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Sheikh Ahmed Al Jaber Al Sabah granted Kuwait Oil Limited Company with the participation of Protol British Company "BP" and American Oil Gulf Company "Gulf Oil" the right of franchise of concessionaire to explore oil in all Kuwait lands and territorial water for 75 year period and this was on 23rd December 1934. However, when the first oil field is discovered in the State of Kuwait in 1933 and specifically at Burgan Area and then, discovery is continued. First shipment of oil was exported in 1946. When Kuwait obtained its independence in the era of Sheikh Abdulla Al Salem Al Sabah, First Ministry was formed which included Ministry of Finance and Economy and such Ministry was looking after oil affairs in that time.
This situation continued until the late His Highness Sheikh Sabah Al Salem Al Sabah took over the emirate of the State of Kuwait at the end of 1965 and he accordingly became the 12th Ruler of the State of Kuwait. His Highness adopted proper policy distinguished by highest wisdom.. His Highness since he took over ruling realized the extent of oil importance upon the life of the country. Then he issued several laws to achieve the actual control and perfect sovereignty over the capabilities and resources of the State including oil resources which forms substantial goal for the petroleum policy of the country achieving thereby consecutive victories the most significant which was signing the partnership agreement on 29th January 1974 between the Government of the State of Kuwait and B.P. Kuwait Limited Company and Gulf Kuwait Company.
Then His Highness issued an Amiri Decree dated April 1975 under which it is resolved to separate Ministry of Oil from Ministry of Finance and nationalizing the oil industry by signing the agreement for control by the State of Kuwait over oil resources and subsequently the agreement for passing of all the two companies rights to the State on 16th March 1996 and imposing the complete control of the State over their interests in Kuwait.
Since the beginning of the first stage of oil production and export, State of Kuwait drawn and executed a clear petroleum policy aiming to achieve best benefit for the country. Such policy is developed with the developments which the petroleum industry has passed through either on the local or international level and Kuwait petroleum policy remained seeking always to achieve the complete ownership of oil sector.
One of the substantial reasons for the ownership of Kuwait over its petroleum resources is located within its desire for complete control over production, pricing and operational policy for crude oil discovery in accordance with its national and strategic interest.. these steps were necessary to take the required decisions in respect of specifying the production dates of crude oil and development rates of petroleum sector and the shapes of such development so as to serve the development policies and essential interests of the country and to secure the best exploitation of such resources throughout the possible long period of time, maintaining them and preventing its exhaustion or wasting them as a guarantee for the future and prosperity of the next generations.