Saudi Arabia's Supreme Petroleum Council (SPC) is expected to meet tomorrow and announce the oil majors chosen for its multi-billion dollar gas investment opening, industry sources familiar with the negotiations said today.
The sources said the SPC is expected to name ExxonMobil and Royal Dutch/Shell as lead players in three so-called core projects involving the kingdom's upstream gas sector - off-limits to foreign oil firms since nationalisation in 1975.
Signing of memoranda of understanding (MOUs) would most probably take place in early June, the sources said.
The anticipated announcement would mark the biggest advance in the kingdom's gas initiative, valued at an initial $25 billion, since Riyadh unveiled its energy investment opening over two years ago.
But the hard work has yet to start on the opening of Saudi Arabia's gas sector, the world's fourth biggest.The fiscal regime and regulatory details have not been developed, said one source.
Riyadh is expected to trim back its original shortlist of 11 potential foreign investors revealed last summer. Those companies had been grouped under three core venture consortia - South Ghawar, Red Sea and Shaybah.
For ExxonMobil and Royal Dutch/Shell, securing the lead role in Saudi Arabia's core ventures would entitle them to operate the package and get the biggest slice of the projects, analysts said.
Other industry sources said ExxonMobil, the world's biggest energy company, was tipped for the top slot in core venture 1 (South Ghawar) as well as in core venture 2 (Red Sea).
Royal Dutch/Shell was in pole position for core venture 3 (Shaybah), the sources added. Both oil super-majors already have significant foreign investment in the kingdom and feature as top customers of Saudi oil, the analysts said.
An urgent need to create jobs and grow the economy are driving Saudi Arabia's landmark energy opening.
Analysts said big oil companies were prepared to help the kingdom achieve those aims even if the return on their investment was relatively low.