Kuwait Voices Regret, Astonishment At British BP Move
Oct. 09, 1988
KUWAIT (AP) _ The government expressed ''extreme regret and astonishment'' Sunday at Britain's demand it more than halve its stake in British Petroleum Co. and said it has taken steps to protect its foreign investments.
But an official statement did not say what those measures were.
The statement was the first official comment by Kuwait since Britain's Trade Secretary, Lord Young, told Kuwait on Tuesday to reduce its holding in BP from 21.69 percent to 9.9 percent over the next year.
The statement was announced by the Minister of State for Cabinet Affairs, Rashed Abdul-Aziz al-Rashed, after the weekly cabinet session chaired by Kuwait's crown prince and prime minister, Sheik Saad al-Abdullah al-Sabah.
In response to a reporter's question after the cabinet session, al-Rashed said: ''The cabinet has discussed this subject and decided to take all necessary steps to protect Kuwait's economic interests in Britain.
''Kuwait expressed its extreme regret and astonishment at the decision of the British government to reduce the stake of Kuwait in BP from 21.6 to 9.9 percent,'' he said.
''The government studied all suitable measures and at all levels with a view to protecting its economic interests and its investments abroad,'' he said.
Kuwait has an estimated $85 billion of accumulated petrodollars from the oil boom years of the 1970's in overseas holdings. One-fifth of that is invested in Britain.
Britain's Monopolies and Mergers Commission had advised that the Kuwaiti investment might ''operate against the public interest'' and the Trade Secretary acted on that recommendation.
The investments are placed through the state-owned Kuwait Investment Office. The London-based KIO bought 1.316 billion BP shares after the British government sold off its one-third stake in the oil giant last year.
The KIO stands to lose an estimated $676 million at current market prices if it cuts its BP holdings to the level the British demand.