Kuwait on Dec. 28 scrapped a multi-billion dollar deal to form a joint venture with Dow Chemical following stiff opposition from MPs, an official statement said. The decision to scrap the controversial deal was taken at a meeting of the Supreme Petroleum Council (SPC), the highest oil body in the Gulf state, said the statement.
The SPC, which is headed by Prime Minister Sheikh Nasser Mohammad al-Ahmad al-Sabah, was the body that gave the green light to sign the agreement with Dow Chemical last week. Under the deal signed last month, state-owned Petrochemicals Industries Co. was to pay $7.5 billion to form a petrochemicals firm known as K-Dow.
Several opposition MPs had threatened to quiz the prime minister in parliament if the deal was not scrapped before January 1 when it was due to become effective. The cancellation of the agreement after the start of the New Year would have made Kuwait liable to pay a penalty of up to $2.5 billion.
Oil Minister Mohammad al-Olaim last week defended the deal, saying it had passed through all proper channels and that Kuwait would greatly benefit from a partnership with Dow Chemical, one of the world's biggest chemical companies. But under pressure from MPs, the cabinet held a series of meetings last week to review the legal, economic, technical and financial aspects of the deal. The controversy snowballed after the opposition Popular Action Bloc threatened to quiz the prime minister. Many members of the 50-seat parliament supported the threat.
Copyright Agence France-Presse, 2008