Lukoil Still Negotiating Gas Price With Aramco

Russia’s Lukoil is still in negotiations with Saudi Aramco on the gas offtake price before it can start drilling in its gas field in the Empty Quarter, and hopes to start drilling for tight gas in Block A, sometime next year, MEES understands.

Lukoil, Shell and China’s Sinopec are the only remaining foreign oil companies drilling for gas in the kingdom, though progress has been slow and hinges on reaching an acceptable compromise on the price of gas, which will be expensive to produce in a remote area with little infrastructure.

The price negotiations between Saudi Aramco and Lukoil have been ongoing since the Russian upstream player announced a major discovery in 2006. But while the two sides appear to be edging closer to an agreement, a deal has so far proved elusive despite the kingdom’s dire need for gas for power generation and as feedstock for petrochemicals production. (CONTINUED - 797 WORDS)