JEDDAH, 17 November 2003 — Saudi Arabia’s new gas deal with oil giants Royal Dutch Shell and TotalFinaElf will bring new investment worth SR75 billion and create thousands of new jobs, says Petroleum and Mineral Resources Minister Ali Al-Naimi.
“About SR75 billion will be invested in the petrochemical sector within the next five years... But in the gas exploration and production sector the investment will be in the range of $2 billion (SR7.5 billion),” the Saudi Press Agency quoted him as saying.
Addressing a press conference in Riyadh after signing the gas deal on Saturday, the minister said some 27 companies from countries including North America, Europe, China, India, Japan and Russia were bidding for new gas projects in three regions covering a total area of 120,000 sq. km.
Al-Naimi said the recent bombing at a residential compound in Riyadh would not affect foreign investment. “The world is watching the measures taken by the Kingdom to contain such incidents. I do not see any hesitation or delay on the part of investors in exploiting opportunities in the Kingdom.”
The Kingdom’s gas industry currently offers 35,000 direct jobs and 150,000 indirect jobs. “The figure will grow steadily with increased investment in the gas sector,” he said.
The minister signed the deal with Total Chairman and CEO Thierry Desmarest and Sir Phillip Watts, chairman of the committee of managing directors of Royal Dutch Shell, for gas exploration and production in southern Rub Al-Khali or the Empty Quarter.
The 40-year concession covers an area of 210,000 sq. km. An official at the Ministry of Petroleum put the value of the deal at $4 billion in direct investment and $1.5 billion in indirect investment.
“The agreement we have signed is an indication of the Kingdom’s success in attracting foreign investment and creating a conducive atmosphere for investment,” Al-Naimi told reporters.
The Kingdom has invited bids “for other promising areas in the northern Rub Al-Khali.” The results of the bidding process will be announced on Jan. 26, 27 and 28, when the agreements with the winning firms will also be signed.
