Statoil Seeks Closer Ties with Saudi Arabia

Norwegian Oil Minister Einar Steensnaes said Statoil was seeking a role in Saudi Arabia's natural gas sector. "Statoil has been in Riyadh for seven months (after opening an office)," said Steensnaes in a statement after meeting with Ali al-Naimi. Hopefully Statoil will sign a contract with Aramco to work on some projects in the gas fields. The Norwegian oil minister did not elaborate but his Saudi colleague was hopeful of Statoil's eventual involvement. "There will be, because of the high potential of gas in the kingdom, other phases where international companies will be invited," said Naimi. "I know now Statoil is very much interested and will most probably participate." Naimi said it was too early to say when an invitation would be extended to more foreign companies, adding that the first phase of the kingdom's multibillion-dollar gas initiative still had to be finalized.

Eight oil majors signed initial deals with Saudi Arabia last June for three gas projects requiring initial investment of $25 billion. ExxonMobil and Royal Dutch/Shell were awarded top slots in the scheme. The foundation for the massive, integrated projects will not begin until implementation agreements are signed. A new target date of March was set late last year after an initial deadline of December 16 passed by.

Saudi Arabia now produces 3.5 billion cubic feet (99.11 million cu meters) per day of gas and aims to expand production capacity to process seven billion cubic feet per day by the end of 2003.