Negotiations over the $25 billion Saudi gas deal open to foreign investors could extend past the October 1 deadline as international oil majors have requested more time to review the Kingdom’s final offer. The Saudi government has offered the seven multinationals, led by ExxonMobil an extra month to examine the contract and its recent modifications, reported Asharq al-Awsat .
Seeking to revitalize foreign investment in Saudi gas, the government has offered international firms access to vast new fields of uncertain gas resources, while retracting its initial proposal, which put on the table the Kingdom’s best fields holding huge proven reserves. Bidders were given a deadline of early October to present their counteroffers to the scaled down scheme, which carries more risk and less commercial-viability than its predecessor.
The Saudis’ latest offer seeks bidders for drilling in three potential gas fields, all distanced from Saudi Arabia’s the enormous proven reservoirs. The first section is located south of the Ghawar oilfield, another by the Red Sea and a third, called Shaybah, in the south of the country, according to the NY Times.
Another sticking point is the return the Saudis have been willing to offer foreign investors on their multibillion-dollar investment, reported the newspaper. While the Western companies seek 15-19 percent, the Saudis have so far consented to no more than12 percent.
Further outstanding issues include local opposition to the signing over of national resources to foreign business interests. Opposition stems from the desire to protect particular and national interests as well as rising anti-Western sentiment. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
