By OGJ editors
HOUSTON, July 16 -- The Royal Dutch/Shell Group and Total SA signed an agreement with Saudi Arabia to form a joint venture with Saudi Aramco for the exploration of gas in an area of 200,000 sq km.
Jeroen van der Veer, Royal Dutch president and vice-chairman of the Royal Dutch/Shell Group, said, "This agreement is an important breakthrough as it heralds the first time after the creation of Saudi Aramco that foreign international oil companies have gained access to gas acreage in the Kingdom of Saudi Arabia, holder of the world's largest reserves of oil and gas."
The area involved is in the Empty Quarter desert or Rub Al-Khali. Shell, as consortium leader, has 40% interest while Saudi Aramco and Total each have 30% interest.
No dollar volume was listed for the venture.
The announcement comes about a month after negotiations ended between state-owned Saudi Arabian Oil Co. and multinational oil companies concerning a key part of the "Saudi Gas Initiative" (OGJ Online, June 10, 2003).
Almost 4 years ago, Saudi Arabia initiated talks with foreign companies, most US-based, on pursing three "core" ventures designed to leverage the country's plentiful natural gas production into Saudi petrochemical, power, and water projects.
The US Department of Energy listed the following project descriptions based upon original information about the three ventures:
--Core Venture 1, in South Ghawar, would have been one of the world's largest ($15 billion) integrated natural gas projects, including exploration, pipelines, two gas-fired power plants, two petrochemical plants, two desalination units, and more.
--Core Venture 2 was to involve exploration in the Red Sea, development of the Barqan and Midyan fields on the Red Sea coast in northwestern Saudi Arabia, as well as construction of a petrochemical plant, a power station, desalination capacity, etc., at a cost of $4 billion.
--Core Venture 3 would have involved exploration near Shaybah in the Rub al-Khali ("Empty Quarter") of southeastern Saudi Arabia, development of the Kidan gas field, laying of pipelines from Shaybah to the Haradh and Hawiyah natural gas treatment plants east of Riyadh, and construction of a petrochemical plant in Jubail, at a cost of $4 billion.
