oil restructuring project

01 October 2019 3 min. read

The Kuwait Petroleum Company has floated a tender for the implementation of a comprehensive restructuring project for the local oil sector, with eight international consultancies prequalified.

Eight international consulting firms will have till the 5th of November to submit their bids for the implementation of a comprehensive restructuring project for the oil sector as tendered by state oil entity the Kuwait Petroleum Company (KPC). According to English-language media outlet the Arab Times, citing a report from to local daily newspaper Al-Anba, the tender was published on the official Kuwait Gazette.

The eight consultancies named in the report include MBB management firms McKinsey and Boston Consulting Group, Oliver Wyman (which in Kuwait operates as Tri International Consulting Group; a joint venture between the sovereign fund the Kuwait Investment Authority and the Kuwait Fund for Arab Economic Development), A.T. Kearney, Accenture Middle East, Deloitte Consulting, Pine & Company, and ‘Strategy Company’ (presumably Strategy&).

Last month it was reported that the Kuwait Minister of Oil, Electricity and Water Khalid Al-Fadhel was awaiting approval from the Supreme Petroleum Council (SPC) on the results of a preliminary study conducted by an unnamed global consulting firm on the local oil sector’s organisational structure and strategic growth options, although the KD 333,800 study is since said to have been cancelled.

Consultancies invited to bid for Kuwait oil restructuring project

The latest tender is described as a step in the right direction for implementation of the comprehensive restructuring project. A preliminary meeting has been set for two weeks from now (Oct 14th) at the KPC headquarters with interested firm’s required inform the agency of their attending representatives at least two days in advance. According to the report, the tender is floated as a ‘two envelopes’ system, requiring a technical envelope and financial envelope.

While consultancies are often cagey when it comes to oil & gas projects, McKinsey was reported last year to have been working on a plan in Oman to integrate the Sultanate’s refining and petrochemical industries into a single entity, with the Oman Oil Co. and Oman Oil Refineries and Petroleum Industries Co. having since merged their downstream businesses. Earlier last year, BCG recommended consolidation as a means to avoid stagnation among the petrochemical companies of the GCC.

Elsewhere, of the pre-qualified firms invited to bid in Kuwait, partners from both A.T. Kearney and Oliver Wyman have in recent times spoken of the unprecedented disruption of digital technologies to the oil & gas industry – the latter firm projecting a $1.8 trillion global increase in annual margin potential for the industry by 2030 through digital – while Deloitte Middle East Energy, Resources & Industrials leader Bart Cornelissen served on the judging panel for the recent Middle East Energy Awards.

Incidentally, the Operational Excellence Strategy of the Year award was won by the Kuwait Oil Company for its Integrated Creative Programme for Sustainable Oil Production, with one judge stating "By utilising this initiative, the company brought back into production many wells, reflecting an increase in daily oil production of a certain field by around 20,000 barrels of oil per day."