Kuwait, Oman agree to build oil refinery

MUSCAT: Oman Oil Company and Kuwait Petroleum International signed Monday an agreement to build a refinery worth around $7 billion in the sultanate's southern port town of Duqm.

The 50-50 joint venture will have a capacity of 230,000 barrels per day when completed in 2019, Oman Oil Company chief Hilal al-Kharusi said at the signing ceremony in Muscat.

The two partners will provide up to 35 percent of the investment capital, while the rest will be raised from local and international banks, he said.

Bakheet al-Rashidi, chief executive officer of Kuwait Petroleum, said the project serves his company's strategy of diversifying revenues.

The sultanate derives 79 percent of its revenues from oil, of which it produces only about one million barrels per day.

Kuwait has a significant oil wealth and pumps around 2.8 million barrels per day.

Gulf states have been hit hard by a cash crunch due to a sharp drop in oil prices since June 2014.

Most of them have introduced austerity measures and have decided on a series of measures to boost non-oil revenues.