By the OGJ Online Staff
WASHINGTON, DC, Jan. 21 --Saudi officials, in a meeting with top ExxonMobil Corp. officials over the weekend, gave no indication whether they will postpone foreign gas investment.
Saudi Foreign Minister Saud al-Faisal called the talks "fruitful" in an official statement from the Saudi Press Agency. The minister was present at the talks along with ExxonMobil Pres. Lee Raymond and other top ExxonMobil officials; Saudi Oil Minister Ali al-Naimi also was part of the Saudi negotiating team.
The discussions come about a week after US companies indicated up to $30 billion in gas deals scheduled to be finalized this March with Saudi Arabia may be delayed because of diplomatic tensions between the White House and the kingdom (OGJ Online, Jan. 14, 2001).
ExxonMobil has not released any official statement on whether it expects the timetable for the gas deals to slide past this spring. The company is leading two of three "core ventures" made available to foreign energy companies.
The first project, which the Saudis call the most attractive investment opportunity, will be led by ExxonMobil and includes drilling in eastern Saudi Arabia at South Ghawar. Gas from those fields will be used to fuel two planned petrochemical plants, two power stations, and four desalination plants. Initial investment is estimated at $12-$16 billion.
ExxonMobil was also tapped to lead a Red Sea project estimated to require at least a $5 billion investment. The third project at the Shaybah field in the southeast "Empty Quarter" near the United Arab Emirates border will be led by the Royal Dutch/Shell Group and will also require an investment of $5-10 billion, the Saudis say.
A sticking point between the Saudis and foreign investors is how much gas the Saudis, through its state-controlled oil and gas company, Saudi Aramco Co., want to earmark for the various infrastructure projects on the table. Foreign investors also want more specific details over production costs.
Industry sources said neither of those issues should stop the projects from moving forward.
Instead, a much larger concern is whether the Saudis still have the political will to allow foreign investors in given recent tensions between the US and Arab nations. Nevertheless, Saudi officials sought to address those fears in their press statement, saying they "reiterated the openness of the kingdom to foreign investment."