Blackstone, Brookfield, and KKR Invest $16 Billion in Kuwait's Oil Infrastructure
The Kuwait Oil Company (KOC) has signed a $16 billion lease and leaseback deal for its crude oil pipeline network with a consortium including Blackstone, Brookfield, and KKR. This marks the largest foreign direct investment in the country's history.
The Kuwait Oil Company (KOC) has signed a $16 billion lease and leaseback deal for its crude oil pipeline network with a consortium including the funds Blackstone, Brookfield, and KKR, KPC — the parent company of KOC — announced today. The company noted that this is the largest direct foreign investment in the country's history.
Under the deal, the joint venture in which the foreign investors will be partners will lease 13 oil pipelines from KOC, with a length of about 320 km, and will grant the Kuwaiti company exclusive operation and maintenance rights for a period of 20.5 years. Blackstone, Brookfield, and KKR will hold 49% of the venture (in equal parts), while KOC will hold 51% of the shares and retain operational control over the network. The joint venture will not impose any restrictions on Kuwait's refining or production volumes, which remain subject to the state's decisions.
The joint venture is expected to generate an immediate cash consideration of $7.85 billion for KOC upon the closing of the deal, which will help it realize its plans to reach a crude oil production capacity of 4 million barrels per day by 2035, and will also support Kuwait's efforts to diversify its capital sources and attract foreign investors. The negotiations for the sale of part of KOC's holdings in the oil pipelines began even before the American-Israeli attack on Iran on February 28 of this year.
"The deal sends a powerful message that Kuwait continues to grow as an attractive destination for global capital, despite the challenges in the region," said Sheikh Nawaf Saud Al-Sabah, Deputy Chairman and CEO of KPC.
