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Kuwait scraps oil tenders worth $10bln after bids exceed budget

Kuwait has cancelled oil sector tenders worth nearly $10 billion after contractors submitted bids far above the government’s approved budget, in a move highlighting rising project costs and tighter fiscal discipline in the Gulf energy sector.

The cancelled tenders were issued by Kuwait Oil Company (KOC), the upstream arm of state-owned Kuwait Petroleum Corporation (KPC), and covered nine major oil and gas infrastructure projects, according to industry sources and regional business reports.

The projects were part of Kuwait’s broader upstream expansion and infrastructure modernisation programme and included contracts for water injection systems, pipelines and related oilfield facilities, critical for maintaining reservoir pressure and boosting production capacity.

However, bids submitted by international contractors reportedly exceeded the approved project ceiling — estimated at around KWD3 billion (approximately $10bn) — prompting the Central Agency for Public Tenders (CAPT) to approve KOC’s request to cancel the tenders rather than proceed with contract awards.

The decision reflects Kuwait’s effort to contain capital expenditure amid rising global construction and engineering costs, even as it continues to pursue long-term production growth targets.

Industry sources said KOC is expected to revise project specifications and cost structures and may reissue the tenders at a later stage under adjusted commercial terms. 

The cancellations come as Kuwait seeks to expand its sustainable crude oil production capacity as part of its long-term energy strategy, while balancing investment ambitions with budgetary discipline and fiscal sustainability.