Introduction

The history of oil in Kuwait is riven with political disputes and interference. Lack of trust in international oil companies (IOCs) helped catalyze nationalization of the sector in the 1970s and the creation of Kuwait Petroleum Corporation (KPC), the country’s national oil company (NOC). Over its lifetime, KPC has struggled to absorb the many different subsidiaries both in Kuwait and abroad that comprise the nation’s oil operations and to assimilate them into a truly functional, integrated company. Nationalization eventually gave KPC ownership of these subsidiaries, but asserting control and consistent and coordinated strategy has been more difficult as the subsidiaries had many different former owners, histories, and corporate cultures.

As is true in many state-owned enterprises, KPC suffers from excessive bureaucracy and extensive political interference. However, of the fifteen countries examined in this book, Kuwait is notable for its particular inability to devise and implement reforms that would improve performance at its oil company. The oil sector as a whole is largely devoid of strategy. The root cause of these troubles is Kuwait’s fragmented and dysfunctional political system.