Apr. 02. - Privatisation of Saudi Aramco excites interest of BP and Shell

Source Press Release
Company Saudi Aramco 
Tags Upstream Activities
Date April 29, 2002

Saudi Aramco, the biggest oil group in the world, could be broken up and part-privatised in a move which has excited the interest of western oil companies BP and Shell.

Saudi Aramco is a state-owned group which controls the country's production of 10 mm bpd of crude, 12 % of the world's total, while holding a quarter of all known reserves left in the ground.

The disclosures came in a speech to Saudi Aramco employees and Saudi crown prince Abdullah. The remarks about  Saudi Aramco were seen as highly significant given that western oil firms such as  ExxonMobil, BP and Shell have recently been awarded contracts to work on gas projects in the world's biggest oil nation. Foreign firms have traditionally been kept out of the oil and gas sector.

While British oil groups will follow developments closely, they will be aware that delays and policy U-turns cannot be ruled out. The gas deals are behind schedule and have not been officially signed off yet amid wrangling over price and other critical issues. 
 The 30 % part-privatisation of another industrial firm, SABIC, went ahead as expected but the anticipated sale of the remaining 70 % never happened. Although BP and Shell will announce a massive downturn in first-quarter profits, they have enormous cash reserves and second-quarter figures will benefit from another major rise in crude prices.

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