ALGERIA - Oilfield Profiles - TotalFinaElf Operations - Oil & Wet Gas Fields.

Total, one of the French companies which discovered oil and gas in Algeria before independence, including Hassi Messaoud and Hassi R'Mel found in 1956, has extensive interests in this country. Total and Sonatrach in January 1990 signed a wide-ranging agreement covering JVs in upstream development including several blocks, downstream projects and marketing. These include the Hamra gas/condensate field, south of Rhourde Nouss, which started up in mid-1995 and is now producing 800,000 t/y of condensate and 400,000 t/y of LPG. LPG exports from the field began in October 1995. This is a large wet gas/condensate field found in the 1970s by Total Algerie (then known as CFP). Under a PSA with Sonatrach signed in May 1991, Total developed the field at the cost of $560m which the French major fully covered. Under Total's development programme, gas production from the field was to average about 5 BCM/year. A gas treatment and recycling system at Hamra was installed in late 1994 by Snamprogetti, which was contracted in August 1991. The system has the capacity to produce 1m t/y of condensates and 500,000 t/y of LPG. To recover its investment, Total is being repaid in the form of 10m tons of condensates and 6m tons of LPG over a 14-year period from mid-1995. Total and Sonatrach have a 50-50 JV, Sotal Energy Ltd., marketing the LPG in Europe, North Africa and other areas.

In 1987, Total renegotiated its 49% stake in the Mereksen permit, which is producing some oil with reserves then estimated to last 10 years. In August 1989 Total and Sonatrach revised some of their PSAs, in a deal which led to agreement with a Total-led group for two permits in the Ghadames Basin. The group was to invest $70m and drill six exploration wells in 7,500 sq km. In this group, Total and Pecten (Shell US) held 40%-15% respectively in El Harcha East and 30%-25% in El Agreb West. Repsol held 25%. Kuwait Foreign Petroleum Exploration Co. (KUFPEC) had 20% in both blocks. The two involved a 49-51% PSA in favour of Sonatrach. In the event of production going ahead, Sonatrach would bear up to 33% of development costs. The group's final PSA with Sonatrach was signed in Nov. 1994, after separate technical co-operation deals between Sonatrach and each of Total and Repsol. A financial co-operation accord between the governments of Algeria and Kuwait was signed in 1989 to cover Kuwaiti funding of field development projects.

Burlington Resources (BR) Algeria is developing the Menzel Lejmat (MLN) field in the Berkine Block 405a, in which it holds a 65% working interest in partnership with Talisman Energy of Canada (35%), for first phase production of 16,000 b/d to begin by mid-2002 at a cost of $150m. It is also to develop for satellite oilfields: MLN 3&6, MLC, MLNNW and MLW, for which a plan was submitted to Sonatrach in late 2000 for approval. BR and Talisman are hoping these can begin first oil production in late 2002, to be combined into a 50,000 b/d stream by 2004. Other satellite fields will be linked to this system by then. Now work is focuses on construction of a central production facility and an oil export pipeline. Under their PSA with Sonatrach, BR and Talisman are entitled to recover exploration cost from production "during the exploitation phase of development", while Sonatrach may exercise the option to participate in the development and production of commercial discoveries.

Houston-based BR got Block 405a when it acquired Louisiana Land & Exploration (LL&E) a few years ago. It is drilling appraisal wells on gas prospects in the south-east of the block. On Jan. 25, 2000 BR announced a big find, with MLSE-3 appraisal well having flowed at 21,857 b/d of 41.5 deg. API oil and 26.2 MCF/d of gas from three zones in the Triassic TAG-1 reservoir. A total of 40 metres was perforated and tested, which confirmed a significant accumulation was present in the south-east quadrant of Block 405a. The well was drilled about 4 km to the north-east of MLSE-1, which in the summer of 1998 flowed 14,638 b/d of oil and 107 MCF/d of gas. BR was to drill two more appraisal wells on MLSE. the With BR's PSA having a gas clause, the company will submit to Sonatrach a development plan for the gas. It is said the gas field might extend to Anadarko's gas structure in the adjacent Block 208 to the east. BR and Talisman are hoping first gas production would begin in late 2003. This would be linked to Sonatrach's Rhourde Nouss infrastructure (see below).