JEDDAH, 7 March 2004 — Saudi Arabia will sign landmark gas exploration contracts with Russian, Chinese, Italian and Spanish oil giants today to produce natural gas from the Rub Al-Khali or Empty Quarter. “The signing will signal the beginning of the search for gas reservoirs in the north Rub Al-Khali Basin,” said an invitation sent to Lukoil of Russia, Sinopec of China, Italian ENI and Spanish Repsol for the signing ceremony.
The international oil companies will partner with Saudi Aramco in the upstream gas ventures, the Ministry of Petroleum and Minerals said. The projects are expected to fetch total investments worth SR75 billion in five years. The firms will be engaged in gas exploration and production in three regions.
The area of 120,000 sq. km has been divided into three sections designated A, B and C. Lukoil will take over A with 30,000 sq. km, while Sinopec was awarded B with 40,000 sq. km. A consortium of ENI and Repsol won the area designated C with nearly 52,000 sq. km.
Ameen Muhammad Al-Shibani, adviser for planning at Saudi Aramco, has estimated the total investment in the three projects at about 15 percent of the Kingdom’s gross national product. They will create 150,000 indirect jobs and 35,000 direct jobs, he said. Yahya Shinawi, director general of the oil ministry’s office in the Eastern Province, said the companies would start gas exploration and production soon after signing the accords.
In November, Saudi Arabia signed a multibillion-dollar deal with a consortium led by Royal Dutch Shell and Total for gas exploration and production in the south of the Kingdom.
Lukoil subsidiary Lukoil Overseas Ltd. said the two companies signed a shareholders agreement to regulate the Lukoil Saudi Arabia Energy Ltd. joint venture, also known as Luksar. Lukoil owns 80 percent of the joint venture, while Saudi Aramco holds 20 percent. Lukoil is Russia’s second-largest crude oil producer and has the largest presence in the Middle East among Russian oil majors.
