Opportunities are numerous as reconstruction proceeds - Kuwait

Despite expenses incurred from the Gulf War, Kuwait is still one of the wealthiest nations in the world, and opportunities for U.S. exports are numerous as Kuwait's reconstruction continues. Overall, the reconstruction of the oil sector will cost $8-10 billion over the next 5-10 years, and total reconstruction and restocking will cost $20-25 billion through 1996. In 1992, U.S. contracts may equal as much as $3 billion. American exports of oil and gas field equipment and services will top the export list. Other excellent prospects for U.S. exports include: electric power systems, telecommunications equipment and services, automobiles, automobile parts and service equipment, operation and maintenance services, airconditioning and refrigeration equipment, safety and security equipment and systems, computers and peripherals, avionics and ground support equipment, and consumer goods.

As Kuwait rebuilds, the government will focus on high priority major projects which include: the rehabilitation of refineries, building an oil and gas processing plant and associated facilities; restarting the $350 million Amiri Diwan Project; a $1 billion overhaul of the telecommunications system including possible privatization; reconstruction and upgrades for Kuwait International Airport and support facilities; the updating and further restocking of Kuwait University, 18 technical schools, and numerous primary schools and secondary schools; and the defining and implementing of a national security plan, including further rebuilding of Kuwait's military sector. The government of Kuwait may also decide to proceed with the 1989 contract awarded to Mitsubishi for constructing a new power plant at Doha. The U.S. Army Corps of Engineers' project management contract for rebuilding Kuwait's two military airbases offers further opportunities for American exports.

The Kuwait government will use debt financing and continued draws on its earnings from foreign investments and crude oil sales to pay for reconstruction. Kuwait's resources include a sizable portion of its pre-war foreign investments - estimated at over $80 billion before the war - and oil reserves, which stood at nearly 100 billion barrels before the war.

Currently, Kuwait is producing about 620,000 barrels of oil per day, exporting 300,000 barrels of crude oil per day, and is refining almost 200,000 barrels per day. Kuwait's Minister of Oil is confident that by the end of 1992, crude oil production will be at pre-war levels of 1.2-1.5 million barrels per day, and exports of crude oil should reach one million barrels per day. To achieve these goals, the state-owned Kuwait Oil Company will speed up its aggressive plan in the next year to drill as many as 300 new oil wells, recover 200 of the 751 damaged oil wells, and fix gas and oil separator systems.

American businesses may consider joint-venture possibilities with Kuwait's private sector to reestablish certain manufacturing facilities, such as the Refrigeration Industries Company's airconditioning manufacturing plant and the Kuwait Pharmaceutical Industries Company plant. The government of Kuwait continues to encourage the private sector to establish sound, economic joint ventures.

Because Kuwait's total population is only 1.2 million, almost half the pre-war figure, Kuwait's government will continue to be the prime customer for many firms. U.S. firms that show patience and persistence, have a well-planned strategy, and obtain a good Kuwaiti agent will find sources for business in Kuwait over the long term. For more information contact the Commerce Department's Gulf Reconstruction Center at (202) 377-5767.

COPYRIGHT 1992 U.S. Government Printing Office
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