RIYADH, Saudi Arabia, June 24 — Saudi Arabia is showing renewed interest in breaking the logjam
holding up a landmark deal with eight major oil companies that would reopen the kingdom to foreign investment.

Crown Prince Abdullah, the country's effective ruler and the plan's champion, told Philip B. Watts, the chairman
of Royal Dutch/Shell, and Lee R. Raymond of Exxon Mobil, in separate meetings over the weekend, that the
team of ministers hammering out the Saudi side of the deal would reconvene within two weeks, people in the
industry and oil analysts said today.  Negotiations over the $25 billion, 20-year deal to develop natural gas
resources could then recommence by the end of the summer, they said.

Since the preliminary agreement was signed with great fanfare in June 2001, the two sides have missed two
announced deadlines for a more definitive deal. They hit impasses over the share of revenue sought by the oil
giants and over guarantees for additional gas reserves to run the water, power and desalinization plants the
companies had tentatively committed themselves to build.

Industry analysts say the unusual deal has suffered in part because of the Arab-Israeli conflict. The crown prince
and the foreign minister, Prince Saud al-Faisal, have been distracted by the kingdom's peace initiative, and other
Saudi officials, particularly Ali Naimi, the oil minister, who worked his way up through Aramco, the state oil
company, have been reluctant to make any concessions to the oil companies.

"In a sense, it was much more an institutional battle than an economic battle," said Fareed Mohamedi, the chief
economist at the Petroleum Finance Company. "The institution of Aramco gets unnerved by all these oil
companies coming close to its crown jewels."

Some analysts said the government might not have wanted to sign a major deal welcoming in foreign oil
companies at a time of open public hostility toward the United States, nor at a time of criticism by Osama bin
Laden and his followers over the presence of foreign troops in the holy land of Islam.

But Saudi officials adamantly deny any direct link between delays in the gas deal and differences with the United
States over Middle East policy. They have said repeatedly that their oil will be treated as strictly a commercial
question, not a political weapon.  Despite the difficult negotiations, oil company officials, industry analysts and
diplomats expect a deal to go through ultimately, even if the twists in Middle East violence again distract the government.

The kingdom intended the gas deal as a showpiece to advertise its openness to foreign investment. To let it fall
apart now would send a negative signal at a time when the country desperately needs new private-sector jobs
to alleviate unemployment estimated at 15 percent.

"If it does not go ahead, other companies looking at Saudi Arabia will say that if an oil company can't make it in
Saudi Arabia, what chance do I have?" said Brad Bourland, chief economist at the Saudi American Bank.

The energy giants, on the other hand, would find it hard to walk away from Saudi Arabia, where they were
eased out of the oil business more than 20 years ago. The government has stated repeatedly that the gas deal
will never regain them access to crude oil, but the idea remains too tantalizing to abandon lightly.

The deal's odd nature has caused some of the delay. "It's a very different concept than has ever been tried
before; usually you discover gas first and then build the downstream projects," said Walid Khadduri, an analyst
with The Middle East Economic Survey. Oil companies usually get 15 to 20 percent of revenue in gas development
projects, to compensate them for the risk of exploration, and they are seeking similar terms in Saudi Arabia.

But in this deal, they also want those terms to apply to the downstream gas-using utilities they would build and
run, and there the Saudi side has balked. Analysts said the recent rebound in oil prices has given Aramco and
the Ministry of Oil breathing room to reshape the deal. Saudi officials say that 8 or 9 percent is typical for utility
projects in the region, and are somewhat weary of the oil companies pleading poverty when oil prices are hovering
around $25 a barrel. If the oil companies stick to their demands for 10 to 12 percent, the Saudis have hinted,
they may reopen bidding on the deal.

The Saudi side also asserts that the companies' demand for proven reserves for the utilities means they are
trying to eliminate the risk that they nonetheless want to be compensated for with a fat return percentage.

"The companies are really bargaining for the minimum investment and exploration," one Saudi official said.
"Instead, they want to take gas in large quantity that was already discovered by Aramco. They want to minimize
their risk or not take any risk in terms of exploration and have a good return downstream."

The oil companies are concerned about becoming utility companies, especially given that Saudi Arabia has, for
example, a patchwork of water companies and no unified rate for water bills. Analysts said they were also wary
about depending on Aramco to make up any shortfall in gas, because the company's past emphasis on crude
means some Saudi petrochemical plants already suffer from delivery shortfalls.

The Saudis say the whole point of the deal was to get the oil companies and not the Saudi treasury to pay the
hundreds of millions of dollars needed to explore for gas. The Saudi government does not want to raise utility
prices for consumers, nor to subsidize the companies' revenue demands from its depleted treasury.

"We want a fair deal, a good deal, where we feel comfortable," said Ibrahim al-Muhanna, the spokesman for
the Ministry of Oil. "We want to serve our national economic interests and at the same time give the companies
a reasonable return."

Exxon Mobil is the group leader for two projects under the deal. Its partners in the $15 billion South Ghawar
project include Shell, BP and Phillips; a $5 billion project on the northern Red Sea coast will be divided with
Occidental and Marathon.

Shell is the lead partner on the third of the deal's three main projects, a $5 billion venture in the south shared
with TotalFinaElf and Conoco.