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29 December 2008 By Una Galani Follow @ugalani

The oil state’s scrapping of a $17bn joint venture with the US chemicals giant may be financially justifiable. But it still reflects badly on Kuwait s business acumen: after renegotiating the terms only weeks ago, Kuwait now looks capricious and beset by political infighting.

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Kuwait Petroleum Corporation withdrew on December 28 from an agreement to create a $17bn petrochemical joint venture with Dow Chemical of the US. The move follows a reversal of approval from the country's Supreme Petroleum Council.

Kuwait's stateowned energy group was to pay $9bn for half of Dow 's basic chemicals business in a deal struck a year ago. On December 1 2008, KPC renegotiated the price downwards by $2bn.

Dow planned to use the proceeds to help finance its agreed $15bn acquisition of rival Rohm & Haas. The terms of the R&H deal include a $750m termination fee.

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