Saudis Could Establish Special Investment Rules
Saudi Arabia could establish special foreign investment decrees covering three core natural gas projects under its multi-billion dollar gas opening, according to sources on January 10th.
The kingdom’s new investment framework, detailed last April, could pose problems for foreign investment in the gas initiative projects, particularly in terms of upstream and midstream aspects.
Rather than creating a separate investment framework covering the energy sector as a whole as had been suggested, the Saudis could likely issue special investment guidelines pertaining specifically to the three core gas projects, which could give foreign oil companies more leverage in dealing with Saudi negotiators.
The much-anticipated opening appears to be picking up momentum, with the kingdom informing short listed companies on January 8th that memorandums of understanding (MOUs) for the projects will be signed by April 1st.
The 10 short listed firms, including Royal Dutch/Shell, BP Amoco, Exxon Mobil Corp., Chevron Corp., TotalFinaElf, Eni, Marathon Oil Co., Conoco Inc., Phillips Petroleum Co. and a joint venture between Enron Corp. and Occidental Petroleum Corp., had received notification in early December from the Saudi ministerial negotiating team that they had been grouped under the three core gas projects.
All 10 firms submitted letters of intent prior to the December 30th deadline and will be granted access to data rooms in the second half of January. Companies have until February 10th to submit written responses before making presentations to Saudi negotiators in Riyadh.
The negotiators are expected to determine a method for choosing leaders for the core ventures during February, with a final decision and the formation of consortia under the chosen leaders due in March.
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