Kuwait Oil Company plays a leading role in all initiatives aimed at developing the oil sector in Kuwait, which is of utmost importance and priority as the engine that drives the national economy with both its public and private wings.
In this context, it was necessary to support the national industry effectively, to empower it to participate in the vital projects of short and long-term plans in the oil sector in order to achieve full-scale development.
The Consolidated Partnership Advisory Council in the Oil Sector was one of these initiatives is, which has sought, since its inception in 2009, to promote cooperation between the oil sector and the local private sector with the aim of applying KPC's vision to support the national industry effectively in the sector through plans containing short short-term and long-term strategic objectives. The Council has recently begun its fourth session, and because the leadership of this session is in the custody of KOC, it was necessary to try to know closely the Council, its tasks, achievements and plans.
KOC, a new leader
After the Kuwait National Petroleum Company (KNPC) assumed the leadership of the Council during its previous three sessions, the Consolidated Advisory Council for the fourth session was formed by KPC’s decision No. 33 of 2017. This is the first council chaired by KOC since the inception of the first Council in 2009, and KNPC will continue to assume the functions of the current secretariat of the Council for its expertise in this regard.
Under the leadership of KOC, initiatives carried forward from the plan of action of the previous Council and some new proposals were discussed at the first meeting of the Council with its new body. The meeting was held in July under the leadership of the current chairman of the Council DCEO planning and commercial Emad Sultan. During the meeting, it was agreed to give members an opportunity to read the Council's previous plan of action and to send any comments thereon to the Secretary of the Council along with any other proposals for discussion at the next meeting of the Council.
Goals and ambitions
The Council aims mainly to provide a collaboration platform between the local oil sector, the local suppliers sector and the government sector to improve local content. Suppliers include all companies supplying materials, products or services to the oil sector from contractors, manufacturers, suppliers (non-manufacturers) and consultants.
The partnership program between the oil sector and local private sector aims to achieve integration between the industrial sector and the oil sector in Kuwait to achieve the best results in the strategy adopted by KPC. In addition, it aims to promote the concept of partnership between the public and private sectors and contribute to maximize the participation of the private sector in the oil industry.
This collaborative platform provides a durable and effective channel for communication between the oil sector and the private industrial sector to increase mutual understanding, exchange experiences, reduce project costs, reduce risks and improve working methods to create new, high-quality products and compete with the global market to reduce dependence on foreign products. It also helps in creating job opportunities and national cadres capable of meeting the actual needs of development requirements for the progress and prosperity of society.
Among other ambitions of this pioneering program is to create an appropriate environment and mechanism for the creation, development and follow-up of ideas for the promotion of the oil industry and the related industries for both sectors (private and oil), by providing the appropriate environment and encouraging investors to build the necessary infrastructure. It also endeavors to create opportunities to provide support not only to the local oil industry but also to all companies in the local market.
In addition, the Partnership Council seeks to provide an opportunity to learn about developments and changes related to the local private sector, which may include the availability of new materials or technologies in the local market and support the planning and joint forecasting process.
The introduction of an umbrella for local companies with outstanding performance under various categories, such as manufacturers and non-manufacturers (local agents), as well as local contractors in the engineering, procurement, construction, maintenance and service categories, will allow us to achieve common goals faster as well as enable us to avoid mistakes.
Integrated work
In order to promote the national economy, an integrated plan of action is needed that takes into account the achievements of the past sessions of the Consolidated Partnership Council through its long years of operation. In that case, it will be possible to build on those achievements to reach a plan that ensures that the goals it seeks are achieved after taking into account the variables that may occur.
Previous initiatives include many projects that collectively constitute a commendable work. However, the great effort and amount of coordination required between many parties in the public and private sectors is not easy to achieve.
These initiatives include the identification of materials used in the oil sector that can be obtained from the local market through local suppliers and manufacturers. However, it is necessary to identify fast moving consumable items in order to know the size of monthly or quarterly consumption. In addition, it is necessary to work with local suppliers and manufacturers to provide such materials in warehouses within the State of Kuwait. This can be done through agreements that ensure mutual benefit, and reduce the steps necessary to obtain them as soon as possible, thus contributing to provide time and financial savings that enable the completion of projects and operations in the best way.
The initiatives also include showing details of major projects through the periodic electronic bulletin issued by the Suppliers Service Center (on behalf of the Consolidated Partnership Advisory Council) in KNPC, the websites of KOC and PIC. Each K-Company shall update data of those projects on their own websites, thus enabling contractors and business collaborates to plan ahead based on how much information is available on the size and cost of the project, and what this represents as an additional step to improve coordination with K-Companies.
One of the Council's initiatives is to identify the causes that lead to shortcomings and obstacles in the implementation of the work undertaken by local private sector companies to try to solve them quickly, and avoid them in the future. The Council also encourages establishing joint ventures between local and international factories in order to localize new industries aimed to manufacture spare parts or provide specialized services. Such services may include maintenance of rotary equipment and valves of various types and allowing them to participate in the implementation of specialized maintenance contracts. Those initiatives also promote establishing alliances between local private sector companies (contractors) and international companies with large potential for ensuring the full capacity to execute mega projects required by the oil sector, as well as localizing of new industries, with the largest share going to the local private sector.
The Council works to maintain the continuity of contracting with established local factories and ensuring that the specifications of their products conform to the specifications required for K-Companies and follow up the application of the priority of subcontracting up to 20% of the value of the contract to the local sector companies and follow them during the period of implementing the contract. It also encourages local consulting companies to increase their share of business through working with the foreign consultant.
In addition, the Council requests international companies to issue a list of available opportunities to Kuwaiti private sector based on the materials and work needed by those companies to implement projects in the oil sector in the future after awarding contracts and during the processing period. In addition, they must ensure the existence of national companies in the list of qualified contractors able to execute future projects. In the absence of such companies, the relevant companies will be contacted to invite them to participate.
Members of the Council
The Consolidated Partnership Advisory Council has 21 members divided into three categories:
- 5 members representing the supplier sector: a representative of local manufacturers, a representative of local agents (non-manufacturers), a representative of engineering, procurement and construction contractors, a representative of maintenance and service contractors and a representative of local consultants.
- 5 members representing the relevant governmental and non-governmental sectors: Kuwait Industries Union, Kuwait Chamber of Commerce and Industry, Public Authority for Industry, Manpower and Government Restructuring Program and The National Fund for Small and Medium Enterprises Development.
- 11 members representing K-Companies: 2 DCEO’s of KOC and KNPC, as well as groups managers or business departments of KOC, KNPC, PIC, directors of (projects/staff) of the three companies, the Director of KPC's Private Sector Development Group, the Training Manager at the Petroleum Training Center of KPC and the Secretary (Coordinator and Rapporteur).