‘The Ministry of Petroleum & Mineral Resources is working with private Saudi investors to create a holding company that will provide support industries and services to the petroleum and energy sector in Saudi Arabia and beyond,’ he told delegates at an energy conference in Washington. ‘This new holding company will provide the umbrella under which subsidiaries will be created to provide opportunities for international companies to invest in joint venture with Saudi companies.’

The company, which will cover ‘engineering, seismic surveying, drilling, manufacturing of some products, and others’ is likely to be a key player in co-ordinating services to the core ventures of the Saudi gas initiative. Naimi earlier denied suggestions that the gas initiative is facing political setbacks because of the security situation in the Middle East. Questions have been raised over the future of the initiative after the failure to meet the 2 March deadline for signing implementation agreements. However, Naimi insisted that ‘multinational oil companies will invest over $25 billion over the next five years in gas exploration and production as well as power generation, desalination and chemical facilities’.

New supplies of natural gas were essential for developing Saudi Arabia’s petrochemical industry, and ‘the Saudi government hopes to attract private capital for expansion of the petrochemical industry with low feedstock prices,’ Naimi said. Considerable investment would also be ploughed into infrastructure to transport gas from fields in the Eastern Province to the industrial city of Yanbu, he said.

The decision to set up a new company to co-ordinate support services for the sector was announced in one of two key speeches made by Naimi in the US in late April. Addressing Saudi Aramcostaff in Houston on 27 April, Naimi said that the government was also planning to privatise some of Aramco’s operations (see page 15).