Saudi Arabia Rejects ExxonMobil Gas Deal

Saudi Arabia has terminated the ExxonMobil-led deal for developing the South Ghawar gas reserves. The $15 billion investment project will be null and void effective June 15th. The kingdom's oil minister Ali al-Naimi said if the world's top oil majors did not accept their commercial terms by June 4th the deal would be cancelled. Other partners were Shell, BP and ConocoPhillips.

The companies have wanted access to more gas than the Saudis were offering, and the two sides also disagreed over the rate of return for investments in petrochemical, power and desalination plants.

The third core venture, led by Shell for the $5 billion Shaybah development, could also be terminated. Core venture two, the $5 billion Red Sea development, led by Exxon and including Marathon and Occidental has already been cancelled.