Reuters: Russia's Lukoil Last to Leave Saudi Arabia's Search for Gas

Lukoil will likely pull out from Saudi Arabia where the economics of its search for gas have been crushed by the collapse of the oil price, three industry sources said.

Lukoil is Russia's largest private oil company. The Russian energy industry's ventures abroad often parallel Kremlin foreign policy, which has turned cooler towards Saudi Arabia. Some in Moscow blame Riyadh for allowing the oil price drop, which has hobbled Russia's economy, by not cutting output.

Lukoil was the last company left active in the consortia of international oil firms Saudi Arabia invited in 2003-2004, part of a high profile drive to find gas in its southeast Empty Quarter, the Rub al Khali.

It has a majority stake in Luksar -- a joint venture with state oil company Saudi Aramco -- which was set to drill deep for the unconventional gas, called tight gas, this year after more than a decade-long hunt for conventional deposits that has proved futile.

Luksar was winding down, an industry source said.

"By June, six or seven people will be there, so this is not a company anymore," the source said. "There are so many economic issues, it is uneconomic, with the low oil prices, the deep targets, it is expensive."

A Lukoil source said the exit was likely. MORE