Kuwait appoints former Zain Group chief Saad Al Barrak as oil minister

Country plans to boost its production and refining capacity over the next few years

Saad Al Barrak. Delores Johnson / The National

Kuwait, Opec’s fourth-largest producer, has formed a new government and appointed Saad Al Barrak as the country’s oil minister to replace Bader Al Mulla.

He was also named minister of state for economic and investment affairs in a government that features 15 ministers, the official Kuna news agency reported on Sunday.

Mr Al Barrak holds the position of deputy prime minister as well, alongside two other deputy prime ministers and a first deputy prime minister.

This is Mr Al Barrak's first foray into government. He was chief executive of Kuwaiti telecoms operator Zain Group from 2002 to 2010 and is also a member of the country’s Supreme Council for Planning and Development as well as vice chairman of The National Fund for Small and Medium Enterprise Development.

He is also involved in the tech industry with several roles. He is the executive director of ILA Group, a holding company that invests in start-ups and early growth companies, is also chairman of Beyond Limits, a joint venture with Caltech, and serves on the board of Red Lambda, a cyber-security company.

Mr Al Barrak is credited with transforming Zain from a small regional company into an international telecoms group with a presence in more than 20 countries.

The appointment comes at a time when Kuwait is planning to boost its production and refining capacity over the next few years.

In November, state-owned Kuwait Integrated Petroleum Industries said that the first phase of Al Zour refinery had begun commercial operations.

The move will be followed by the second and third phases of the refinery's operations, moving towards full maximum refining capacity, Waleed Al Bader, Kipic chief executive, said at the time.

The facility is designed to process heavy crudes and will have a capacity of 615,000 barrels per day.

Kuwait, which holds about 8 per cent of the world’s oil reserves, produced 2.7 million bpd in 2022, up from 2.42 million bpd a year earlier, according to Opec data.

The country, which is committed to the cuts decided by the Opec+ alliance, is currently producing more than 2.8 million bpd and will reach three million bpd in 2025, the Kuwait Times reported, quoting Ahmad Al-Aidan, chief executive of Kuwait Oil Company.

Mr Aidan added that the company intends to spend about $2.42 billion on oil-related projects over the next five years.

Russia's war in Ukraine has exacerbated a global energy crisis caused by years of underinvestment in new oil and gas projects.

Lack of new investment in the sector could lead to increased oil market volatility, Opec secretary general Haitham Al Ghais said last month.

“Investment is urgent to account for an annual decline rate in production … and despite the urgent need for investment, we have heard disheartening calls to divest from hydrocarbons,” Mr Al Ghais told attendees at the Middle East Petroleum and Gas Conference in Dubai.

On June 4, top crude exporter Saudi Arabia announced a unilateral production cut of a million bpd for July and said that an extension could be possible.

The Opec+ group of 23 oil-producing countries has extended its current production cuts until the end of 2024.

The group has total production curbs of 3.66 million bpd, or about 3.7 per cent of global demand, in place, including a two million bpd reduction agreed on last year and voluntary cuts of 1.66 million bpd announced in April.

Brent, the benchmark for two thirds of the world’s oil, surged to nearly $140 a barrel in March last year after Russia began its military offensive against Ukraine.

It is currently trading at about $75 a barrel amid economic growth concerns and resilient Russian crude supply.