Shell officially signs Saudi gas agreement at Riyadh ceremony
Posted: 16 November 2003
Shell Exploration Company B.V. (“Shell”) today announced
the official signing at a ceremony in Riyadh of an upstream project
agreement under which a consortium, led by Shell, will explore for
natural gas in Saudi Arabia and develop any commercial finds.
Sir Philip Watts, Chairman of the Committee of Managing Directors
of the Royal Dutch/Shell Group of Companies signed the agreement
on behalf of Shell. His Excellency Ali Al-Naimi, Minister of Petroleum
and Mineral Resources, signed on behalf of the Saudi Arabian government.
Shell holds 40 per cent of the consortium, and is partnered by
Saudi Arabian Oil Company and Total Ventures Saudi Arabia which
each hold 30 per cent. The consortium’s exploration activities
will be the first upstream operations in which international energy
companies participate in Saudi Arabia since the nationalisation
of the oil and gas exploration and production industry in the 1970s.
The Royal Dutch/Shell Group of Companies already has five joint
ventures in Saudi Arabia in the downstream areas of refining, petrochemicals
and marketing oil products, and with its partners has some $7.8
billion invested in the Kingdom.
Today’s signing ceremony follows the approval of the agreement
by Saudi Arabia’s Supreme Petroleum Council, the council of
Ministers and the Shoura council. The incorporation of the consortium
as a joint venture company is now expected to be completed by the
end of 2003.
Exploration is expected to commence in the first quarter of 2004.
The consortium’s gas acreage covers over 200,000 square kilometres
of the South Rub Al Khali (Empty Quarter), an area five times the
size of the Netherlands and almost as large as Great Britain.
Commercial discoveries of gas will be developed by the consortium
for domestic use in power generation, water desalination and petrochemicals
production.
Sir Philip said today: “Gas is playing an increasingly important
role in meeting the world’s growing demand for energy and
is likely to overtake oil as the preferred fuel sometime after 2020.
The Royal Dutch/Shell Group of Companies is the world’s largest
private producer of natural gas, and I am delighted that we will
now be able to apply our expertise and experience to help Saudi
Arabia build a long-term gas business. The agreement we have formally
signed today will see us begin exploration and production operations
in the country with the world’s largest reserves of hydrocarbons.
It is of historic importance for the Royal Dutch/Shell Group of
Companies.”
Walter van de Vijver, a Group Managing Director of the Royal Dutch/Shell
Group of Companies and Chief Executive Officer of Shell Exploration
and Production, said: “The development of its gas reserves
is an enormous undertaking for Saudi Arabia. I am glad that the
Royal Dutch/Shell Group of Companies has been invited to play an
important part in this work. I am also particularly pleased that
we are expanding our partnership with Saudi Aramco, the world’s
largest producer of hydrocarbons, into the upstream.”
Mr Brian Wilson, the UK Prime Minister’s Special Representative
on Trade Opportunities for British Business, attended the signing
ceremony. He said: "I am extremely pleased to witness this
historic agreement between Shell and Saudi Arabia. Shell has done
a remarkable job assisting with the development of the UK gas sector,
and I am certain it will do the same in Saudi Arabia.”
For more information see www.shell.com.
Posted by Richard Price,
Editor Pipeline Magazine
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