Business
‘KPC’s new venture is on the right track’
THE recent announcement by Kuwait Petrochemical Industries Company (KPIC), a subsidiary of Kuwait Petroleum Corporation (KPC), for its acquisition of a 25 percent stake in China’s Wanhua Chemical Group has sparked both interest and questions regarding the benefits for KPC, and the rationale behind such an investment. Is the purpose of the venture merely to secure a market for selling naphtha? If so, does this imply that KPC’s marketing capabilities are no longer capable of selling naphtha on the international market, despite having done so since 1966 from its Shuaiba Refinery?
In fact, KPC was the first national oil company in the world to export naphtha. Another miscalculation by KPC is the decision to rent and store Kuwaiti crude oil in South Korea, without clear rationale, advantages, or tangible benefits. This comes at a time when the global oil market is already oversupplied, with OPEC+ itself increasing output and pushing prices downward. Can anyone at KPC clearly explain the strategic or financial justification for storing Kuwaiti crude in Korea? Beyond the added costs of shipping and storage, there is also the missed opportunity of selling the crude promptly on the open market, unless the crude is being sold directly to domestic Korean refineries, likely at discounted prices.
Furthermore, investing over $640 million in a venture in China, which is KPC’s first direct investment in that market, solely to market one product, naphtha, raises several concerns. Naphtha is not a competitive feedstock compared to natural gas, which is widely recognized as cheaper, cleaner, and more economical for petrochemical production. This casts doubt on the main purpose of the investment. If the purpose is not limited to using or selling naphtha, then the investment appears to be more financial in nature than operational. However, KPC is not lacking in experience or capability when it comes to marketing millions of tons of naphtha globally.
This brings us to another notable development in the oil industry: Shell Oil International has decided against fully acquiring another major oil company, BP. Despite BP’s underperformance compared to its industry peers and its urgent need for restructuring to regain its position among the “Seven Sisters,” Shell chose to walk away from the idea. Such an acquisition would have taken more than two years to properly integrate into Shell’s overall system, requiring a complete reorganization, significant time and effort, and a strong focus on manpower reduction and costcutting in all areas. Instead, Shell chose to focus inward by streamlining its own operations to be more closely in line with the structure and efficiency of its American oil industry peers. Investing in petrochemicals is, in principle, a good strategy. However, what are the overall benefits and strategic advantages for KPC? We hope that selling a few hundred thousand tons of naphtha is not the main purpose behind such an acquisition, especially at such a high cost.
By Kamel Al-Harami Independent Oil Analyst
Hamad Malallah
KUWAIT CITY, Aug 14: United Projects for Aviation Services Company (UPAC), a commercial real estate and facilities management company, today announced its financial results for the second quarter of 2025. For the six months ended June 2025, the company reported net profits of KD 497 thousand, down 62% from 2024, or 0.94 fils per share, with revenues of KD 3.29 million down 25.6% from 2024.
Eng. Hamad Malallah, Chief Executive Officer at UPAC, said: “The second quarter presented a transitional period as we successfully concluded the project to manage and operate Terminal 1 at Kuwait International Airport, officially handing it over to the Directorate General of Civil Aviation (DGCA) in May 2025. While this shift has naturally impacted the company’s revenues, it also paves the way for new avenues of growth and development as we focus on future projects and strategic partnerships. It is important to note that UPAC built the entire project and operated it throughout the contract term before transferring it to the DGCA under the Build, Operate, and Transfer (BOT) system. We take great pride in the success of this national project over 26-year and in delivering it to the State.”
Malallah continued: “I’m pleased to share that in July, we welcomed our first operator at Messilah Beach: Villa Shams, Kuwait’s first ladies-only beach club. Officially opened on 10 July 2025, Villa Shams offers a premium, private experience designed exclusively for women, in a secure and refined setting. This milestone reflects UPAC’s vision to create inclusive recreational environments that cater to all segments of society.”
“Planning for other areas on the Messilah Beach site has also been progressing steadily. Our teams are actively working alongside confirmed operators, both global and local brands, to support their on-ground preparations for upcoming openings with a list of exciting tenants. We are looking forward to be bringing an exceptional, family-friendly beach destination experience to Kuwait through Messilah Beach, which is set to become a vibrant, year-round destination,” added Malallah.
