TUNISIA - The Energy Base.

With this country's domestic market having shifted from oil to natural gas at a rapid pace, the share of gas in Tunisia energy mix now is over 42%. Tunisia's energy base has grown in pace with its high GDP growth rates in recent years.

Despite being relatively poor in oil resources, Tunisia is a rare success story among the non-oil countries of the Arab World. It has a thriving and well-managed economy, a fairly stable but far from ideal political environment and reasonable good prospects linked to its 1995 association agreement with the European Union, the first such accord between the EU and a North African country.

Tunisia has been export-minded for more than 3,000 years, thanks to its 1,300 kilometre coastline. Its liberal approach is rooted in its Phoenician history. Equality between the sexes began with Queen Dido of Tyre (southern part of Lebanon) who came to this part of north Africa in 814 BC and founded the city-state of Carthage. The country's reforming economy is growing rapidly, with GDP having risen by more than 5% per annum in recent years and officially budgeted to grow by 4.9% in 2002.

Tunisia is well placed to enhance its long-term energy self-sufficiency as there is a potential for new gas discoveries. One important discovery made in 1996, Hasdrubal, contains a large reserve of high quality gas (see Oil & Gas Market Trends of this week). Gas from Algeria to Europe is piped through Tunisian territory and via the undersea TransMed pipeline to Italy, which has a capacity of nearly 25 BCM/year. Tunisia gets more than 1m t/y of Algerian gas as a transit fee.

The contribution of the Tunisian energy sector to the country's gross domestic product (GDP) is almost 10%, compared to the 14% share of agriculture. Gas production at the Miskar field has been raised by British Gas International (BGIT), which brought the field on stream in May 1995 (see Tunisia's oil & gas fields in OMT & Gas Market Trends No. 18).

The energy sector accounts for more than 86% of total foreign investment in the country, compared to just over 50% in 1996 and 84% in 1998. The investment was made mainly in hydrocarbons exploration and development, with British Gas being the biggest foreign investor in Tunisia.