25-08-08 The Kuwaiti cabinet referred a multi-billion-dollar oil refinery project to the Audit Bureau for investigation after MPs questioned the bidding process and awarding of contracts.
The cabinet agreed that the Audit Bureau, the state accounting watchdog, "would examine and revise procedures taken regarding the new refinery project," Foreign Minister Sheikh Mohammad al-Sabah was quoted as saying.

In May, national refiner Kuwait National Petroleum Co. (KNPC) awarded four major contracts worth $ 8.3 bn to four South Korean and a Japanese firm to build the 615,000 bpd refinery. A fifth contract, estimated at $ 2 bn, was awarded to US engineering firm Fluor.
The total cost of the project will be higher than the announced value since the contracts are based on a cost plus profit margin, which means Kuwait paying the cost of the project plus an agreed profit which has not been disclosed.

Several opposition MPs however have charged that the bidding process was flawed since the awarding of contracts was not based on the emirate's Tenders Law. The MPs threatened to quiz Oil Minister Mohammad al-Olaim in parliament if the Audit Bureau, an independent body, did not scrutinise the contracts.
Sheikh Mohammad said the cabinet ordered KNPC to send all documents related to the refinery project to the Audit Bureau to "allow it to assess the project and clarify facts."

The oil ministry was due to sign contracts with the successful bidders in the coming few weeks but the investigation is expected to delay the process. The project had already been delayed for technical and contractual reasons. The first round of bids was scrapped in September because bids came in at more than $ 19 bn, way above the initial budget of $ 6.3 bn.
Kuwait, which sits on about 10 % of global crude reserves, currently produces around 2.55 mm bpd.