The Kuwait Petroleum Corporation has about 7 billion dinars (23.14 billion dollars) owed years ago as dividends to the General Reserve Fund, which is managed by the General Investment Authority and is one of the sovereign funds, and covers the general budget deficit.
In addition, a government source and another informed source told Reuters that the two parties signed countries for payment under which 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 the injection of financial liquidity into the state treasury, after its budget was greatly damaged last year due to the repercussions of the spread of the Corona virus and the decline in oil prices, 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 it off faster … We do not want to pressure them more, but the amount of 550 million annually is what was agreed upon,” he said.
The Kuwait Petroleum Corporation did not immediately respond to a request for comment.
Kuwait Petroleum Corporation
The local newspaper, Al-Rai, said on 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.