ALGERIA - Part 1 - Oil Output To Exceed 2M B/D Before 2010.
Algeria is under-explored, with its Sahara still being virgin territory. Less than ten wildcats have been drilled per 10,000 sq km in Algeria. In North America there are 500 wells per 10,000 sq km. According to the state concern Sonatrach, there have been about 40 oil and gas discoveries since 1997. There were more than 15 oil and gas finds in 1998 as Algeria reaped the rewards of a revised E&P system. Sonatrach this year will lose its monopoly and compete with foreign firms in upstream and downstream operations (see Gas Market Trends of this week. See profiles of Algeria's oil & gas fields and of the operators in Part 2).
The energy base in Algeria keeps expanding. The shift to natural gas in local consumption has been rapid. With bold reforms, the macro-economic indicators are much better than in recent years (see Downstream Trends). The country's proven oil reserves are estimated independently at less than 10 bn barrels. In addition, there are about 7 bn barrels found in the past 12 years to be tapped. Algeria's proven gas reserves exceed 4.5 TCM. Sonatrach estimates the ultimate gas potential at about 5.8 TCM.
Algeria in mid-2002 asked for a higher oil production quota from OPEC. It is determined to get this in 2003 in view of its expanding capacity, raising questions about OPEC's production discipline. The country's Energy and Mines minister and Sonatrach CEO Chakib Khelil says Algeria, which has a quota of 782,000 b/d from Feb. 1 (up from 735,000 b/d last month), and the other OPEC members now are producing above their official limits to make up for supply shortfalls from Venezuela. Nigeria is also demanding a higher quota from OPEC, with its capacity having risen to 2.7m b/d and to reach 3m b/d by 2005, compared with a quota of 2.018m b/d.
Algerian exports of high quality oils, condensates and refined products will be rising steadily. A continuous increase in the export of natural gas, by huge pipelines to Europe and in LNG form, will accelerate in the coming years with a two more pipelines to Europe to be built (see Part 3).
Sonatrach is investing in market share assets in Europe and the US. To secure additional markets for its oil and gas, it is to invest in other areas (see Part 4). The green light for all this was given in 1997 by the National Council of Energy (CNE), the top decision maker for the petroleum sector. The CNE is chaired by President Abdel Aziz Bouteflika, a pragmatic ruler surrounded by similar figures (see who's who in DT and Gas Market Trends No. 8).
Those parts of Algeria where foreign oil companies operate are safe. The other parts are in civil war (see background in Vol. 52, Nos. 5-8).
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|Publication:||APS Review Oil Market Trends|
|Date:||Feb 3, 2003|
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