Uncertainty remains for key oil project in Kuwait
8 December 2025
State-owned upstream operator Kuwait Oil Company (KOC) is yet to decide on what to do regarding the future of its strategic oil project focused on the installation of a separation gathering centre (SGC) known as SGC-2.
Discussions are ongoing within KOC over whether the contract will be retendered using a different contract model, according to industry sources.
Initially the project was tendered using the engineering, procurement, and construction (EPC) contract model.
Discussions are ongoing over whether it will be relaunched using the build-own-operate (BOO) contract model.
One source said: “One school of thought is that changing the contract model will attract more contractors that are specialists in BOO projects.”
The contract tender was cancelled in October.
Last month, Kuwait Petroleum Corporation (KPC) decided to temporarily ban the UK-based engineering company Petrofac from participating in tenders and winning contracts.
Petrofac was the low bidder on the contract before the tender was cancelled.
KPC is Kuwait’s national oil and gas company and KOC’s parent company.
In Kuwait, when a company is temporarily banned from participating in tenders, it is described as being “Q-listed”.
The decision to suspend Petrofac from tender participation came after the company announced that it had applied to appoint administrators, a move that potentially put thousands of jobs at risk and increased uncertainty for projects worth billions of dollars in the Middle East and North Africa (Mena) region.
May Petrofac submitted the lowest bid for the Kuwaiti oil project focused on the installation of SGC-2.
It submitted a price of KD422.45m ($1.37bn).
Petrofac’s bid beat that of India-based Larsen & Toubro, which was the only other bidder with a price of KD441.07m.
When the project was originally tendered in June 2024, the following companies were prequalified to bid:
- Hyundai Engineering & Construction Company (South Korea)
- Samsung Engineering (South Korea)
- Saipem (Italy)
- Sinopec Luoyang Engineering Company (China)
- Sinopec Engineering Incorporation (China)
- Tecnicas Reunidas (Spain)
- Larsen & Toubro (India)
- Daewoo Engineering & Construction (South Korea)
- Petrofac International (UK)
- GS Engineering & Construction (South Korea)
The project is located in the eastern region of Kuwait referred to as EK-2 and its scope also includes debottlenecking work, in addition to the installation of the main units.
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