Failure of the Joint Venture

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Executive Summary On November 28, 2008, The Dow Chemical Company entered into a Joint Venture with State of Kuwait run Petrochemical Industries Company ("PIC"). “PIC” is a wholly owned subsidiary of State owned Kuwait Petroleum Corporation ("KPC"). to launch K-Dow Petrochemicals, a planned joint venture. PIC was to have paid pay Dow $7.5 billion US dollars for its stake. The deal was approved by Kuwait’s Supreme Petroleum Council (SPC). The head of the SPC is the Prime Minister of Kuwait The venture was to manufacture and market polyethylene (PE), ethyleneamines, ethanolamines, polypropylene (PP), and polycarbonate and related licensing and catalyst technologies. PE and PP comprise more than half of world polymer demand.2…show more content…
The Islamic bloc (which holds 21 of the parliament’s 50 seats) had been threatening to question the Prime Minister over a number of unrelated dealings if he and the Emir insisted on pushing the Dow deal through. The Prime Minister demurred and the deal fell through. Kuwait has been in a political crisis since early 2006 when the serving Emir was forced out by parliament in favor of then Prime Minister, who is now Emir. That shift, initiated by the dominant Islamic bloc has ushered an ongoing state of political gridlock that has effectively hamstrung a number of key decisions for Kuwait. The Islamic bloc has also been called the obstructionist bloc and they seem intent to live up to their name. The members are from leading conservative families from around the country and reflect not only local popularity but the delicate political balance the ruling Al-Sabah family must maintain to preserve their own rule. Opposition by Kuwaiti Members of Parliament has also obstructed the passage of a multibillion-dollar project to seek the assistance of foreign oil majors to develop the emirate's northern oilfields. The investment, known as Project Kuwait, has been stalled in parliament since it was first proposed in the mid-1990s. A number of senior officials in the oil sector, which provides 95 percent of public revenues, complained in a statement earlier this month of
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