Kuwait Petroleum Corporation (KPC) has signed a preliminary agreement with Japan's Nippon Export and Investment Insurance to fund various projects worth $1 billion, state news agency Kuna reported.
The agreement was signed between KPC chief executive Sheikh Nawaf Saud Al Sabah and a senior executive of the Japanese company. It will help to boost bilateral relations between Kuwait and Japan, KPC said in a statement on Thursday.
As per the pact, Nippon Export will enable credit facilities for projects executed by KPC and its subsidiaries. The agreement will also lead to increased collaboration between companies from both countries to invest in decarbonisation initiatives, it added.
Oil markets have been extremely volatile this year, with crude prices rising by about 68 per cent from the same period last year due to the Russia-Ukraine conflict and a faster than expected economic recovery globally.
Rising crude prices have pressured energy importers such as Japan and India, which have been reeling under the high oil prices, which climbed to almost $140 per barrel this month to hit a 14-year high.
While Opec+, a 23-member super group of producers led by Saudi Arabia and Russia, and the US have taken steps to ease the tight oil market, underinvestment in the oil and gas sector has left many oil-exporting countries with little ability to ramp up capacity immediately.
Japan's agreement with Kuwait comes as it requests oil-producing Gulf countries to step up production to ease energy supply woes, S&P Global said in its latest report.
Kuwait was the third-largest crude oil supplier to Japan after Saudi Arabia and the UAE in 2021, accounting for 8.5 per cent of the Asian country's total oil imports, S&P said, citing data from Japan's Ministry of Economy, Trade and Industry.