RIYADH, 30 July — Fresh Japanese attempts to restart negotiations for renewal of an oil-drilling concession in Saudi Arabia’s Alkhafji area to Japan’s Arabian Oil Company have failed, high-level government sources said yesterday. The sources, on condition of anonymity, told Arab News that a ministerial committee chaired by Foreign Minister Prince Saud Al-Faisal had rejected a Japanese proposal to revive talks on the issue. Saudi-Japanese negotiations to renew AOC’s concession in the Neutral Zone between the Kingdom and Kuwait failed in February last year when Tokyo rejected conditions set by the Kingdom. “The Japanese side tried again to convince Saudi officials to continue talks on the license issue. But the committee categorically refused,” the sources said. They said the committee, assigned to hold talks with oil majors intending to invest in the Kingdom’s upstream gas sector, had decided earlier not to intervene in the issue and told the Japanese side that it was under the jurisdiction of the Ministry of Petroleum and Mineral Resources. During the talks with AOC, Saudi Arabia had proposed Japanese investment in petrochemical projects in Alkhafji utilizing gas for feedstock, but Japan rejected the offer. To the disappointment of the Japanese negotiators, all major international oil companies competed with each other for a chunk in the Kingdom’s gas initiative. The Kingdom had also demanded that Japan increase purchase of Saudi oil to the level of 1.5 million barrels per day and invest in a $2.1 billion railway project.
