ALGERIA - BHP Billiton Petroleum Operations.

BHP, operating in Algeria since 1989, began producing high quality oil from the above-mentioned fields in October 2004. It found most of these fields in Blocks 401a (Rhourde El Louh) and 402a (Sif Fatima), in Erg Orientale of the Ghadames zone - in eastern Algeria - just north and east of Block 404. Oil production has recently reached a plateau of 80,000 b/d, which will be sustainable through the coming years. BHP is thus the third largest oil producer in Algeria.

In the first phase, production began on Oct. 24 - about six months behind schedule - with a gross flow rate of 18,000 b/d from ROD through a nearby BRN processing facility. Following completion of the ROD central processing facility in late 2004, production rose to 80,000 b/d of Saharan Blend crude oil. Under an integrated development plan for the six fields - all in the Berkine Basin - associated gas and water are being reinjected into the reservoir to provide pressure support. A total of 34 development wells have been drilled. The cost of this project was kept within the original budget and BHP's share of the funding was $192m, representing 36.04% of the capital. Agip funded 63.96%.

BHP Billiton in 2004 acquired further exploration acreage in Blocks 408a/409 offered as part of Algeria 5th international bid round.

BHP holds 45% in the $1 bn+ Ohanet venture. The other partners are Japan Ohanet Oil & Gas Co., Ltd. (30%); Woodside Energy (Algeria) Pty. Ltd. (15%); and Petrofac Resources (Ohanet) LLC (10%). This has developed four gas-condensate reservoirs in the Illizi Basin in southern Algeria. The system consists of a gas treatment facility with a capacity of 20 MCM/d, on stream since Oct. 27, 2003, fed by 43 production wells, of which 28 are new and 15 are re-completions of existing oil producers. BHP processed 3D seismic data across all reservoirs and incorporated them into the reservoir models. Four more wells are to be drilled by 2007. BHP Billiton's share of funding for this project was $464m.

In a press release on Oct. 27, 2003, BHP Billiton explained that the new processing facility was to treat around 710 MCF/d of gas and produce a maximum of 30,000 b/d of condensate and 26,000 b/d of LPG, together with a stream of dry pipeline sales quality gas for Sonatrach. BHP Billiton Petroleum CEO Philip Aiken said: "The delivery of the Ohanet development is another example of BHP Billiton's ability to deliver a complex project in a challenging operating environment. By any measure - technical, financial, or health and safety - the project is an outstanding success..."

In addition, BHP sold to Woodside a stake in the East Hassi R'Mel gas study agreement. The parent BHP Billiton, the world's biggest diversified resources group, has been negotiating with Sonatrach on the latter's possible use of BHP's radical compact LNG technology known as cLNG (see background in Vol. 60, Gas Market Trends No. 6).

Burlington Resources (BR) Algeria has developed the Menzel Lejmat North (MLN) field and its satellites in the Berkine Block 405a, south of the Ourhoud giant, in which it holds a 33% equity in partnership with Sonatrach and Talisman Energy of Canada. The first phase of oil production came on stream in 2003 at the rate of 33,000 b/d. This rose to 45,000 b/d in 2004 and it should reach 80,000 b/d later this year.

Houston-based BR got Block 405a when it acquired Louisiana Land & Exploration (LL&E) a few years ago. On Oct. 13, 2001 it got Berkine Basin Block 402d. Earlier in 2001 it got Block 215. By April 2002 BR had spent almost $370m in Algeria and was to invest a further $250m in Block 405a (see background in Vol. 56, Gas Market Trends No. 6).