ALGERIA - Oil & Gas Fields & Foreign Operators.

Tin Fouye/Tabankort & TotalFinaElf/Repsol: This is a combination of small oilfields (TFT) of 900 sq km in the Illizi Basin near the Libyan border found in 1966 and large gas structures discovered later. It produces 41.2o API oil from two Fms: Tin Fouye's Devonian (4,600 ft) and Tabankort's Ordovician (6,560yft). Sonatrach had said TFT's output would fall from 4.55m t/y in 1993 to 3.81m t/y in 1994 and 2.4m t/y in 1998. JGC/Itochu in mid-1987 installed an associated gas recovery system at the fields. In January 1996, Sonatrach signed a $850m PSA with a Total/Repsol partnership for Total (now TotalFinaElf) to develop TFT's gas structures, which have 300,000 MCM of wet gas. Sonatrach took 35% in the JV and was to bear its share of the investment and receive all the dry gas. Total took 35% and Repsol (now Repsol/YPF) took 30%. The LPG/condensate output for 20 years was to be shared accordingly.

Development began shortly thereafter, and the first phase came on stream in March 1999 at the rate of 5 MCM/d of wet gas. The second gas processing train came on stream in August 1999 and raised output to 15.5 MCM/d, with the maximum capacity of 20 MCM/d attained in 2000. At this capacity TFT gas can yield 23,000 b/d (850,000 t/y) of condensate and 26,000 b/d (750,000 t/y) of LPG.

Development work included the drilling of 30 wells to boost output at 30 existing wells and building an LPG separation plant to process the wet gas. Brown & Root Condor (BRC) won a $600m contract to design and build the plant. (BRC is a JV of Condor and Brown & Root. Condor, an engineering firm, is owned 30% by Sonatrach, 30% by its oil marketing unit Naftec and 40% by Centre de Dveloppement des Matriaux).

Edjeleh & Mereksen/TotalFinaElf: Found in 1956, Edjeleh produces 37.2o API oil from a Devonian Fm at a depth of less than 5,000 ft. The field is depleting rapidly. It was said in the early 1990s that, despite an EOR system already installed, its capacity could fall from 25,000 to less than 10,000 b/d by 1998 unless further investment was made in the field by Total. Mereksen, found in 1974, produces 45.8o API oil from a Triassic Fm at a depth of 9,450 ft. Now it is producing less than 10,000 b/d with reserves estimated to last another six years.

TotalFinaElf (TFE) has held 49% in Mereksen under a PSA first signed in 1975 and renewed for five years in 1987. TFL has wanted a PSA covering Mereksen, Edjeleh and other fields and has offered to install major EOR systems in them. Total, one of the French firms that discovered oil and gas in Algeria before independence, including Hassi Messaoud and Hassi R'Mel, has other E&P operations in Algeria. These include Blocks 432, 444s and 403n - 3,079 sq km - in the prolific Berkine Basin south of Rhourde Essid. TFE got the blocks on Oct. 13, 2001, and was committed to spend $18.5m. In June 2002 TFE got the Timimoun Basin Blocks 325a and 329 in the south-west in 85/15 partnership with Cepsa of Spain. TFE is also develop-ing the Hamra gas field (see below).

Gassi Touil is an interesting oilfield in and around which Sonatrach has found six major gas fields containing over 255 BCM in the western flank of the Berkine Basin. The Gassi Touil Gas Integrated Project, the first mega-venture of its kind now on offer in Algeria, requires one of the world's biggest majors to spend up to $5 bn in developing the gas fields, piping the output to the coast where it will have a liquefaction plant built and export it in LNG form. The LNG plant's capacity will be up to 5m t/y. All the majors, including Shell and ExxonMobil that want to catch up with BP and TFE in Algerian mega-ventures, are studying this project. Shell in mid-2002 signed a momentous MoU with Sonatrach to develop oil and gas projects jointly in both Algeria and other parts of the world. The MoU covers upstream and downstream projects. "The intention is to set up joint project groups to identify and evaluate opportunities throughout the energy value chain", Shell said of the MoU (see OMT 7 and 8).

The Gassi Touil oilfield in the El Biod High zone, 150 km south-east of Hassi Messaoud, is part of Sonatrach's E&P operations. It has new gas gathering and compression facilities installed in late 2001 by Sofresid of France (a unit of Bouygues Offshore) under a contract awarded in July 1999. Associated gas is recovered from separation of the oil, carried to a compression station with a capacity of 4.9 MCM/d and operating at a pressure of 152 bars, and then reinjected into oil producing wells. The field, found in 1961, is said to contain 595m barrels of oil and 6.9 TCF of gas reserves which Sonatrach says are recoverable. In early 2001 a Japanese consortium of JNOC, Teikoku and Itochu signed with Sonatrach an agreement to appraise and further develop the field. Partly as a Tokyo reward for this and other deals won by Japanese companies, the Japan Bank for International Cooperation  (JBIC) on May 11 gave Sonatrach a Y18,600m (then worth $152m) cover for 31,100m ($254m) loans without a government guarantee. This was the first time that JBIC ever took on a Sonatrach risk without a government cover on the Algerian side. The loans are to finance a set of projects to stabilise gas production at Hassi R'Mel won by Japan contractors (see following pages).

Sonatrach Finds: Sonatrach's annual oil and gas discoveries are not always publicised the way foreign companies do in Algeria. Unlike these firms, the state concern is not always keen on making such announcements because it does not depend on company valuations by world stock markets. It will have to do so eventually, if it is to be privatised and to raise capital from such markets.

