NICOSIA, 9 January — Saudi Arabia aims to sign memorandums of understandings (MoUs) with oil majors by April 1 on a gas initiative expected to inject $100 billion into the country's economy, Middle East Economic Survey (MEES) said yesterday.
The Cyprus-based industry newsletter reported that the 10 shortlisted international oil companies (IOCs) had submitted letters of intent ahead of a Dec. 30 deadline.
After a slow start in 2000, the Saudi negotiating team for the Natural Gas Initiative has drawn up a "fast-track timetable under which MoUs with consortiums chosen to carry out three core venture projects will be signed by 1 April," it said.
In the second half of January, the firms will be given access to a data room of the state-run Saudi Aramco in the eastern city of Dhahran and hold meetings with the negotiating team, the weekly said.
A senior Saudi official said on Sunday that a new round of talks with foreign oil companies would take place in mid-January. "The meeting will allow us to present more details and information on the proposed projects to the foreign firms," the official, who is a member of the Saudi negotiating team, said.
MEES said the negotiators would work in February to select the IOCs to carry out the projects in the areas of South Ghawar near Al-Hofuf in the Eastern Province, the Red Sea, and Shaybah in the Empty Quarter of southeast Saudi Arabia.
Only the Franco-Belgian TotalFinaElf is in the running for all three projects. "The method of choosing the successful IOCs -- either through direct negotiations or through the process of bidding -- has yet to be decided," MEES said.
IOC consortiums under lead companies for each project would be formed in March ahead of the signing of MOUs, and detailed negotiations on the ventures would run through the second quarter of 2001.
Saudi Arabia has delivered a list of 25 energy projects covering gas field development, oil refining and power generation to the oil companies, another specialist publication, Middle East Economic Digest, reported last month.
US majors Chevron, Conoco, Enron and Occidental in a joint bid, ExxonMobil, Marathon, Phillips and Texaco have been shortlisted for the Saudi projects along with the European firms BP Amoco, Eni, Royal Dutch Shell and TotalFinaElf.
Riyadh announced in May 2000 that the oil majors made a series of initial proposals during April 16-30 talks that would inject more than $100 billion into the Saudi upstream gas and downstream oil sectors.
Saudi Arabia, which sits on top of the world's biggest oil reserves, has estimated gas reserves of six trillion cubic meters. It has so far ruled out foreign investment in the upstream oil sector.
