ALGERIA - BHP Billiton Petroleum Operations.

BHP, operating in Algeria since 1989, will begin producing high quality oil from the above-mentioned fields in early 2004. It found most of these fields in Blocks 401a (Rhourde El Louh) and 402a (Sif Fatima), in Erg Orientale of the Ghadames zone just north and east of Block 404. Oil production will have a plateau level of 80,000 b/d.

An equal partnership of Saipem and Bouygues in January 2002 won the $257m EPC contract to build and instal collection and treatment facilities as well as a gas and water injection system to maintain field pressure, and a treatment plant at Agip's BRN production centre in Block 403. The system will include 19 production wells, 13 water injection wells and 5 gas injection wells.

The six fields have 299m barrels of gross reserves. BHP's entitlement under the PSA with Sonatrach is about 65m barrels. The fields will also produce 170 MCF/d of associated gas, but BHP and Agip will not have access to this other than the fuel needs of the oil production stream. Total costs in this venture exceed $650m. The PSA, initiated in December 1988, was ratified by BHP and Sonatrach on June 24, 1989. The operator, BHP Petroleum (Algeria), is registered in the US (see background in Vol. 56, Gas Market Trends 6).

BHP is operating in another block, Boukhechba (9,000 sq km) north-west of the Illizi Basin, which it acquired under a PSA signed with Sonatrach on May 31, 1997. BHP was to spend $62m and drill eight exploration wells. In late 2000 BHP brought into this block Woodside Petroleum of Australia as an equal partner.

BHP also gave Woodside 15% in the $1 bn Ohanet risk service contract (RSC), where its other partners are Japan Ohanet Oil & Gas (JNOC, Itochu & Teikoku together holding 30%) and Petrofac Resources (10%), with BHP retaining 45%. This in the Illizi region, about 1,300 km south-east of Algiers. It consists of four fields containing proven and probable reserves in excess of 3.4 TCF of gas, 107m barrels of condensate and 116m barrels of LPG. First production is due in October 2003. The fields will produce 700 MCF/d of gas, 30,400 b/d of condensate and 27,700 b/d of LPG. A JV of Sharjah-based Petrofac International and ABB Lummus Global, both of the US, got the $574m design and EPC contract in 2000.

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.