Discoveries get to be known in detail when Sonatrach offers them for foreign companies to develop. These firms have to pay Sonatrach dearly for the related data even if their subsequent bid is turned down, one of the many small reasons its management and socialist allies in parliament do not like Minister Khelil's draft law that could lead to its de-monopolisation and privatisation (see OMT and who's who in Review No. 8).

In 2000 Sonatrach achieved a 63% success rate in exploration drilling, with five discoveries recorded. Foreign operators in 2000 also made major discoveries, including Burlington Resources' large oil and gas find in the Berkine Basin. These made the Energy and Mines Ministry say that Algeria's proven oil reserves reached 1,800m tons (about 12,700m barrels) and proven gas reserves were put at 3.1 million million cubic metres (see Vol. 56).

Flaring of associated gas is to end by 2010 in Algeria. Under a DA19.8 bn ($245m) programme launched in 2002, Sonatrach should raise the associated gas recovery rate from 80% (32 BCM/y) in 2001 to 93% (36 BCM/y) by 2006. The remaining 7% will be in remote and uneconomical fields, where flaring would end if the government receives foreign funding for this. Foreign Operators In New Fields: There are several new oilfields in production, and others are coming on stream shortly, all found, developed and operated by foreign companies:

Agip - Bir Rebaa: Agip, the first foreign firm to produce oil in Algeria under a PSA, operates Bir Rebaa (BRN) where the output has fallen from 80,000 b/d in late 1998 to 20,000 b/d. BRN, in Zemoul El-Kebar permit, was found in early 1990 in a Triassic reservoir at a depth of 3,880 metres. Its northern extensions were found in the following two years in Triassic and Devonian reservoirs at depths of up to 3,950 metres.

The field came on stream in June 1995 at a capacity of 30,000 b/d of 41.5o API oil - with 150 CM of gas per CM of oil. The capacity rose in two phases to reach 75,000 b/d in early 1997 and 80,000 b/d in late 1998. But it fell with a steady decline in reservoir pressure. Exports began in October 1995. The oil is carried by a 20-inch, 230 km pipeline to the Mesdar storage and transfer station. From there it is pumped to Haoud El Hamra terminal through a 26-inch pipeline. Agip has spent over $750m on the field. It has recovered all exploration costs. Development spending was split 50-50 with Sonatrach. Profit oil ranged from 65-35 in Sonatrach's favour for up to 15,000 b/d, to 87.5-12.5 for over 75,000 b/d.

Agip was the first on Dec. 17, 1991, to sign a PSA under a new law. This covered the 6,800 sq km East Zotti permit, Blocks 431 and 216. It was the third acreage held by Agip. It has made big oil finds in its Zemoul El-Kebar blocks 403 and 403A, in Erg Oriental 180 km east of Hassi Messaoud.

In block 403 it has found Bir Rebaa's extensions and Rhourde Messaoud field. The latter has five pay zones at depths of 3,307 to 3,587 metres and in 1986 tested about 5,000 b/d of 40o APS oil in an area close to El Borma field near the Libyan border.

In Block 403a, Agip in early 1996 found Hassi Berkine North and the well HBNN-1 flowed at 15,000 b/d of 41o oil without water, hydrogen sulphide or carbon dioxide. HBNN-2 in the first week of January 1997 tested more than 12,000 b/d of similar oil. But this major discovery proved to be an extension of Anadarko's Hassi Berkine field (HBNS) in block 404a. The two companies and their partners have since agreed on a joint development of the whole structure (see Anadarko profile below).

On June 3, 1996, Agip signed its fourth PSA with Sonatrach for Wadi El-Teh field, Block 440, discovered by Sonatrach in the 1980s. This is in the Sahara about 1,000 km from the coast and 200 km south-east of Hassi Messaoud. Agip was to invest $21m in four years and drill at least three exploration wells. It was to cover all exploration costs and pay Sonatrach for what it had spent on previous exploration at the block. Sonatrach was to take 25% in development work and had an option to raise this to 35%.

On May 27, 1997, Agip signed a fifth PSA for the 2,284 sq km Block 213 in the Amedjene area, at the south-western edge of the Ghadames Basin and about 250 km to the south-east of Hassi Messaoud. Agip was to drill five exploration wells over five years at a cost of $31.7m.

In mid-1999, Agip bought 41.25% into Berkine Basin Blocks 401a and 402a operated by BHP Petroleum of Australia (now an Anglo-Australian group called BHP Billiton). This resulted in its purchase of 13.75% held by Lasmo (a UK company bought by Agip in early 2001) and 27.5% held by the US company Anadarko and Maersk of Denmark. The blocks contain the major Rhourde Ouled Dejmaa (ROD) and SFNE oilfields. ROD and SFNE extend into Agip's Block 403a, which contains the oil producing BRN field.

Integrated development of ROD, SFNE, BRN, BSF, RDB and a satellite field has led to a joint Agip (55%) and BHP (45%) venture operated by BHP.

Lasmo (Agip) has a 25% stake in Blocks 404/404a, 208 and 245 in which Anadarko is operator. Lasmo has 32.67% the operatorship in the El Ouar and In Amedjene North (IAN) blocks, at the southern end of the Berkine Basin, which it got in 1999 as it purchased Monument Oil & Gas of the UK. The other partners in these two gas/condensate blocks are Sonatrach (51%) and Asamera (a unit of Gulf Canada). Finds in them are being developed.

In March 2001, Agip sold to Teikoku Oil of Japan a 20% stake in Block 222b in eastern Algeria for $1.6m. Tullow Oil of Ireland holds 30% in this block, where Agip began exploration drilling in mid-2002. (See other Agip interests on following pages).