Kuwait Modernises the KPC Law, and Bans Local Agents on Its Contracts: What Decree-Law No. 67 of 2026 Means

On 28 June 2026, Decree-Law No. 67 of 2026 appeared in the Official Gazette (Kuwait Al-Youm), Issue 1797, amending the founding statute of the Kuwait Petroleum Corporation, Decree-Law No. 6 of 1980 (as amended by Law No. 54 of 1982). The instrument replaces the texts of ten articles. It both widens KPC's commercial freedom and, in the same breath, closes the door on local-agent and commission structures across the KPC group.

Why this matters

KPC sits at the centre of Kuwait's economy. Any change to its founding law reaches its subsidiaries, its contractors, and the banks and investors that finance them. The 2026 amendments change where decisions are made, how projects are financed, what KPC may now do, and, most immediately for the supply chain, how suppliers are allowed to win its work.

The headline for vendors: a ban on local and commission agents

The single most commercially significant change is a new Article 18. It prohibits using a local agent or a commission agent to contract with KPC or its wholly-owned companies, in any form whatsoever, and it reaches both the signing and the performance of the contract. For the supply chain this is seismic: foreign and local suppliers that have historically appointed a Kuwaiti agent, or paid a percentage success fee, to win KPC-group work can no longer structure it that way. Two features make the ban hard to draft around. First, it is a public-order prohibition, so an offending arrangement is exposed to being void rather than merely unpaid. Second, the words "in any form whatsoever" target substance over form: renaming a commission an advisory fee, or changing who pays it, does not cure it, because a fee contingent on winning the contract is the hallmark of commission agency, and the local-agent limb catches the introducing-and-steering role however it is paid. Nor does a foreign governing law rescue the fee, since a tribunal applying English law will not enforce performance that is illegal where it must be performed, or paid influence over State procurement. The one real limit is scope: Article 18 reaches KPC and its wholly-owned companies only, so genuinely part-owned joint-venture vehicles, and every non-KPC government buyer, fall outside it. The explanatory memorandum presents the ban as an efficiency measure, intended to remove the cost to KPC and its wholly-owned companies of a mandatory intermediary.

A commercial mandate, and a renewable-energy remit

Article 1 confirms KPC as a public institution of an economic nature with independent legal personality, managed on commercial bases under the Minister of Oil. Article 3 then widens its purposes to include generating renewable energy for the needs of the Corporation and its subsidiaries, with the consent of the Ministry of Electricity, Water and Renewable Energy where output is supplied to the national grid. For a hydrocarbons group, that places decarbonisation of operations inside the corporate object rather than outside it.

Financing, capital markets and the audit carve-out

Article 5 sets out KPC's commercial toolkit: incorporating wholly-owned joint-stock companies, taking stakes without a minimum number of founders, restructuring and merging subsidiaries, borrowing, and issuing bonds in local and foreign markets. Financing steps now require Supreme Petroleum Council approval, which moved up from the Council of Ministers. In parallel, Article 22 removes KPC from the prior-control regimes of the Audit Bureau (Law 30/1964), Law 66/1998 and the Financial Controllers Authority (Law 23/2015), shifting it from ex ante control toward commercial-style oversight. Treasurers and arrangers should treat Council approval as a condition precedent in their documentation.

Strategy, execution and procurement

The amendments draw a sharper line between oversight and delivery. Article 16 keeps strategy, changes to capital, and approval of the budget and accounts with the Supreme Petroleum Council. Articles 13 and 14 place day-to-day management with the Board, chaired by the Minister of Oil, and introduce a Chief Executive Officer appointed by decree for a renewable four-year term as Vice Chairman. Article 14 also lets the Board adopt the rules for tendering, awarding and concluding the contracts of KPC and its wholly-owned subsidiaries, except those that remain subject to Public Tenders Law No. 49 of 2016, so bidders should read each tender against the regime that actually governs it.

WEFAQ advises

Vendors and agents should map every KPC-facing engagement against Article 18 now: collect anything already earned from work completed before 28 June 2026, wind down the agent or commission role going forward, and preserve only genuine, severable fixed-fee services where the supplier deals with KPC directly. For new work, the compliant routes are a genuine subcontractor position with real deliverables, a genuine equity or joint-venture stake, or fixed-fee professional services that sit outside the agent function. KPC-group counterparties and lenders should separately confirm which approvals have moved to the Board and which remain with the Supreme Petroleum Council before the next contracting or financing round.

Source: Decree-Law No. 67 of 2026, Official Gazette (Kuwait Al-Youm) Issue 1797, dated 28 June 2026.

Disclaimer: This article is provided for general information only and does not constitute legal advice. For advice specific to your circumstances, please contact WEFAQ Law Firm.