Yesterday Kuwait announced a government reduction in the country's energy sector's operating spending, due to the oil price collapse recently caused by the coronavirus outbreak.
The CEO of the state-run Kuwait Petroleum Corporation (KPC), Hashem Hashem, announced in an official memo that all of KPC's sectors and other subsidiaries would: "Rationalise spending and review their priorities for the financial year of 2020/2021, while ensuring the safety and continuity of the company's operations."
He added that the move would include: "Plans and programs to increase profitability through boosting revenue, reducing operating costs and reviewing required capital spending, through cancelling, postponing or cutting costs for programs and projects."
The Kuwaiti official noted that the decision was formed by the current circumstances following the outbreak of the coronavirus and the failure of the Organisation of the Petroleum Exporting (OPEC) members and Russia, with regard to determining production shares of crude oil.
KPC joins a number of other energy companies around the world who have slashed spending after the benchmark Brent oil price has more than halved since the start of 2020.A global pact on cutting oil output between OPEC, Russia and other producers – a group known as OPEC+ – was reported earlier this month to have collapsed. Since then, all global production limits were scrapped, prompting Saudi Arabia, the world's top oil exporter, and the United Arab Emirates to confirm that they would both increase output to record levels.