Saudi Arabia's foreign minister, Prince Saud al-Faisal, has been holding talks in Los Angeles with the boss of US oil giant ExxonMobil, reportedly in a bid to clear up difficulties over a huge gas deal.

Last June, Saudi Arabia signed a series of interlinked contracts worth about $25bn with eight major foreign firms to develop gas fields the size of Sweden over a 30-year period.

ExxonMobil was chosen to lead the biggest project, know as South Ghawar, or Core Venture 1.

An Exxon spokeswoman confirmed that chief executive Lee Raymond had held talks with Saudi officials, but declined to give any details.

"All I can say is that it's part of our ongoing negotiations regarding the core ventures," said Cynthia Langlands of Exxon.

Profits worries?

The deal, the first major foreign investment in the Saudi energy sector since it was nationalized in 1975, has reportedly run in difficulties.

Analysts say oil firms have become unhappy about high taxes and are disappointed at the size of the reserves available.

Shell, BP and the US company Phillips are also involved in the Core Venture 1 project.

Exxon is also the lead firm in Core Venture 2, a project on the Red Sea coast, where its consortium partners are Occidental and Marathon.

The Shaybah development, or Core Venture 3, is based in Saudi Arabia's south-eastern Empty Quarter desert.

It is to be led by Shell taking a 40% stake, with France's TotalFinaElf and Conoco of the US, each expecting a 30% share.

Export boost?

The projects - to be carried out in co-operation with state-run Saudi Aramco for up to 30 years - are expected to involve the development of natural gas fields, along with power plants, pipelines and water desalination projects.

Saudi Arabia hopes the projects will help convert the country's domestic utilities from oil to gas dependency, freeing up more of the country's crude oil output for export.

Prince Saud, seen as a moderniser, was one of the driving forces behind the initiative and successfully faced down the reluctance of national energy company Saudi Aramco to allow foreign investment in gas exploration and production.

In addition to the largest oil reserves in the world, Saudi Arabia has proven natural gas reserves of 6,600bn cubic metres.