Riyadh cancels the 15 billion Gas project with Axon- Mobile

Saudi Arabia yesterday cancelled an investment gas project in the area of developing gas reserves led by Axon- Mobile, with investments estimated at 15 billion dollars.

Oil industry sources said the Saudi minister of oil Ali al-Nueimi carried out his threat to develop the country's reserves of gas without the participation of major world oil companies, if commercial conditions set by Riyadh will not be accepted by the fall of June 4th.

News reports quoted a Saudi official as saying that the "deal which Axon will be the first partner for the Southern al-Ghwar project was canceled and the decision will be valid as from June 15." However, this deal is doomed to failure because of the expiry since a long time of preliminary agreements and also in light of the differences between the two sides concerning investments which were due to include erection of factories for petrochemicals, electricity generation units and water desalinization.

However, it is not known if the Kingdom is ready to reopen the door of competition for developing its reserves of natural gas, as Saudi Arabia owns the fourth largest gas reserves in the world.

Worthy mentioning that the deal project was the subject of intensive talks and contacts in recent months. The whole file was then in the hands of the Saudi foreign minister prince Saud al- Faisal, but its details were not completed and a decision or an agreement was not taken then.

But when Ali al-Nueimi was appointed as a minister of oil and mineral resources for the third time more than one month earlier, the file was given back to him to decide and the decision came yesterday ( Thursday).

Moreover, Saudi Arabia abrogated the third project which is the Red Sea project whose investments were estimated at 5 billion dollars and it was expected to be led by Axon company with Marathon and Occidental companies.