Kuwait witnesses 2.3% drop in oil & gas sector financing in ’23

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KUWAIT CITY, Nov 6: In the first nine months of 2023, financing provided by local banks to the oil and gas sector in Kuwait experienced a decline of 2.3%, totaling 1.375 billion dinars. This decrease represents a drop from the 1.408 billion dinars recorded during the same period in 2022, as reported in the monthly statistics released by the Central Bank of Kuwait for September. The statistics reveal that monthly financing for the oil and gas sector for the month of September saw a notable increase of 97.9%, amounting to 6.2 million dinars.

This surge came after the sector’s financing levels had dipped to 298.7 million dinars in August. However, the most recent figure reflects the lowest monthly financing level in recent times, and it stands in stark contrast to the peak seen in April 2022, when financing reached 350.1 million dinars. On an annual basis, the financing for the oil and gas sector saw a substantial decline of 89.2%, with the September 2023 figure amounting to 51.2 million dinars. This drop is in comparison to the 57.4 million dinars recorded in September 2022. The decrease in financing for the oil and gas sector comes alongside a reduction in new credit facilities. Over the course of nine months, credit facilities have dropped by about 2.45%, amounting to 17 billion dinars in 2023. This decline is in comparison to the 17.474 billion dinars recorded during the same period in 2022.

In particular, personal monthly facilities provided by banks saw a significant decrease of 32.5%, with the total amounting to 2.71 billion dinars for the same period in 2023. This fall in personal facilities stands in contrast to the 4.02 billion dinars reported for the first nine months of 2022. The financing landscape for the oil and gas sector in Kuwait has been marked by fluctuations throughout 2023. This year, oil and gas financing has oscillated, with instances of decline followed by periods of growth. For instance, financing fell from 152.6 million dinars in December to 78.8 million dinars in January. It then saw a significant increase in February, reaching 243.3 million dinars. Subsequently, the trend reversed with a decline in March to 61.2 million dinars, followed by an upturn in April to 159.2 million dinars. May saw a further increase to 274.3 million dinars, but June witnessed another dip to 169.1 million dinars.

July saw financing at 84.9 million dinars, but it jumped again in August to reach 298.7 million dinars. The cumulative balance for financing in the oil and gas sector provided by local banks exhibited a decline on an annual basis. This decrease amounted to 10.4%, totaling 291 million dinars. Specifically, it fell from 2.804 billion dinars in September 2022 to 2.513 billion dinars in the same month in 2023. Additionally, the cumulative balance for oil and gas financing decreased by 5.2% over the course of 2023, reaching 2.513 billion dinars in September. This decline is in comparison to the balance of 2.651 billion dinars reported at the end of December. Notably, the balance of oil financing has experienced fluctuations. In September 2022, it reached its highest level in two years. It was reported at 2.804 billion dinars, indicating an increase. The balance of total cash credit facilities, covering various sectors provided by banks, increased during the first nine months of 2023. The growth amounted to 0.7%, reaching 381.7 million dinars. This increase is in comparison to the 52.447 billion dinars recorded in December, which grew to 52.828 billion dinars by the end of September.

By Ahmad Fathi
Al-Seyassah/Arab Times Staff

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