Deputy Prime Minister and Commander of the National Guard Crown Prince Abdullah bin Abdulaziz received in Riyadh today President of the Russian oil company ‘Lukoil’, Wahid Akbarov, and President of the Chinese company ‘Sinopec’, Wang Jiming, following the signed of formal 40-year contracts for exploration for unassociated natural gas in the northern part of the Empty Quarter [Rub Al-Khali ], involving Saudi Aramco and a number of companies from Italy and Spain as well as Russia and China.
At a press conference, Minister of Petroleum and Mineral Resources Ali Al-Naimi commented that the international oil companies have undertaken to dig 20 wells in the designated areas, and to conduct seismic surveys. The investment required in the first phase of exploration in the three areas is estimated at over SR 3 billion [U.S. $ 0.8 billion]. The aim, he said, is to increase gas reserves to meet development requirements and diversify sources of income by providing gas and its products to various industries, as well as opening up job opportunities for citizens and encouraging Saudi contractors and exporters. Domestically-produced gas will feed the major gas network, with demand expected to rise from the current capacity of 7 billion cubic feet to nearly 14 billion cubic feet per day by 2025. Minister Al-Naimi indicated that there are 17 petrochemicals projects waiting for natural gas; and estimated that there will be about 35,000 direct jobs in addition to three or four times that number from indirect employment through investment, which will be open for Saudi businessmen to provide support services.
Lukoil has expressed confidence in discovering large natural gas deposits in the northern Rub Al-Khali , citing a probability rate exceeding 80 percent. The joint venture, Luksar, is 80 percent owned by Lukoil and the rest by Saudi Aramco, and will borrow U.S. $ 215 million from Saudi Hollandi Bank to fund a five-year exploration program. Luksar will form by the end of the month an 11-member board of directors, comprising eight Lukoil officials, two Saudi Aramco officials and a Saudi government representative.