Saudi gas project in the balance

Saudi Arabia is unhappy with the latest responses from oil majors on three core ventures in its multi-billion-dollar gas initiative but has left the door open for further consultations. Exxonmobil, as the lead company for core venture 1 (CV1) and core venture 2 (CV2), submitted a draft response early last week after Shell submitted its response the week before, but both are said to have fallen short of the requirements stipulated by the Saudi Ministerial Committee in it final offer of June.
As a result, the ministerial committee has indicated willingness for further consultations in late November and mid-December. The oil majors will be “required to submit their final responses by year-end,” it adds. Shell is said to have had submitted a mainly positive response to the Saudis’ final offer relating to the gas initiative CV3, opening the way for the project to go ahead once final modifications are agreed. CV3 embraces exploration of 90,000 square km in the empty quarter desert, a development study of the Kidan gas field, treatment and transport facilities from the Shaybah field, a petrochemical plant, a power and desalination facility on the Gulf coast and a pipeline from Kidan and Shaybah. Saudi Oil Minister Ali al-Naimi said at the end of October that foreign oil companies were expected to respond soon to a final offer.
Riyadh signed in June last year preliminary agreements with eight international oil companies for the projects worth some USD 25 billion in investments. But talks with the companies to strike permanent implementation agreements stalled, with two deadlines passing without a deal.

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