CAPITAL: RIYADH
MONETARY UNIT: RIYAL
REFINING CAPACITY: 1,745,000 B/D
OIL PRODUCTION: 8.064 MILLION B/D
OIL RESERVES: 259 BILLION BBL
GAS RESERVES: 213 TCF

In July 2000 Saudi Arabia presented investment proposals to 10 foreign oil companies wanting to invest in its gas sector.

Officials of Saudi Arabian Oil Co. (Saudi Aramco) presented representatives of the oil companies with proposals for "massive investments" covering exploration, production, and treatment of gas to make it available for new power stations, water desalination plants, and petrochemical projects.

The kingdom's goal was to attract major foreign investments in all stages of the gas sector in order to ensure adequate supplies for the expanding industries.

It wanted to attract $100 billion in energy investments over 20 years, despite competition from other Middle East nations seeking project financing.

The projects did not include oil exploration and production concessions.

The three main project areas were the Kidan/Shaybah gas development, the Rabigh Industrial City and Midyan area field development, and the Haradh gas development.

The Kidan/Shaybah development included gas exploration in an area of the Rub al Khali (Empty Quarter), development of the Kidan gas fields and Shaybah excess gas, and construction of a pipeline from Kidan and Shaybah to the Hawiyah plant.

The Rabigh and Midyan development called for exploration in northern Red Sea areas, development of the Midyan and Barqan gas fields, construction of a line from Midyan to Tabuk, development of the Umm Luj and Al Wajh onshore gas fields north of Yanbu, a pipeline from Umm Luj and al-Wajh to Yanbu, and development of an integrated refining and petrochemical complex at Rabigh Industrial City.

The Haradh development proposed gas exploration in an area of the Rub al Khali and a pipeline for 1.6 bcfd to the Haradh gas treatment plant. Condensate and gas liquids from Haradh would be treated at Saudi Aramco facilities, and ethane and NGL would be used as feedstock for a petrochemical plant at Jubail.

And other gas exploration and field development projects were to be offered across the nation, except where they would interfere with Saudi Aramco's operations.

In preparation for the foreign investments, Saudi Arabia passed an investment law that allowed foreign firms to hold full ownership of projects.

It also cut profits on foreign-owned projects to 30% from 45% with a possible rebate of 15%.

Foreign firms had been limited to 49% in ventures and barred from owning property.

The government said it was considering other steps to reform the tax system and give investors additional incentives.

It also approved an amendment that allowed Saudi Industrial Fund lending for industrial projects owned by foreign firms.

Petrochemicals

Saudi Arabia had raised its share of global petrochemical markets by 10% or 15 million tonnes/year, government officials said in 2000.

Saudi Basic Industries Corp. (SABIC) said its petrochemical production was 35 million tonnes/year at the end of 2000, up from 20 million tonnes in 1999.

The Middle East's largest petrochemical producer, Saudi Arabia established a petrochemical firm with capital of $133 million.

The Saudi Arabian Ministry of Commerce approved establishment of the Saudi International Petrochemical Co. (SIPC) to manage, operate, and own petrochemical and chemical projects and market their products. A diverse group of investors from Saudi Arabia provided 65% of the capital, and investors from other Gulf Cooperation Council member countries supplied the remaining 35%.

SIPC let contract to Fluor Daniel, Aliso Viejo, Calif., for overall project management of its first petrochemical complex, to be built at Al Jubail.

The $800 million SIPC complex would produce methanol, butanediol, acetic acid, and vinyl acetate monomer, which could be used to produce a variety of industrial, commercial, and consumer products.

Fluor would also provide basic engineering and front-end engineering design for the complex. Work was due completion in late 2003.