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The bid for Santa Fe could turn out to be Kuwait's most successful diversification move yet. The nation's government-owned Kuwait Petroleum Corp., which is directed by Sheik Ali Khalifa al-Sabah, the country's Oil Minister, already operates a fleet of more than a dozen supertankers. Earlier this year, the firm entered into joint ventures with U.S. companies, giving it a $185 million share in a Hawaiian oil refinery as well as participation in a U.S. oil exploration group. Kuwait, though, has not always been able to buy its way into the American market.Its 1980 attempt to purchase a 15% interest in the Getty Oil Co., the 15th largest American oil firm, fell through when the executors of the estate of the late J. Paul Getty blocked the accord.
With Santa Fe, however, the courting was cordial from the start. Preliminary talks first began last summer between Santa Fe Chairman E.L. Shannon Jr. and Sabah, who initially proposed that Kuwait acquire a 25% stake in the firm to make use of the company's vaunted engineering expertise. Discussions eventually progressed to an agreement in principle to buy the whole company. Santa Fe's board of directors, which includes former President Gerald Ford, gave its approval last week, and shareholders are expected to agree to the deal at a special meeting on Dec. 1. Kuwait will then have moved a giant step closer to being a fully integrated oil company. ∎