Kuwait Oil Company K.S.C. (“the Company”) is a wholly owned subsidiary of Kuwait Petroleum Corporation (“the Parent Company” or “KPC”). The Parent Company is wholly owned by the Government of State of Kuwait. The Company is engaged in exploration, drilling, production and transportation of hydrocarbon resources within the State of Kuwait. The Company is also engaged in the storage of crude oil and its export. Hydrocarbon resources managed by the Company are the sovereign property of the State of Kuwait. Crude oil is extracted from reserves in Kuwait and, on the instructions of the Parent Company, is exported as blended crude or passed to Kuwait National Petroleum Company K.S.C. (“KNPC”) for further processing or to the Ministry of Electricity and Water for power generation. Gas produced is treated similarly. The sales and marketing of crude oil produced by the Company is undertaken by the Parent Company. The Company owns no oil and gas reserves nor any oil and gas inventory other than those required for operations. The Company also provides marine services to KNPC’s Mina Al-Ahmadi and Mina Abdulla refineries and the oil pier at Mina Al-Shuaiba. KNPC is charged for direct and certain indirect costs relating to these activities. The Company charges Group companies for medical and other services provided to their employees. Effective 1 April 2007, the Parent Company changed the reporting structure of the Company to become a profit centre. Prior to 1 April 2007, the Company was reporting to the Parent Company as a cost centre with its costs fully reimbursed by the Parent Company. Under these revised arrangements, the Company’s revenue is determined as the revenue from the sale of crude oil net of certain charges by the Parent Company (see policy on revenue recognition). In addition, 72% of the net profit is payable to the Parent Company as a contribution.

20 Aug 2017