Kuwait Petroleum Corporation has signed a syndicated loan agreement totalling KWD1.5bn ($4.89bn), reinforcing its long-term expansion strategy in the oil sector. The transaction, coordinated by National Bank of Kuwait and Kuwait Finance House, represents the largest syndicated loan ever issued in local currency in Kuwait.
Two-tier structure for mixed financing
The funding is split into two main tranches: a conventional portion of KWD825mn and an Islamic tranche worth KWD675mn. Kuwait Petroleum Corporation stated that the proceeds will support its development plan to raise oil production capacity to 4 million barrels per day by 2035. In October, the country’s production stood at 2.55 million barrels per day, according to data published in the monthly report of the Organization of the Petroleum Exporting Countries (OPEC).
Broader participation from Kuwaiti banking sector
Under the agreement, National Bank of Kuwait initially committed KWD330mn, with an additional option for KWD165mn. The conventional tranche also includes Al Ahli Bank of Kuwait, Burgan Bank, Commercial Bank of Kuwait, and Gulf Bank. The Islamic tranche is led by Kuwait Finance House, which committed KWD270mn, with an additional KWD135mn option. This segment also includes Boubyan Bank, Kuwait International Bank, and Warba Bank.
Diversifying funding sources
Kuwait Petroleum Corporation stated that the loan is part of its broader objective to diversify funding sources to support investments required for expanding production capacity. The company is also exploring opportunities to monetise its infrastructure, notably through sale and leaseback transactions involving its crude oil pipelines, a strategy already deployed by several regional producers.
Sheikh Nawaf Saud Al-Sabah, Chief Executive Officer of Kuwait Petroleum Corporation, said in a statement that this fundraising marks a significant step in aligning the company’s financial model with its long-term operational goals.
