ALGERIA - Oilfield Profiles - Anadarko/Agip.

In addition, a 75,000 b/d production stream is being developed at the newly named El Biar field - formerly known as Anadarko's Hassi Berkine North (HBN) in Block 404 and Agip's HBNN in Block 403a which have the same Triassic reservoir. As the field straddles both blocks, Anadarko, Agip and Sonatrach have agreed on a unitised development and the field should be on stream by 2002.

The JV agreement was signed in late 1999. Preliminary cost and production split have since been put at 74.5% to Sonatrach/Anadarko and 25.5% to Sonatrach/Agip. The El Biar development plan includes construction of a third production train at the central processing facility at HBNS, a gas gathering system, injection lines, storage and export facilities. The three trains at HBNS will have a capacity of 210,000 b/d by 2002. The EPC contract for El Biar has been awarded to BRC as an addendum to the HBNS-2 contract awarded earlier in 1999. Together, HBNS-1/HBNS-2, Ourhoud and El Biar will be producing 590,000 b/d by 2003.

Anadarko is also spending $882m on development of the gas structures at Ekt, El Merk, and El Merk Nord and Est. Together, they will be producing about 4,000 MCM/year by 2004.

Investing about $2.5 bn in a programme to include 150 wells, Anadarko has made Algeria its main oil zone. To the US firm, in which Sonatrach has a stake, Algeria is more important than Yemen has been to Hunt. Anadarko has discussed various options for other companies to help fund its programme. (Sonatrach has helds 10.2% in Anadarko Petroleum of Houston, a stake acquired in the 1980s as part of a settlement of an old dispute over LNG prices and supplies between Panhandle and the Algerian concern. Now Panhandle markets LNG for Sonatrach in the US. Anadarko Petroleum was created in 1985 as a unit of Anadarko Production. The latter was established in the 1950s as part of PanEnergy. AP first concentrated on gas in the US and later acquired gas interests in Canada. Now Algeria is its main base for oil, and has oil interests in Alaska, the Gulf of Mexico, and the US. It has exploration interests in Peru, Jordan and offshore Eritrea. In mid-2000 Anadarko acquired Union Pacific Resources Group for $4.43 bn in the largest merger between US independents

On June 15, 1989, Sonatrach signed its first deal with Anadarko and the US firm pledged to invest $100m. It was the first E&P deal with a US firm after Algeria's August 1986 legislation. It was also the first time that Anadarko embarked on exploration outside N. America. Under a PSA finalised on Oct. 23, 1989, it was to drill 10 exploration wells in four blocks in the Ghadames and Illizi basins, S-E of Hassi Messaoud: Gara Tisselit, 7,650 sq km; Berkine, 5,096 sq km; Sidi Yedda, 4,700 sq km; and El Merk, 3,300 sq km. Work on the first well began at end-1991. The first major oil find was made in Feb. 1993 at El Merk. Since then several major oil finds have been made, mainly in 1994 which then accounted for most discoveries and were the biggest in the world. In early 1995, Anadarko said the reserves it had in place by then exceeded 900m barrels. In October 1995, it revised the estimate to about 1,500m barrels. In late 1996, after more discoveries were made in Berkine and El Merk East (EME), it said its reserves exceeded 2,000m barrels. In late 1998 it said total reserves in place were more than 4,500m barrels, with over 2,000m barrels recoverable. Sonatrach executives say the Berkine and EME fields actually contain up to three times the figures announced, putting emphasis on Hassi Berkine South (HBNS) as the largest among the fields. In January 1992, Anadarko alone acquired blocks 223b, 235a and 244b 200 km N-W of In Amenas fields.