Kuwait scraps oil services unit in latest move to overhaul industry

Kuwait has abolished its state-owned Oil Sector Services Company after two decades.

Analysts said the OSSC closure was the latest move in an overhaul of Kuwait’s oil sector approved in 2024. The government aims to cut costs and streamline operations by merging and abolishing subsidiaries under the control of the Kuwait Petroleum Corporation (KPC).

Oil minister Tareq Al Roumi issued the decision to liquidate OSSC, which provided support services to oil workers and their families. Local liquidators will now complete the dissolution, Kuwait’s media reported on Monday, citing the Official Gazette.

“The decision by the minister followed a decision in June 2025 by the Supreme Petroleum Council to liquidate the company,” one report said.

No official explanation has been given, but the report cited the company’s statute stipulating that it should be dissolved at the end of its operational life.

Kuwaiti analysts believe the move is part of the strategy to restructure the country’s hydrocarbon sector.

“This was expected as there was a similar decision more than 10 years ago,” said Ali Al Anzi, manager of the Kuwaiti Al Manakh economic consulting centre. “I believe that it is part of the restructuring plan.”

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The restructuring includes reducing the number of oil companies through merger and abolition. Kuwait has eight main state-owned oil companies and controls nearly 101 billion barrels of recoverable crude deposits.

Executives said last August that KPC was “pushing ahead” with the merger of the Kuwait National Petroleum Company (KNPC) and the Kuwait Integrated Petroleum Industries Company (KIPIC).

KIPIC manages the southern Al Zour refinery, one of the world’s largest refining units with a capacity of 615,000 barrels per day.

The merger is “part of overall restructuring in the country’s oil industry”, KNPC chief executive Wadha Al Khateeb said last year.

The OSSC was established in 2005 and provided services including health and social support, security for oil facilities and company assets, housing and consulting, according to the state directory.