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Regulatory environment shifting for Kuwait oil and gas tenders

27 February 2026

 

Changes to the way key contracts are tendered in Kuwait have increased expectations that the country is shifting to a new regulatory environment for oil and gas projects.

Contractors interested in bidding for Kuwait’s planned tender for a $3.3bn gas processing facility have been briefed that the country’s Central Agency for Public Tenders (Capt) will not be involved in the tender process.

The exclusion of Capt from participating in the tender process has come at a time of increasing concerns surrounding the role of the agency, and has sparked speculation that it could be excluded from an increasing number of strategic tenders in future.

Capt is responsible for reviewing technical and commercial evaluations of bids and verifying that bidding is competitive.

Prior to its suspension in May 2024, Kuwait’s parliament was often blamed for blocking projects and halting the initiatives of Kuwait Petroleum Corporation (KPC).

However, the suspension of parliament has not triggered an uptick in project activity at KPC, indicating that other problems are holding back decision-making.

As time has passed, many stakeholders have started to view Capt as a key sticking point in the tendering process.

One source said: “There is a lot of frustration within some parts of the country’s oil and gas sector about the time it takes for Capt to review everything and approve a tender.”

Although this is not completely unheard of for small contracts tendered by Kuwait Gulf Oil Company (KGOC) to bypass Capt, it is unusual to see very large contracts bypass the agency.

“A lot of people were very surprised when they heard that Capt would not be involved in this process,” said one source.

“While the agency is resented by many in the sector that see it as a big reason for a lot of delays, it’s also highly respected for stopping corruption and bad practices.

“If you look historically at which large contracts avoided a review by Capt or its predecessor, it was only the most critical and urgent projects.

“The fact that this project is being permitted to side-step the agency’s process seems to mark a shift – and we could well see more big contracts following the same route in the future.”

Past exceptions

An example of a time period when key contracts were allowed to bypass Kuwait’s Central Tenders Committee (CTC), the predecessor to Capt, was in 1991.

During this time, in the wake of the Gulf War, urgent contracts needed to be tendered by Kuwait Oil Company (KOC), including some related to extinguishing fires at oil wells, which were lit by retreating Iraqi troops.

One source said: “I think the early nineties was the last time that large contracts were tendered by KOC without going through the relevant agency.

“It is easier to bypass Capt when it is a KGOC contract, but it’s still very surprising to see it with a contract of this size.”

If more contracts in the future are “fast-tracked” in the same way, it is likely that many stakeholders will welcome the effort to speed up tendering.

However, some are worried that if the streamlined tendering model is replicated too widely, it could undermine checks and balances that stop corruption.

“Kuwait is lucky as it has a system that makes corrupt practices very difficult to participate in,” said one source.

“The country needs to be careful and make sure that it doesn’t undermine the rigour of the system by prioritising convenience.”

Direct awards

Another factor that has impacted expectations about the future of project tendering in Kuwait’s oil and gas sector is that the methods used for several large contracts have been recently tendered in other sectors.

Key tenders that are impacting the discussions surrounding Kuwait’s oil and gas sector are the award of the $4bn Grand Mubarak Port contract to China Harbour Engineering Company in December and the award of a $3.3bn wastewater treatment plant contract to China State Construction Engineering Corporation in January.

Both of those direct contract awards were government-to-government agreements that did not have an open tender process in Kuwait and were not approved by Capt.

One source said: “These huge contract awards to Chinese companies without open tenders in Kuwait were extremely surprising.

“If you had asked me at the start of last year whether this kind of thing would be signed off, I would have told you it’s highly unlikely.

“I think there is no reason why we couldn’t see similar contract awards coming in the future in Kuwait’s oil and gas sector.”

Another source said: “Just like the gas processing contract, these contracts awarded to Chinese firms seem to have side-stepped Capt in a way that is very surprising.”

The planned $3.3bn gas processing facility is not the first time that KPC has tried to reduce its reliance on Capt for processing tenders.

In April 2024, KPC launched its own tendering portal in an effort to streamline the tendering process for projects in the oil and gas sector.

The portal was named the “KPC and Subsidiaries K-Tendering Portal” and is referred to as “K-Tender” by contractors.

The portal gave KPC a way of tendering and communicating with contractors without relying on the Capt website.

“The K-Tender portal was a step towards reducing reliance on Capt and gave KPC the flexibility to tender projects without Capt, even though, at the time, KPC made it clear that it intended to list all tenders both on the Capt website and its own portal.”

The recent direct contract awards to Chinese contractors and the tendering process for the $3.3bn gas processing facility have sent a signal to contractors in the Kuwaiti market that more unusual tenders could be in the pipeline.

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Wil Crisp

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