Saudis give western consortiums Nov. 1 response deadline
Saudi Arabia has given international oil companies vying to develop natural gas fields in the kingdom until Nov.1 to respond to the Saudi's final offers on its proposed $25 billion projects.
By OGJ editors
HOUSTON, Oct. 1 -- Saudi Arabia has given international oil companies vying to develop natural gas fields in the kingdom until Nov.1 to respond to the Saudi's final offers on its proposed $25 billion projects, the Organization of Petroleum Exporting Countries' news agency OPECNA reported Monday.
Earlier, Saudi officials had indicated they wanted negotiations with the current players to end by October. Aramco also had earlier suggested it might reopen bidding to others later this fall if negotiations with current players fail (OGJ, Sept. 16, 2002, p. 26).
The Saudi negotiating team, OPECNA reported, has presented final offers to Royal Dutch/Shell Group and ExxonMobil Corp., which lead three consortiums consisting of eight international companies selected to implement the three projects. Negotiations, which have been proceeding for more than a year, recently took a downturn, with many industry analysts assuming the Saudis were nearing abandonment of the talks, at least with these consortiums.
"If (the western companies) reject the offers, it means the negotiations have collapsed and all agreements and preliminary commitments will be deemed null and void," a high-level source was quoted as stating Monday in Arab News.
The final offers include additional areas for gas exploration, countering reports that the exploration and production firms had been allocated areas that did not contain much gas, according to the same source, OPECNA said.
The source also said the Saudi authorities had increased the rate of return from the downstream facilities "to 15.5%, which was the highest rate compared with others offered for similar projects in the US, Europe, and other countries."