Saudi Arabia renews offer for foreign investment in gas sector
Saudi Arabia has re-launched its efforts to attract foreign investment in its lucrative gas sector. The areas that will be offered for tender for gas exploration will be in three locations in Saudi Arabia, each totaling 30,000-50,000 square kilometers.
The kingdom has proven natural gas reserves of 224 trillion cubic feet (6.6 trillion cubic meters), the fourth largest in the world. Ali Al-Naimi, minister of petroleum and natural resources, outlined the offer during a two-day seminar in London on July 22-23.
More than 40 international oil companies from the United States, Britain, Canada, China, France, Germany, India, Italy, Japan, the Netherlands, Malaysia, and Russia attended the event.
Minister Al-Naimi said that the kingdom’s previous gas initiative did not reach an impasse as had been reported, but was impeded because of differences in approach to business. He said that Saudi Arabia has reached the conclusion that it is preferable to separate gas exploration projects from those of power generation, water desalination and petrochemicals.
He noted, "Exploration and production will be pursued separately... and I think this route is going to yield a better success." He also added that the rate of return for the new projects would be more than 13-15 percent.
The Kingdom requires development of its gas sector to expand and diversify its economic base and meet rising domestic energy needs. It is estimated that Saudi Arabia’s consumption of gas will reach 12 billion cubic feet per day by 2025, compared with a current average of 7 billion cubic feet per day. — (menareport.com)
© 2003 Mena Report (www.menareport.com)
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