Al Zahem International Group: Kuwait’s Oil and Gas Projects

The continued uncertainty around the fiscal health of the Western European economies is clouding the outlook on global economic recovery. Of course, this would have an impact on the oil and gas sector in 2012-2013. Also, as a result of the regional situation, anything could happen at any time. What is your take on the global oil and gas sector and what are the implications for the Kuwaiti sectors?

Oil and gas will continue growing steadily, unless we have a problem between the United States and Iran over nuclear weapons. In general, I think oil and gas will be very important to this country, the whole region and the world. Increases will depend on the economy of the world. Today, nobody will be able to give you a one hundred percent accurate picture of what will happen – we can only hope for the best.

Kuwait Petroleum plans to raise production capacity to four million barrels per day by 2020. There has also been an ambitious Kuwait Development Plan that largely focuses on investment into the oil and gas sector. What is the progress with the plan, and what can we expect for the future?

Reaching the production of four million barrels per day is possible, but the only problem is internal politics. Politics always interferes with the economy. The world has seen the political difficulties our country has been going through, especially in the last six years.

For the Development Plan, Kuwait has set a budget of around 37 billion K.D., or around 130 billion dollars. However, we need stability in our political situation. If that happens, I think the government of Kuwait would like to proceed with the plan. If the difficulties between the government and the parliament are solved, I think the plan could be achieved, and the whole country would benefit.

Could you give us a brief overview of Al Zahem Group, which sectors you are active in, and what you would like to achieve in the future?

The Group has always had ambition to grow, and we have seen the Group developing greatly in the last seven years as a company. This is why we achieved several high projects where we served and delivered on time. We have a lot more ambition. We want to see how the government of Kuwait will help the private sector to develop. We will be developing in all sectors – in trade, contracting, services, stocks, and others.

Where do you see opportunities for oil and gas in Kuwait?

For international companies, there are many opportunities. We have the fourth refinery coming, and there are several projects related to that which are also coming. The infrastructure of the oil and gas business in Kuwait has not been tackled for many years, and the government and people of Kuwait depend a lot on the revenue from oil. We have a lot of opportunity for the private sector and for international companies.

Of course, you would like to position yourselves as one of the leading suppliers of the oil and gas projects.

Oil and gas is not an easy operation, and twenty years to develop yourself is not that long of a period. Oil and gas has no limit, but it is risky, and you have to be very careful how you run your business, and how you develop it in years to come. This is why we are conservative in our development strategies.

What are some of the leading projects that you are working on?

We are hoping to achieve several projects. One pertains to Kuwait’s pipelines, most of which are very old, and require total changing. This is a huge number of pipelines. We are also moving forward on the refinery. We want to link with international companies that we would like to represent.

We are also looking at the power station of Kuwait and its many needs. Every year, Kuwait require more electricity and water. Most of what we have today is only fulfilling the basic requirement, so every year, there is a new project that attempts to address Kuwait’s needs. There are a lot of new power stations to be built, and a lot of the old stations will be renewed with new technology.

Is your objective to become regional, with projects in Iraq, for example?

Our objective today is to find larger international companies whose growth we are happy with, and with which to link ourselves. We want to become more specialized with international companies that have the technology and experience to come to Kuwait, to help them enter the Kuwaiti market, and find business for them.

 We are especially interested in trade, contracting, and stocks. Within these fields, we are happy to represent any international company. We have been representing large, prestigious companies for many years, and we are very happy with each other.

What geographic regions are you hoping to attract companies from?

The problem we are facing in Kuwait today is the tendering system; to win your tender, you have to have the cheapest price for an accepted tender. Many companies in India or South Asia are always more competitive, or cheaper, than American, European, or Japanese.

Therefore, we would like Kuwait’s current system to change, where the tender should not be the cheapest, because quality plays a role.

How do you attract companies; what makes you unique?

Our strength is that most of the people working with us have either been in the oil sector and are retired, or were experts from the beginning.

Companies that want to be successful want to see that they will work with a company that can show them the way and give them results.

Other companies have told us that Western companies are hesitant to do business in Kuwait because they know it is difficult, especially with the lack of regional stability. How can you help these companies overcome such challenges and to capitalize on the huge business opportunities in Kuwait?

Very simply, any business interested in Kuwait requires a kind of presentation to introduce them to Kuwait, and to show them the difficulties, the positive aspects, and the opportunities for future successes that they might have. Any place in the world has difficulties, but if a company wants to come to Kuwait, we are local people who understand the business, the culture, the mentality of the government, and we would make it easy for them. Nothing is easy, but I would not say there is no stability here. The government is still strong. Some changes to the law are necessary to help international companies enter Kuwait and invest here, and we can help them a lot.

Do you have any further messages to add for our viewers and readers?

This country has a lot to give. We hope there will be political stability between the parliament and the government. There are a lot of opportunities. I wish more companies would visit our country, and go the Chamber of Commerce and the Ministry of Trade, and try to link themselves with quality companies that later on reflect on their results and the name of Kuwait. This goes for all fields, including schools, roads, hospitals, education, oil and gas, power stations – anything! If we have political stability, Kuwait would be one of the most developing countries in the whole world.