Opinion – monitor
Two sources said that the state-owned Kuwait Petroleum Corporation and the General Investment Authority have reached a final agreement whereby the corporation will pay about 8,250 billion dinars ($ 27.44 billion) to the Kuwaiti government within 15 years in installments, representing profits owed about 7.75 billion and a half billion dinars in fees. Additional. The “Kuwait Petroleum Corporation” has about 7 billion dinars (23.14 billion dollars) owed for years as dividends to the “General Reserve Fund” managed by the “General Investment Authority”, which is one of the sovereign funds, and covers the deficit of the general budget.
A government source and another informed source said that the two parties signed a payment schedule whereby the Petroleum Corporation would pay 550 million dinars ($ 1.83 billion annually) to the General Reserve Fund over the next fifteen years.
This agreement will allow for the injection of financial liquidity into the treasury of the oil-rich Gulf state, whose budget was severely damaged last year due to the repercussions of the spread of the Corona virus, the fall in oil prices, and the tense relationship between the government and parliament, which prevented it from resorting to international markets in order to obtain loans.
Sources told Reuters earlier that the “General Reserve Fund” and the “Kuwait Petroleum Corporation” had agreed in recent years on a schedule for repaying the accumulated profits, but the fund requested that it be reviewed and expedited as part of the Kuwaiti government’s efforts to cover the budget deficit.
The government source said that the amount of profits rose to 7.75 billion dinars in recent months, as the corporation stopped paying installments, while negotiations were ongoing between the two sides, indicating that the total amount also included 500 million dinars as “fees”.
“The two parties signed that, but there is an implicit understanding that if the petroleum corporation has more money, it can pay off faster … We do not want to pressure them more, but the amount of 550 million annually is what was agreed upon,” he added.
The Kuwait Petroleum Corporation did not immediately respond to a request for comment.
The local newspaper, Al-Rai, said last Friday that the Kuwait Petroleum Corporation will pay quarterly installments to the state’s public treasury, starting next June, at a value of approximately 137.5 million dinars.
(One dollar equals 0.3006 dinars).