JEDDAH, 2 August 2003 — In an effort to increase investor interest in natural gas exploration, the Kingdom is presenting three giant projects in the country’s first-ever licensing round.
Minister of Petroleum and Mineral Resources Ali Al-Naimi was quoted in the Saudi Economic Survey as saying that 41 international energy companies attended a London seminar to hear the contract terms, and said he would hold the auction by the first quarter of 2004.
“After a few years of negotiation it was obvious that there must be a different way of doing business, and that is why we have switched. Exploration and production will be pursued separately... and I think this route is going to yield better success,” he said.
The landmark licensing follows two years of direct negotiations with multinationals for three huge integrated gas, power and industrial projects that collapsed earlier this year because the oil majors and the Kingdom could not agree on the rates of return.
The Royal Dutch/Shell group of companies and Total later signed an agreement with Saudi Arabia estimated to be worth $2 billion to form a joint venture with Saudi Aramco for the exploration of gas in an area of 200,000 sq. km. in the southern part of the Rub Al-Khali.
Also in the news is the Middle East Economic Digest (MEED) latest quarterly edition of the Saudi Arabia Market Report that states that the Kingdom will witness its best year since 1981 in terms of growth, exports, balance of payments, and budget.
