Kuwait refers $800 million Shell deal to judiciary

Kuwait has referred a $800 million gas contract between state-owned Kuwait Oil Co. and Shell to the public prosecution to investigate suspected irregularities, a newspaper report said on Tuesday. The decision follows a report by a special probe panel to investigate the gas development contract, Oil Minister Hani Hussein told Al-Rai newspaper. “After reading the report of the fact-finding panel in the Shell contract, I found some matters mentioned and I thought it is appropriate to refer the file to the public prosecution to investigate any suspicions,” the newspaper quoted the minister as saying. The probe panel was formed by the former oil minister to review procedures leading to the awarding of the Enhanced Technical Services Agreement in February 2010 and examine the implementation of the deal. The contract was awarded to Shell to help the oil-rich emirate develop its non-associated natural gas fields in the north of the country after initial production hurdles. Kuwait plans to produce around one billion cubic feet of free gas by 2016 up from the current modest output of 140 million cubic feet. A parliamentary probe panel is also investigating the same deal after MPs in June raised questions about how the contract was awarded to Shell without competition. Hussein said the referral of the issue to the judiciary will not hinder the work of the parliamentary probe. The minister also said he has referred to the public prosecution a report by another probe panel on suspected smuggling of subsidized diesel.