Tokyo: Japanese industry minister ‘Koichi Hagiuda described Kuwaiti’s oil minister ‘Muhammad Al-Faris in an online meeting held on Thursday in a bid to plan or to help Kuwait step up crude oil production as Russia’s invasion of Ukraine has weaved the market.
Nippon Export and Investment Insurance, or NEXI, which the Japanese administration wholly holds, will guarantee a syndicated loan to Kuwait Petroleum Corp.
According to the industry ministry, the syndicated loan is anticipated to touch 1 billion dollars or some 120 billion yen. Moreover, the loan will be decided soon by Western financial institutions as well as Japanese megabanks-MUFG Bank, Sumitomo Mitsui Banking Corp, and Mizuho Bank.
During the online meeting, Hagiuda expressed concern about high crude oil prices caused by the Ukrainian crisis, emphasizing his hope that the syndicated loan would allow Kuwait to increase its crude oil output capacity.
In response, Kuwait’s minister, who also serves as deputy prime minister, stated that Kuwait would hold talks with other oil-producing countries in order to stabilize the market.
After the meeting, the ministers signed a contract of understanding for cooperation among NEXI and Kuwait Petroleum in the areas of energy and decarbonization.
Kuwait holds approximately 7% of global oil reserves and has a current production capacity of about 3.15 million barrels per day. The Kuwait Petroleum Corporation (KPC) declared its intention to increase oil production capacity to 4.75 million barrels per day (mmb/d) by 2040.
Kuwait’s oil production amounted to 2.7 million barrels per day in 2020. At that time, the country was among the leading ten oil producers worldwide, with three percent of the global oil production.
Kuwait is the world’s eleventh biggest oil producer and seventh-largest exporter. Kuwait’s oil production accounts for 7% of worldwide oil production. Since the administration of Kuwait holds the oil industry, it prevents a lot of the country’s economy; in all, about 43 percent of the Gross Domestic Product.