KUWAIT CITY, Nov 20: The Kuwait Petroleum Corporation (KPC) recently secured a syndicated loan of KD 300 million, fully covered by Kuwait’s traditional banks, with varying contributions from each institution, according to informed sources. The medium-term loan forms part of KPC’s broader financing strategy to meet its operational and capital expenditure needs. Meanwhile, the KPC has initiated preliminary discussions with Kuwaiti banks operating under Islamic Sharia law to explore the possibility of a larger syndicated loan, estimated at close to KD 1 billion. The proposed facilities would be a mix of Kuwaiti dinar and US dollar-denominated loans, aimed at bolstering KPC’s working capital.

Working capital refers to the funds needed to finance day-to-day operations, while invested capital pertains to debt and equity utilized for long-term investments. The KPC has reportedly requested Islamic banks to outline their potential contributions, financing terms, and proposed pricing for medium-term loans. This financing initiative aligns with KPC’s five-year financial strategy, which includes reduced capital expenditure plans amounting to KD 20.2 billion through 2025. Of this, KD 13.3 billion, or 65.8 percent of total expenditure, is allocated for exploration and production activities within Kuwait. The corporation is expected to seek a total financing of approximately KD 6 billion during this period, utilizing both local and international commercial and Islamic loans, as well as export credit facilities. As of March 31, 2024, KPC and its subsidiaries reported total long-term loans of KD 2.93 billion, down from KD 3.5 billion in the previous fiscal year. This marks a strategic shift towards balancing its financing needs with changing market dynamics in the financial and oil sectors.