"It looks like Saudi Arabia will send the proposals back to the street very soon and the companies will pick and choose and bid on everything," said a Western analyst who has monitored the kingdom's oil industry for nearly 20 years.

Last year, Crown Prince Abdullah tantalised the international energy industry when he asked oil majors to present investment ideas to the kingdom, by far the world's biggest oil producer and exporter.

Top executives flew in to shake hands with Saudi Arabia's most powerful princes to lobby on behalf of the world's leading oil companies armed with Financial muscle and technological know-how.

Companies tired of waiting
But the fierce competitive race soon turned into a waiting game as firms drew up ambitiousproposals while struggling to understand everything from Saudi Arabia's technical needs to the mysterious oil politics of the ruling al-Saud family.

That can soon change.

On Wednesday, a Saudi ministerial panel finalised a study aimed at formulating a long-term strategy on foreign investment in the kingdom's vast energy sector which included proposals by global oil giants, newspapers reported on Thursday.

The influential Petroleum Ministerial Committee, chaired by foreign minister Saud al-Faisal, is now to submit the study to Crown Prince Abdullah, in one of the few tangible signs that Saudi Arabia is ready to get down to business.

Still defining investment course
But industry sources cautioned that foreign companies should not jump to any conclusions in Saudi Arabia, one of the Middle East's most cautious countries.

"Saudi Arabia is still trying to define exactly what course it should take in terms of investment in oil and gas from these companies," said one industry source.

Thekingdom, which sits on the world biggest's oil reserves at 260 billion barrels, has made it very clear what it does not want -- foreigners grabbing a share of its prized oil production and exploration sector.

Saudi Arabia has put projects such as natural gas schemes with added value for the economy on the top of its priority list.

"A lot of companies are showing an interest in natural gas projects," said a Saudi oil source familiar with official policy.

Tough competition
Analysts said that as the kingdom measures how much it can offer foreign companies Saudi Arabia cannot afford to overlook its neighbours' efforts to court the same companies.

Opec giant Iran is enticing firms with its biggest energy opening since the 1979 Islamic revolution -- 40 projects worth over $8 billion that offer more attractive terms.

Kuwait hopes oil majors will invest some $7 billion to boost its production over the next decade.

Iraq, which is cranking up production despite stringent UN sanctions imposed afterits 1990 invasion of Kuwait, has already signed up oil companies to participate in its post-embargo oil reconstruction efforts.

The Saudi oil source played down competition in the region, saying oil firms will invest everywhere as long as they are guaranteed a healthy return on their capital.

"This is not an issue. These oil companies just want a return on their investment and banks will always provide the financing," he told Reuters. Despite frustrations, oil companies say they would be unwise to give up investment opportunities in the kingdom, which currently has excess production capacity of three million barrels per day, close to Iran's entire Opec production quota.

But many of the 19 companies that have presented proposals so far are expected to move prudently before putting down big money.

"These companies will also be cautious. They don't want to be herded around like cattle and move all over each other," said an industry source.

For now, foreign oil companies are pushing for an edgeover competitors in a country where Crown Prince Abdullah, who is increasingly running the day-to-day affairs of state, has ushered in a new mood of reform.

But that won'T be easy in a country where information on official policy, especially in the strategic oil industry, is scarce.

"We will give back the proposals which each conmpany submitted to everyone and each company will have a chance to bid on every project. Nobody will have an advantage," said the Saudi oil source.