Saudi Arabia is speeding the pace on its multibillion dollar gas opening to the world's top oil companies and broadening participation in its so-called core ventures, industry sources said yesterday. Saudi negotiators are seeking final proposals for the kingdom's three huge ventures by the end of February so as to award hotly-contested consortium leader posts by mid-March and sign memoranda of understanding by early April, sources said.

"The distinct impression during the last few weeks is that the Saudi negotiators are serious about pushing things along quickly," an industry source said. "They are sticking to their April 1 deadline for signing MOUs." Saudi Arabia, the world's biggest holder of oil reserves and fifth largest gas reserves, unveiled its energy sector opening to foreign firms more than two years ago.

As talks now enter the final stages, competition for project leadership has grown fierce as all negotiations will occur between the Saudi team and the consortium leader - even defining the internal structure - industry sources said. "The companies are fighting it out to lead and operate the core ventures," a regional analyst said. The kingdom itself appears intent on hating up competition for gas sector projects - worth an estimated $25 billion - by expanding the shortlist of companies grouped under core ventures two and three, industry sources said.

Executives from ExxonMobil and Royal/Dutch Shell are now in Dhahran poring over data - for core venture three in ExxonMobile's case and core ventures two and three in Royal/Dutch Shell's case, the sources added. "There are too many super majors lumped together in core venture 1 (South Ghawar area development) and the Saudis apparently wanted to spread things out a bit more," the analyst said. The top brass from ExxonMobil, BP Amoco, Royal Dutch/Shell, TotalFinaElf and Chevron flew to Riyadh last weekend to discuss the structure of the estimated $15 billion core venture 1 with a Saudi ministerial team. Italy's energy giant ENI has also been tapped for involvement in that project.

Executives from the remaining short listed potential investors - Phillips, Conoco, Enron/Oxy, Marathon and Eni are due to meet with the same Saudi team this week, industry sources said. Core Venture 2 (Red Sea area development) now groups Exxon/Mobil, TotalFinaElf, Royal Dutch/Shell and Marathon. Core Venture 3 (Shaybah Area Development) now groups ExxonMobil, Royal Dutch/Shell, TotalFinaElf, Phillips and Enron/Oxy.

The companies are being asked to help develop known gas reserves and also invest in downstream projects fed by gas supplies, such as power and desalination. The kingdom's more valuable oil sector, remains off limits to foreign companies since nationalization in the 1970s.
SOURCE: Gulf News

  
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