DUBAI, Jul 23, 2007 (Dow Jones Commodities News)
Sander Geophysics Arabia, a petroleum explorer, will survey Saudi Arabia's Red Sea coast for oil and gas deposits after winning a contract that may help the world's largest holder of hydrocarbons tap new stocks.
Saudi Arabian Oil Co. (SOI.YY), which pumps about 10% of the world's crude oil, hired Sander to conduct an airborne survey of the country's 1,800-kilometer-long west coast, people familiar with the deal said Monday.
Crude oil in New York is trading near 11-month highs partly on concerns about future supply as the world's largest producers fail to develop new resources to meet rising growth in demand.
Saudi, the Middle East's largest economy and the Persian Gulf's most populous Arab country, is also desperate to find new stocks of natural gas to feed power stations and homes.
The kingdom in 2003 and 2004 awarded a total of four concessions to joint ventures comprising Aramco and international partners including Royal Dutch Shell PLC (RDSA), Total SA (TOT), ENI SPA (E) and Lukoil Holdings (LKOH.RS) to search for gas in the Empty Quarter desert, known as Rub al-Khali.
Saudi Arabia's new exploration venture may pave the way for a second auction for international oil giants like Exxon Mobil Corp. (XOM) and Shell to win work in the country's hydrocarbons sector.
Saudi-Canadian Sander will carry out gravity and magnetic surveys over a period of up to 18 months starting in early September, the people said.
Five survey planes will scour an area of the Saudi coastline to acquire the data, which could lead to the drilling of exploration holes as early as 2010, the people said.
Saudi Aramco didn't comment on Sander's contract award when contacted by Dow Jones Newswires. An Aramco spokesman said in an emailed statement that regions unexplored in Saudi Arabia "hold great prospects for additional resources."
Sander Geophysics Arabia is a 75:25 joint venture between Ottawa-based Sander Geophysics Ltd. and Saudi Arabia's Rafid Group.
Copyright (c) 2007 Dow Jones & Company, Inc.
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