The Royal Dutch/Shell Group's partnership with the Saudi government and its people extends over more than four decades.

The company's activities in the Kingdom currently include five major joint ventures, making it an industry leader and one of the largest foreign investors in the Kingdom, with a total of $7.8 billion having been spent on these projects.

Now, this unique relationship with the Kingdom, Sabic and Saudi Aramco is set to be further enhanced with the recent signing of historic agreements between Shell and seven other International Oil Companies (IOCs) to develop some of Saudi Arabia's vast natural gas exploration and production concessions and integrated downstream projects.

As part of the agreements, Shell will be the leader of Core Venture 3, to develop fields in the Shaybah and Rub Al Khali areas, while it will also have a share in Core Venture 1, to develop the fields South of Ghawar. The project awards confirm Shell's expertise in the exploration and production of gas. They are also testimony to the Group's long-standing relationship with the downstream sector in Saudi Arabia, during which Shell has achieved a common understanding of the synergies and mutual business potential in the country.

Shell is said to be intending to invest large sums on petrochemical projects in Jubail, complementing existing Shell joint ventures with Sabic and Saudi Aramco.

''There are big opportunities in front of us for the achievement of our desired targets,'' said chairman of the Shell Group of Companies in Saudi Arabia Floris Ansingh.

''We can expand our investments in the Kingdom, specially in the industrial city of Jubail which is considered to be one of the most modern industrial cities in the world.''

''It has all the basic and necessary infrastructure and the ability to accommodate future expansion plans,'' he said.

''In addition, there is a flexible investment environment for the establishment of a wide range of industrial projects in view of the availability of raw material, existing basic infrastructure and the proximity of the city to the energy sources and the international sea routes,'' he added.

These gas projects represent a landmark and source of pride for Shell, being the largest integrated development the group has ever embarked upon anywhere in the world and will be an opportunity for the Group to share its knowledge and work closely with Saudi Aramco.

The project will involve three of the Group's businesses: Exploration and Production, Gas and Power and Chemicals.

The signing of the gas agreements between Riyadh and the IOCs is seen as a key element in the Kingdom's plans to move to the next stage of industrial development involving both Saudi and international investors.

In particular, they will be a building block for industrial change in the Kingdom, which is now witnessing new investment laws, planned privatisation of many aspects of the Saudi economy, entry into the World Trade Organisation (WTO) and the liberalisation of the laws of ownership.

For Shell, they also add to the already significant presence that Shell's Oil Products Business has in the Kingdom, including the Peninsular Aviation Services Company (Pasco), Saudi Arabian Markets and Shell Lubricants Company (Saslubco), Shell Lubricating Oil Company (Josloc), Saudi Aramco Shell Refinery (Sasref) and Saudi Petrochemical Company (Sadaf).

''The signing of the Saudi Gas Initiative is clearly a very important milestone for the future of the Kingdom of Saudi Arabia,'' says Phil Watts, the chairman of the Committee of Managing Directors of the Royal Dutch/Shell Group.

''The award of the three Core ventures to consortia comprising eight of the world's leading international energy companies will create the opportunity to develop world-scale projects which will bring major benefits to the Kingdom and its people,'' he adds.

The projects are expected to provide power and water to meet the future needs and growth of the Saudi people and the country's industrial development.

''It is expected that there will be further industrial development in the petrochemical sector which, with the power and water projects, will also provide beneficial training and employment,'' Watts continues.

The Core Venture initiatives prepared by Shell envisage a multi-billion dollar integrated project comprising upstream gas and downstream gas, power and petrochemicals.

Shell's relationship with Saudi Aramco goes back to a time when the state oil company was investing heavily in developing its Master Gas System, in which Aramco utilises captured gas which was previously flared.

On the back of these developments, major industrial projects such as Sadaf (a 50:50 joint venture between Shell and Saudi Basic Industries Corporation - Sabic) were established.

In addition, since 1996 Shell's Middle East New Business Team had been working towards the recent historic signings, when it made its first approach to Aramco to explore the possibility to work together on some technological opportunities.

Shell's history in the Kingdom dates back to the 1940s with aviation and lubricants business, which was then managed from neighbouring countries. In the early days, Shell partnerships flourished and business grew.

This led to Shell embarking on its first and biggest joint venture in Saudi Arabia when in 1976 it set up a refinery in the Eastern province city of Jubail, in partnership with Petromin.

Sasref remains one of the largest and most modern refineries in the world.

As the Kingdom's aviation needs continued to expand, in cooperation with BP and Saudi partners, Shell decided to form another joint venture, Pasco, in 1977. Pasco is today one of the leading suppliers of aviation fuels, advanced lubricants and special products in the Western Province of Saudi Arabia.

In 1985, at about the same time that Sasref was commissioned, two lubricants joint ventures were formed to produce Shell lubricants in the Kingdom, meeting growing local demand. Josloc and Saslubco have both proved highly successful partnerships, maintaining clear market leadership in automotive lubricants.

Also in 1985, another major Shell investment was made, again in Jubail. Sadaf, a joint venture between Sabic and Pecten Arabian Company (an affiliate of Shell Oil Company USA) commenced commercial operations in the next year.

Shell's investments in the Kingdom will continue as the country continues to play a pivotal role in the future of global oil, gas and petrochemical industries.

As one of the leading investors, Shell will seek to enhance a long standing tradition of successful partnership, remaining an integral part of Saudi life into the future.