KUWAIT PROJECT HEAD RESIGNS; DEPUTY IN CHARGE, AND

C O N F I D E N T I A L KUWAIT 000311

SIPDIS

SIPDIS

LONDON FOR TSOU
DEPARTMENT OF ENERGY FOR IE
EB/ESC/IEC FOR GALLOGLY, DOWDY

E.O. 12958: DECL: 01/30/2016
TAGS: ENRG EPET ECON BEXP KU OIL SECTOR
SUBJECT: KUWAIT PROJECT HEAD RESIGNS; DEPUTY IN CHARGE, AND
FRUSTRATED

REF: 05 KUWAIT 5081

Classified By: ECONOMIC COUNSELOR STEPHEN CARRIG FOR REASON 1.4 (b) and
(d)


1. (C) At a January 29 New Technology Conference sponsored
by Schlumberger, Kuwait Project Executive
Assistant Managing Director Hashem Al-Rifaei confirmed to
Econ Officer that Kuwait Project Managing Director and former
KOC Chairman Ahmed Al-Arbeed had resigned from the company as
of January 25. Al-Rifaei said that Al-Arbeed is in the
process of moving to Dubai to "become the CEO of a new
company, which is basically a front for the UAE royal
family." (Comment: He might have been referring to the
DanaGas project, as reported in reftel.) Al-Rifaei was not
sure about the new timeline for Kuwait Project, only saying
that it is a "matter of determination" whether the new Amir
and whatever Cabinet he forms has the will to push the
project through Parliament.


2. (C) Al-Rifaei confirmed that he is now in charge of the
Kuwait Project division of KPC, but he voiced frustration
that he would not automatically be named the next Managing
Director of the company. He compared KPC's succession plans,
or lack thereof, to the same lack of concession plans in the
GOK that kept the ruling family and government preoccupied
for the past few weeks. "There are no succession plans"
within KPC or the subsidiaries, he said. He said that KPC
and the Ministry of Energy has known since September 2005
that Al-Arbeed was leaving but did not put any succession
plan in place.


3. (C) Providing another example of what he perceived as
mismanagement at KPC, Al-Rifaei said that Shaykh Talal Khaled
Al-Ahmed Al-Sabah (cousin of Energy Minister Shaykh Ahmed
Fahd Al-Ahmed Al-Sabah),Managing Director of KPC's new Oil
Sector Services (OSS) subsidiary, would "probably leave the
company soon," and that OSS Deputy Chairman Ali Al-Ubeid "is
not qualified for the job." He said that Al-Ubeid and others
had been brought in and "paid higher than many current
long-serving employees" but was not up to the job. He
suggested that KPC might just dissolve the new company if
Shaykh Talal leaves, rather than to keep on the "unqualified,
high-salaried" employees.


4. (C) Al-Rifaei has worked for KPC for many years. Asked
for his opinion on Kuwait's best Minister of Energy or Oil in
his time with the oil industry, he immediately named Dr. Adel
Khalid Al-Subaih. Dr. Al-Subaih was Minister of Oil from
February 2001 to July 2003, and previously served as Minister
of Electricity and Water, Minister of State for Housing
Affairs, Minister of Islamic Affairs, and Minister of Public
Health. He also served on Kuwait's Supreme Petroleum Council
in the 1990s. "Despite his short tenure," Al-Rifaei said,
"he got things done."

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LeBaron