Boeing upbeat over possible Kuwait jet sale, oil price hits some deals

[November 07, 2015]  DUBAI (Reuters) - Boeing <BA.N> on Saturday gave its strongest indication yet about a near-term sale of F/A-18E/F Super Hornets to Kuwait, although the world's second-largest weapons maker said lower oil prices were delaying some arms purchases by Gulf states.

"There are things that we're waiting on... those things are going to be cleared and we think they're going to be cleared soon," Boeing's Paul Oliver said in response to a question on whether discussions about a reported $3 billion F/A-18 deal with Kuwait talks were making progress.

Oliver, vice-president of international business development in the Middle East and Africa for Boeing's defense business, did not name Kuwait specifically.

The United States has not publicly acknowledged talks to sell Boeing fighters to Kuwait, but sources familiar with the matter have said it is in negotiations about selling 24 F/A-18E/F Super Hornets to the Gulf nation in a deal valued at over $3 billion.
 

Sources familiar with the matter told Reuters they hoped it would clear final regulatory hurdles before the end of the year.

In September, Kuwait also signed a memorandum of understanding to buy 28 Eurofighter jets built by Italy’s Finmeccanica <SIFI.MI>, Britain’s BAE Systems <BAES.L> and European aerospace firm Airbus Group <AIR.PA>.

At a news conference on Saturday, Boeing officials said they were working on some fighter export prospects but declined to identify any potential buyers.

Kuwait and other Gulf and Middle Eastern countries are looking to acquire new high-tech military equipment to protect themselves from neighboring Iran and internal threats unleashed by the 2011 Arab Spring uprising.

Gulf governments are also looking to expand and speed up their replenishment of arms due to involvement in the Yemen war but longer-term programs are being postponed as low oil prices shrink state coffers.

"They've put some things on the shelf... they want to be very prudent, but they're focused on needs right now," Oliver said in Dubai ahead of the Dubai Airshow.

Some development programs could be delayed for about three years due to low oil prices for oil-exporting Gulf states, he said.

"I don’t think anybody is looking at any of these things to be over quick," Oliver said.

Procurements for "proven, off-the-self solutions" have accelerated, Oliver added, including Chinook and Apache helicopters.

(Reporting by Nadia Saleem and Tim Hepher; editing by Helen Popper and Jason Neely)

[© 2015 Thomson Reuters. All rights reserved.]

Copyright 2015 Reuters. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.