The Saudi government signed on Sunday morning a deal on natural gas drilling and production with the China National Petrochemical Corp (SINOPEC), according to a SINOPEC official.
The deal was inked by Saudi Minister of Petroleum and Mineral Resources Ali Bin Ibrahim Al-N'aimi and chief of SINOPEC Wang Jiming.
The agreement, covering an area of 40 square kilometers in the south of Saudi Arabia's Rub Al Khali Province, was also signed by the chairman of the leading Saudi Arabia oil provider, Arabian American Oil Company (ARAMCO), Wang told reporters after the signing ceremony.
Wang said the project was a landmark in the Sino-Saudi ties in general and in the bilateral economic and trade cooperation in particular.
He hailed the deal as a strong link which further cements the full-fledged relations between China and Saudi Arabia, saying he is confidence in the success of the deal and the project would hopefully bear fruits for both sides when it goes into operation.
He disclosed the total spending in the first phase of the project was set to be US$300 million, adding that SINOPEC has already made contacts with several banks over the funding of the scheme and some Saudi banks showed willingness to step in.
He said on January 27, SINOPEC secured an international tender staged by the Saudi government for gas excavation and production at the contracted zone.
Under the deal, SINOPEC and ARAMCO will launch a company for drilling and production at the contracted zone with ARAMCO holding a 20 percent quota.
Meanwhile, Al-N'aimi is also expected to sign two similar deals here in the day with the Russian Lock Oil on one hand and the Italian Iny and the Spanish Ribsol on the other.
Lock Oil will drill and produce natural gas at the A zone which covers 30,000 square meters and the two European partners will work at the 52,000 square kilometers C zone, both at Rub Al Khali.
Last November, Saudi Arabia clinched deals for natural gas drilling and production with the international Shell and Total and the national ARAMCO groups. The three companies were offered concession terms up to 25 years and concession area of 210,000 square kilometers at Rub Al Khali too.
The projects were part of the Saudi government's reform and opening up policies in the economic field.
(Xinhua News Agency March 8, 2004)