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$20bn Saudi gas deals
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June 3, 2001: 8:41 a.m. ET
ExxonMobil and Royal Dutch/Shell to take lead roles
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LONDON (CNN) - U.S. energy giant ExxonMobil and rival Royal Dutch /Shell have won the lead roles in $20 billion gas development projects in Saudi Arabia.
ExxonMobil has the leading role in the main $15 billion South Ghawar gas deal, developing a field said to be the size of Ireland. Royal Dutch/Shell will take the lead in the $5 billion Shaybah gas development.
The official Saudi Press Agency quoted foreign minister Prince Saud al-Faisal on Saturday as saying that a ministerial committee had recommended the two companies should be assigned the main roles in the project.
A Saudi souce told Reuters that a recommendation to the Supreme Petroleum Council meant the deal was virtually assured. Preparatory agreements were due to be signed today in Jeddah.
Exxon had already landed the lead position in the third gas package on offer by Riyadh, the $5 billion development of the Red Sea coast.
Exxon and Shell have significant foreign investments in the kingdom and feature as top customers for Saudi oil, analysts said.
The kingdom announced on May 18 that eight major oil companies would get stakes in the three gas projects, worth a combined $25 billion in initial investment.
ExxonMobil, as leader of the South Ghawar development is to get a 35 percent stake, while Shell and BP are to get 25 percent each and Phillips 15 percent, industry sources said. In Shaybah, Shell will be granted a 40 percent share, with Conoco and TotalFinaElf getting 30 percent each.
The deals mark the reopening of Saudi Arabia's upstream petroleum industry 25 years after nationalisation. The kingdom holds the world's fourth biggest gas reserves. 
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ExxonMobil
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