- RIYADH/SINGAPORE,
Jan 27 (Reuters) - China's state-owned Sinopec Group has won a deal to
explore and produce gas in Saudi Arabia in the second of three blocks to
be awarded this week, industry sources said on Tuesday.
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- The award of Block B, measuring about 38,000 square kilometres,
follows Monday's announcement that Russia's LUKOIL had won an auction for
rights to find and pump gas in the 29,900 square km Block A.
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- Officials at Saudi Arabia's oil ministry were not immediately
able to confirm Tuesday's deal but a Sinopec official said Saudi Arabia's
state-owned Saudi Aramco would hold a 20 percent stake in the venture.
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- Sinopec International Petroleum Exploration and Production
Corp, a Beijing-based unit of Sinopec Group, would own the remaining 80
percent, he said.
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- He declined to give Sinopec's estimate for gas reserves
but said the deal set an exploration period of 10 years.
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- Results of bids for a third, 51,400 square kilometre
block, which Sinopec is also competing for, will be revealed on Wednesday.
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- Both Saudi officials and international oil companies
have stressed that this week's auctions have been decided on precise technical
criteria and say the assessment of bids has been transparent and open to
all competitors.
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- STRATEGIC ALLY
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- But the success of Russian and Chinese firms could also
help Saudi Arabia forge closer cooperation with the world's second biggest
oil exporter and fastest growing market.
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- Saudi Aramco has a 25 percent stake in a planned $3 billion
refinery and petrochemical venture led by Sinopec. It is China's largest
crude supplier and also looks to supply China's planned strategic oil reserve.
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- Saudi Oil Minister Ali al-Naimi said at this year's economic
forum in Davos that his country's ties with Beijing were likely to get
stronger.
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- "China is actually becoming quite a strategic ally
for us in the energy business," he said. "They want to come upstream
in Saudi Arabia. They are welcome, and we want to be downstream in China,
where we are welcome."
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- Riyadh presented the three areas totalling 120,000 square
kilometres last summer in a bid to reignite investor interest in gas exploration
after the collapse of its $25 billion natural gas opening.
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- Saudi Aramco will be a partner in each of the three areas
in the South Ghawar region, which roughly cover the acreage originally
offered to Exxon Mobil in negotiations that broke down last year.
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