Rare meeting between top oil execs and top Saudi prince

Sep 24, 1998 02:00 AM

Top US oil company executives came to Washington for a rare meeting with Saudi Arabia's heir in what was billed as a "get to know you" session.
The rarity of such a gathering of senior oil executives with the top Saudi leadership has fuelled speculation that the kingdom may be ready to discuss some liberalisation of its state-controlled industry, though those involved in the meeting played down the prospects that the meeting will focus much on specifics.
"We haven't heard any hints in that direction and it is unlikely there will be any lobbying agenda on oil concessions or heavy lifting at such a social occasion," said a Washington-based oil company executive. "But you never have a meeting like that at which business isn't discussed in some shape or form."
The meeting with the prince comes at the tail end of a visit to Washington, which includes meetings with President Clinton, Secretary of State Madeleine Albright and other US administration officials and legislators. The Washingtonleg follows similar visits to London and Paris and the Crown Prince is then scheduled to travel to Asian capitals.
Among those confirmed to the meeting are Mobil Corp.'s Chairman and CEO Lucio Noto; Chevron Corp.'s Chairman and CEO Kenneth Derr; Phillips Petroleum Co.'s Chairman and CEO Wayne Allen and Texaco Inc.'s Clarence Cazalot, president of oil exploration and production for Europe and the Middle East. Arco said it expected its Chairman and CEO Michael Bowlin to attend. Conoco, a unit of DuPont Co., Exxon Corp. and Occidental Petroleum Corp. also have received invitations but did not comment.

Saudi Arabia possesses around a quarter of the world's proven oil reserves. Weak oil prices have strained its finances in recent years, pushing the country's budget and current account deficits to their highest levels since the 1991 Gulf War.
The kingdom has slashed budgets by 10 % across government ministries and is in the process of privatising postal and communications sectors. The oil sector, however, has been considered of such strategic importance that it has remained steadfast against any opening up to private ownership, even while other Middle East Gulf and OPEC members have opened up their sectors.
There are medium-term plans to privatise parts of the petrochemical subsidiary, SABIC. And analysts see a chance that it may consider opening up its natural gas development to private foreign participation, but see any equity involvement in the oil sector as remote.
"It would be a turnaround of phenomenal proportions," said a Middle East analyst. "There are certainly other moves they could take, short of selling off any oil assets.
He points out that Saudi Aramco has raised $ 4.5 bn through international borrowing this year and has room to do more if it needs to. A sustained oil price slump might lead the kingdom to consider selling equity participation in gas, "which doesn't have the psychological taboo in terms of letting foreigners participate," he added.

Source: not available
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