BP takes share in Saudi Project

BP has signed an agreement to take a major interest in Saudi Arabia's largest gas development and hydrocarbons project for 25 years

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By  Charlotte McDonald Published  June 5, 2001

BP will share stakes with Shell, ExxonMobil and Phillips in an integrated project, Core Venture 1, to find and develop gas reserves in an area of more than 100,000 square kilometres in the east of KSA. The exploration acreage covers an area slightly larger than the UAE.

“For BP, this is a new, exciting venture,” said Sir John Browne, BP CE, who signed an agreement for BP. “We have never had a significant presence in the Kingdom before so we consider we have secured a tremendous prize and look forward to working with all concerned to make this a very successful project,” he added.

Gas, when found, will be transported and processed into feedstock for two giant petrochemical projects, one in Jubail and the other in Yanbu. The dry gas will be used for two giant 2000-megawatt power stations and associated desalination complexes. In total the capital expenditure could reach $15 billion.

Although the structure of the project and the respective interests of the participants remain to be negotiated over the coming months, BP expects to invest up to a quarter of the $15 billion cost of the project. ExxonMobil will lead the consortium.

“We are delighted to be involved in one of the largest integrated gas development projects in the world,” said Browne. “Assuming a 25 per cent interest, BP’s expenditure alone on these projects could amount to over 14 billion Saudi Riyals and this may only be a start if we are successful in finding gas in substantial quantities,” he added.

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