Oil-rich Saudi Arabia announced Tuesday, November 6 that a new holding company would be set up jointly with local and foreign investors with the aim of creating a domestic energy services industry.
The purpose of the new firm is to "create a Saudi service industry to supply competitive industrial products," said Prince Faisal Bin Turki, adviser at the Ministry of Petroleum and Mineral Resources.
The firm, a joint-stock company, will be mainly owned by the private sector, both Saudi and foreign, and the government contribution will be "in kind, in the form of two already existing energy services companies."
Many studies were commissioned by the oil ministry in cooperation with international firms and all had shown that such industry is highly feasible in the kingdom, Prince Faisal told an energy conference in Riyadh.
The three-day conference on "The Developing Role of Support Services for the Petroleum and Energy Industries in Saudi Arabia" is being held to mark King Fahd's 20 years on the throne. The firm will have an initial capitalization of between 600 and 800 million riyals ($160 to 213 million) and in the future will be opened to public subscription.
The feasibility studies "focused primarily on prospects for setting up new factories in the kingdom to manufacture products and provide services to these (energy) industries," the Saudi official said. These products include fabricated steel products used by upstream, downstream, petrochemicals, mining, fertilizers and utilities industries. They also include tubular goods like casings, drill pipes, and structural steel products.
"Our research concluded that the anticipated returns on the investments are very attractive for several products," said Prince Faisal. Feasibility studies included projecting demand across the Middle East region.
Prince Faisal said the demand sectors studies were extended to include gas-oil separation plants, gas plants, oil refineries, petrochemical facilities and power generation and seawater desalination plants.
"Technically speaking, the platform for a strong domestic energy service industry is in place now. What remains is the resolve to encourage both private and public investors to take part," he said. — (AFP, Riyadh)
© Agence France Presse 2001
© 2001 Mena Report (www.menareport.com)
