It's official: and the secondary offer doesn't have good enough profit motives (Karen)
Saudis call halt to investment plan @ http://www.msnbc.com/news/805420.asp Kingdom won't open natural-gas fields to western oil firms By Bhushan Bahree and Thaddeus Herrick THE WALL STREET JOURNAL "This is a sharp change since the gas initiative was broached four years ago by the kingdom's effective ruler, Crown Prince Abdullah. It was a way to bring the Saudis badly needed jobs and also to give the U.S. and allies a greater economic stake in the kingdom in the event of increased hostilities. On the oil front, the Saudi move is a troubling one for an industry in need of new exploration sites. Big U.S. and European companies were willing to build and operate the costly water and other plants in return for entree to the world's premier petroleum provinces. These included the Eastern province, home of the giant Ghawar field. Relatively high and stable oil prices in recent years have given big oil companies plenty of free cash for investment. Exxon Mobil has some $6 billion on hand, and Shell about $4 billion. But some of the richest oil lands, such as Iraq, Libya and Iran, remain off-limits to U.S. companies because of economic sanctions. (Shell, while not an American company, has large assets in the U.S. and is cautious about antagonizing Washington.)" ...Established U.S. and North Sea oil areas are in decline, and new exploration zones in Russia and Africa have proved politically challenging. Oil companies have been using cash to buy back shares rather than invest in subpar projects. Besides Exxon Mobil and Shell, the negotiations with the Saudis have involved BP PLC, France's TotalFinaElf SA, Marathon Oil Corp., Occidental Petroleum Corp. and the two companies newly merged into ConocoPhillips. The largest of the plan's three segments was a $15 billion project led by Exxon Mobil, with Shell, BP and ConocoPhillips as partners. It involved building a gas processing plant, doing some gas production to feed a petrochemical operation and building a string of water and power plants.
