Saudi Arabia will likely strike a multi-billion dollar deal with a group of global oil giants to tap its massive gas resources despite a series of setbacks in their negotiations over the past months, according to a western oil executive involved in the talks.
Although the negotiations have stalled for more than three months, the world’s oil superpower and International Oil Companies (IOC’s) are expected to reach agreement on the Gas Initiative that could involve investment of at least USD 25 billion, said Jeroen Van der Veer, president of the Royal Dutch Petroleum Co and vice-chairman of the Royal Dutch/Shell Group, which oversees Shell’s activities in the Middle East.
Van der Veer acknowledged the negotiations have dragged on because of disagreements on several issues but this was normal in such giant contracts.
Shell is heading one of three consortia involved in the negotiations with Riyadh over the Gas Initiative which was first proposed by Saudi’s crown prince during a visit to the USA more than five years ago. The aim of the visit was to attract foreign capital to the cash-pinched Gulf kingdom and tap its enormous natural gas reserves, estimated at nearly six trillion cubic metres.
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