2003 News Story

Upstream gas agreement signed with international oil companies

Minister of Petroleum and Mineral Resources Ali Al-Naimi has announced that all necessary documents have been signed and exchanged in the agreement on the southern Rub' Al-Khali upstream project for non-associated gas, between Saudi Aramco and the Shell-Total consortium. The required statutory procedures for ratification of this agreement are being finalized by the Saudi government, after which a new company owned by the three signatory companies - 40 percent Shell and 30 percent each for Saudi Aramco and Total - will be formed to undertake exploration, development and production operations in the target area, which totals about 209,160 square kilometers.

Minister Al-Naimi went on to say that the agreements "provide for an upstream work program that covers seismic surveys, well drilling and prospecting for non-associated gas, in subject areas. They also entail programs for employing Saudi nationals and encouraging local manufacturers, contractors and service providers." He further stated that, with a view to achieving the gas sector's sustained growth, the State has provided a suitable environment for investors in the gas sector and in related industries. This, he said, reflects "a clear vision of the future of the industry - one that will facilitate participation by investors in its various fields through issuance of enabling and enlightening financial and organizational codes".