Saudi meets on fate of landmark gas deal

Saudi Arabia is set to decide the fate of the kingdom’s multi-billion dollar initiative to open its huge gas sector to foreign investors. The Supreme Petroleum Council (SPC), which controls energy policy in the world’s biggest oil exporter, is meeting in Taif and is expected to issue a statement on its decision. The kingdom last week called time on talks with Western oil multinationals, ordering the companies to submit final bids by the end of this month on the industrial mega-projects worth an initial USD 25 billion. Gulf sources have said the firms led by ExxonMobil and Royal Dutch/Shell News are seeking far bigger returns than Riyadh is prepared to accept for projects to build power generation, water desalination and chemical plants using gas as a feedstock. Saudi Arabia and eight leading oil majors signed preparatory agreements last June for the three schemes. But after a year of deliberations, the companies have still found themselves unable to regain entry into the upstream they have been barred from since nationalisation in the 1970s. Should the gas initiative be scrapped in its current form, the kingdom is expected to announce a new round of bidding for its gas riches.

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