Malallah concluded: “We remain committed to identifying and pursuing strategic business opportunities within our industry that drive growth and create value for the company and its shareholders.”
Al Messilah Beach, one of Kuwait’s prime family entertainment destinations, was developed by Touristic Enterprises Company as part of its role in spearheading growth of Kuwait’s tourism sector. UPAC is managing all aspects of the site including leasing, entertainment activities, facility management, and overall project operations.
UPAC is a co-investor in Abu Dhabi’s $1.3 billion Reem Mall on Reem Island. Reem Mall is Abu Dhabi’s latest signature shopping, dining, and entertainment family destination spanning an impressive 183.4K sqm GLA. Anchored by a hyper-market and various notable entertainment and home furnishing concepts, the mall will be home to around 400 international and local brands. Snow Abu Dhabi, one of the mall’s entertainment anchors, is the city’s only snow park. The mall also has one of the largest home furnishing offerings in Abu Dhabi as well as one of the largest Carrefour outlets in the city. One of the prominent new openings was Sharaf DG, an expansive 3,334sqm electronics retail space with 34 brand experience zones making it the largest store of its kind in Abu Dhabi.
The mall is one of the region’s first fully integrated omnichannel retail ecosystems with digital, e-commerce, and logistics capabilities. It brings together all consumer and retail services to ensure a seamless customer experience.
As of June 2025, around 66% of GLA is open and trading, with an additional 14% under fit-out, bringing the effective leased GLA to 80%. As of date, Reem Mall has also secured signed proposals covering a further 4% of GLA. Key performance metrics continue to show strong momentum, with footfall and tenant sales increasing by 30% to 40% year-on-year. Notably, the mall achieved two consecutive record-breaking months in May and June 2025, setting new highs for both visitor numbers and sales.
Currency traders watch monitors near a screen showing the Korea Composite Stock Price Index (KOSPI), left, and the foreign exchange rate between US dollar and South Korean won at the foreign exchange dealing room of the Hana Bank headquarters in Seoul, South Korea, on Aug 14. (AP)
MANILA, Philippines, Aug 14, (AP): Asian shares were mixed on Thursday after days of gains driven by hopes for lower US interest rates, while US futures slipped. Bitcoin rose more than 3% to a new record of over $123,000, according to CoinDesk. In Tokyo, the Nikkei 225 fell 1.3% to 42,705.36 as investors sold to lock in recent gains that have taken the benchmark to all-time records.
The Japanese yen rose against the dollar after US Treasury Secretary Scott Bessent said in an interview with Bloomberg that Japan was “behind the curve” in monetary tightening. He was referring to the slow pace of increases in Japan’s near-zero interest rates. Low interest rates tend to make the yen weaker against the dollar, giving Japanese exporters a cost advantage in overseas sales.
The dollar fell to 146.31 Japanese yen early Thursday, down from 147.39 yen. The euro fell to $1.1703 from $1.1705. In Chinese markets, Hong Kong’s Hang Seng index shed less than 0.2% to 25,655.26, while the Shanghai composite index added 0.1% to 3,686.07. South Korea’s Kospi fell less than 0.1% to 3,222.99, while Australia’s S&P ASX 200 index added 0.5% to 8,866.70. Taiwan’s TAIEX fell 0.5%, while India’s Sensex edged 0.1% higher.
“Asian markets opened today like a party that ran out of champagne before midnight – the music still playing, but the dance floor thinning out,” Stephen Innes of SPI Asset Management said in a commentary. The futures for the S&P 500 and the Dow Jones Industrial Average were down less than 0.1%. On Wednesday, US stocks ticked higher, extending a global rally fueled by hopes the Federal Reserve will cut USinterest rates.
The S&P 500 rose 0.3% to 6,466.58, coming off its latest all-time high. The Dow climbed 1% to 44,922.27, while the Nasdaq composite added 0.1% to its own record set the day before, closing at 21,713.14. Treasury yields eased in the bond market in anticipation that the Fed will cut its main interest rate for the first time this year at its next meeting in September.
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