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Kuwaits Supreme Petroleum Council urges PIC to reach settlement with Dow

August 26/2011

(Arabian Oil and Gas) -- Kuwaits Supreme Petroleum Council has verbally requested that the state-back Petrochemical Industries Company (PIC) tries to reach an amicable settlement with Dow Chemical over disputes following the cancellation of the USD 17.6 billion K-Dow joint venture, before any judgment is handed down.

Under the deal, cancelled by Kuwait in December 2008, K-Dow Petrochemicals was to be a USD 17.4 billion multinational 50/50 joint venture between Dow and PIC in which the company was to become the leading global supplier of petrochemicals and plastics.

Under the joint venture agreement, both parties committed themselves to an arbitration process in case of disputes, and a liquidated damages clause of USD 2.5 billion. Dow Chemical has reportedly stated the damages they are seeking may be in excess of that amount. The SPC is now verbally urging the PIC to do a deal outside the formal arbitration process.

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