Shell signs $2 billion Saudi gas agreement
17 Nov 2003
Shell has announced the official signing at a ceremony in Riyadh of a $2 billion upstream project agreement under which a consortium, led by Shell, will explore for natural gas in Saudi Arabia and develop any commercial finds.
Sir Philip Watts, Chairman of the Committee of Managing Directors of the Royal Dutch/Shell Group of Companies, signed the agreement on behalf of Shell. His Excellency Ali Al-Naimi, Minister of Petroleum and Mineral Resources, signed on behalf of the Saudi Arabian government.
Shell holds 40 per cent of the consortium, and is partnered by Saudi Arabian Oil Company and Total Ventures Saudi Arabia which each hold 30 per cent.
The consortium's exploration activities will be the first upstream operations in which international energy companies have participated in Saudi Arabia since the nationalisation of the oil and gas exploration and production industry in the 1970s.
The Royal Dutch/Shell Group of Companies already has five joint ventures in Saudi Arabia in the downstream areas of refining, petrochemicals and marketing oil products, and with its partners has some $7.8 billion invested in the Kingdom. The incorporation of the consortium as a joint venture company is expected to be completed by the end of 2003.
Exploration is expected to commence in the first quarter of 2004. The consortium's gas acreage covers over 200,000 square kilometres of the South Rub Al Khali (Empty Quarter), an area five times the size of the Netherlands and almost as large as the UK.
Commercial discoveries of gas will be developed by the consortium for domestic use in power generation, water desalination and petrochemicals production.
