U.S. and European oil-company bosses are heading for Saudi Arabia over the next two weeks to discuss plans to spend billions of dollars on oil and gas projects in the desert kingdom. The visitors will include the CEOs of Exxon Corp., Phillips Petroleum Co., Texaco Inc., Conoco Inc., Chevron Corp., and Marathon Oil Co.
In the 1970s Saudi Arabia nationalized petroleum assets, but now the U.S. companies want to regain a foothold, an objective shared by BP Amoco PLC of Britain, Royal Dutch/Shell Group, TotalFinaElf of France, and ENI SpA of Italy -- which were also ousted. Oil analyst Nathaniel Kern notes: "This is a major step to reopen the world's largest energy fields -- a quarter of the global total -- to foreign investment." The U.S. and European operators covet the Saudi oil and gas fields because of their sheer size and low production costs. That ambition matches the need by Saudi Arabia, which has been running large budget deficits, for foreign investment. "This is a clear sign of how much we value our special relationship with the U.S.," says Saudi Arabian oil expert Nawaf Obaid.