The long-drawn-out negotiations with top oil multinationals for Saudi Arabia's mega-gas initiatives could be nearing an end. Final talks over Core Venture 1—the $15 billion South Ghawar Gas Project—and CV3, the $10 billion Shaybah Project, are expected to open before January-end, Saudi Foreign Minister Prince Saud Al-Faisal stated on Wednesday, January 22.
At the same time, the Saudi Ministerial Committee has suspended the five billion dollar Red Sea Project, known as Core Venture 2. Negotiations reached an impasse over the gas acreage on offer and profit margins.
Ahead of the four-year cabinet reshuffle scheduled for May, the energy multinationals have reportedly stepped up their campaign to unseat Saudi Arabian Oil Minister Ali Al-Naimi, perceived as the man standing between the giant foreign oil firms and a lucrative piece of the kingdom’s vast gas fields, according to the Financial Times. A new minister in office is hoped by the oil giants to prove more flexible in negotiating the terms of foreign investment in the gas initiative.
Sitting atop the world's fourth biggest gas reserves, the Saudi kingdom was to open its gas sector to foreign investment in 2002. Consortiums of eight foreign oil companies were invited in mid-2001 to submit their bids for three gas schemes involving $25 billion investments in gas production and petrochemical, power and water desalination plants.
CV 1 has been awarded to ExxonMobil as the project’s operator with 35 percent interest, together with partners Royal Dutch/Shell and BP Amoco—each holding a 25 percent interest—and Phillips Petroleum with the remaining 15 percent interest.
The shelved CV2 was to be operated by a consortium of ExxonMobil-Occidental-Marathon, respectively holding 60-20-20 percent interests in the venture. CV 3 was awarded to a Shell-TotalFinaElf-Conoco venture, with 40 percent shareholder Shell as project operator, and the remaining 60 percent equally divided between partners Conoco and TotalFinaElf. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
