Kuwait discusses cancellation of oil project tenders worth $8.7bn
9 January 2026
State-owned upstream operator Kuwait Oil Company (KOC) is holding internal meetings over the potential cancellation of five tenders for projects worth a total of $8.7bn, according to industry sources.
All of the projects received low bids that exceeded their allotted budgets, and over recent months, KOC has been seeking approvals to increase the budgets so contracts can be awarded.
One industry source said: “KOC has now started discussions about cancelling these tenders due to the bids coming in over budget.
“KOC is discussing potentially retendering some or all of the projects with a new strategy.”
The tenders that KOC is considering cancelling are for the following projects:
Separation Gathering Centre 1 (SGC-I) and Water Injection Plant (WIP-1)
Low bidder: Tecnicas Reunidas (Spain) – $2.47bn
Separation Gathering Centre 3 (SGC-3) and Water Injection Plant (WIP-3)
Low bidder: Larsen & Toubro (India) – $2.48bn
Effluent Water Disposal Plants 1 & 2 expansion project (EWDP 1&2)
Low bidder: Larsen & Toubro (India) – $1.30bn
Jurassic Light Oil (JLO) Export Facilities and Upgrade of Existing Export Network
Low bidder: Larsen & Toubro (India) – $988m
Installation of Water Injection Plant (WIP-4)
Low bidder: Petrofac (UK) – $1.48bn
If the five contract tenders are ultimately cancelled, it will be a major setback for contractors in Kuwait’s oil and gas sector.
In 2025, Kuwait recorded its highest total annual value for oil, gas and chemicals contract awards since 2017, according to data from regional project tracker MEED Projects.
A total of 19 contract awards with a combined value of $1.9bn were awarded over the year.
This was more than four times the value of contract awards in the same sectors in 2024, when awards totalled just $436m.
It was also above the $1.7bn peak recorded in 2021, but it remained well below the contract award values seen in 2014-17, when several large-scale, multibillion-dollar projects were awarded in the country.
The surge in the value of contract awards in 2025 came after Kuwait’s emir indefinitely dissolved parliament and suspended some of the country’s constitutional articles in May 2024.
Prior to the suspension of parliament, Kuwait suffered from very low levels of project awards for several years amid political gridlock and infighting between the cabinet and parliament.
This meant that important decisions about projects could not be made, something that was seen as a major obstacle for the progression of strategic oil projects.
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