27 May 2013 15:45 [Source: ICIS news]
SINGAPORE (ICIS)--Kuwait’s government on Monday accepted oil minister Hani Hussein’s resignation ahead of an expected probe in parliament over a $2.5bn compensation payment to US-based Dow Chemical for a collapsed business deal.
“Oil Minister Hani Hussein’s resignation was approved in a decree on Monday,” state minister for cabinet affairs Sheikh Mohammad Abdullah Al-Mubarak Al-Sabah said in a statement.
Meanwhile, finance minister Mustafa al-Shamali will assume responsibilities as acting oil minister according to a decree which approved the step, Al-Sabah added.
Hani Hussein, facing criticism from a number of Kuwaiti lawmakers demanding investigation into the collapsed Dow deal, had offered his resignation last week to avoid being grilled by MPs. Resignation was pending approval of the Kuwaiti ruler.
Hani Hussein chose to resign after the government last week replaced Kuwait Petroleum Corporation’s chief executive and reshuffled its board after Petrochemical Industries Company (PIC) gave a cash payment to Dow Chemical for a cancelled project. Several members of the KPC's downstream arm PIC, have also been suspended.
In 2008, PIC pulled out of the $17.4bn ‘K-Dow’ plastics project with Dow, citing poor market conditions during peak global economic crisis, and after lawmakers raised objections to the deal.
K-Dow was the polyethylene (PE) joint venture that Dow had agreed to create with PIC. Once PIC pulled it, Dow and PIC had agreed to resolve their contractual disputes through the International Chamber of Commerce's (ICC) International Court of Arbitration.
In March, the International Court of Arbitration of the ICC released the final award amount, consisting of the partial award of $2.16bn announced in May 2012, plus $318m in interest and costs, a decision contested by the Kuwaiti company.
Last month, Dow announced the verdict had been upheld, and that additional costs and interest had pushed up the payment to $2.48bn.
($1 = €0.77)
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