Kuwait Energy signed a swap deal with Vitol whereby a financing facility of up to US$100 million will be repaid with oil, to boost production at current assets, the energy firm said.
The Gulf firm has received the first drawdown of $40 million on Dec. 22 of the facility, which will be repaid to Vitol via Kuwait Energy’s Iraqi crude entitlement.
“This agreement will enable Kuwait Energy to continue and expedite its early production efforts in Block 9, Iraq; bringing more wells on stream, increasing production and enhancing overall value,” the company said in a statement.
US$80 million of the proceeds will be spent on Block 9 development and the remaining US$20 million to be spent on Egyptian assets.
Sara Akbar, chief executive of Kuwait Energy said the facility will also help the company ramp up their production in Egypt.
“This agreement provides the company with a long-term buyer for our Iraqi crude while ensuring the availability of capital to continue the development,” she said. “Despite the difficult market conditions, Kuwait Energy was able to mitigate the risks throughout 2016 and protect its cash position while growing the business focusing on optimal value generation for our shareholders.”