OIL AND GAS-HYDROCARBONS
Algeria’s proven reserves are primarily located in the eastern half of the country. The Hassi Messaoud basin contains 70 percent of the country’s total proven reserves, while additional reserves are located in Berkine basin.
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However, existing upstream and midstream infrastructure is aging and inadequate to meet Algeria‘s near-term production goals. New investments are expected in these areas, particularly as two new undersea gas pipelines to Europe are constructed.
According to the 2010 BP Statistical Energy Survey, Algeria had proved oil reserves of 12.2 billion barrels at the end of 2009 or 0.91 % of the world's reserves.
Algeria produced an average of 1810.8 thousand barrels of crude oil per day in 2009, 2.03% of the world total and a change of -9.1 % compared to 2008. The downstream opportunities remain limited, due largely to consumer-level fuel price caps, but changes to the law in 2008 broke the state monopoly on the delivery of refined products.
In 2007, Algeria’s real gross domestic product (GDP) growth rate was 4.8%. Oil and natural gas exports, which made up 98% of Algerian exports (by value) in 2006.
In March 2005, the Algerian parliament adopted the hydrocarbon reform bill. The bill encouraged international oil company (IOC) investment throughout the hydrocarbon industry, which state-owned Sonatrach previously dominated. The proposed new law established a royalty and tax regime to replace the existing production sharing agreements in new exploration bid rounds.
During 2004, Algeria held its fifth licensing round for foreign development of oil and natural gas reserves. Exploration rights were awarded to: Amerada Hess (U.S.), BHP-Billiton (Australia), CNPC (China), Petroceltic (Ireland), Repsol-YPF (Spain), Sinopec (China), and Statoil (Norway).
By law,Sonatrach, must hold a 51% shareholder position in all oil and gas projects. Tenders for investments and for project contracts may be offered competitively or by invitation.
Approximately 90% of Algeria's crude oil exports go to Western Europe, with Italy as the main receipient followed by Germany and France. Algerian oilfields produce high quality light crude oils with very low sulphur and mineral contents is among the highest quality in the world, and European countries have relied upon Algerian oil to help meet increasing stringent EU regulations on sulfur content of gasoline and diesel fuel.
Algeria uses seven coastal terminals for the export crude oil, refined products, liquefied petroleum gas (LPG) and natural gas liquids (NGL). There are facilities located at Arzew (Algeria's largest crude oil export port), Skikda (Algeria's second largest crude oil export port), Algiers, Annaba, Oran, Bejaia, and La Skhirra in Tunisia. Arzew handles about 40% of Algeria's total hydrocarbon exports, including all of its NGL, LPG, and oil condensate exports.
Algeria operates one crude oil pipeline connection to a foreign country. The 160-mile, 304,000- bbl/d OT1 pipeline connects the In Amenas oil field in the southeastern part of the country to the export terminal in La Skhira, Tunisia.
According to Oil and Gas Journal (OGJ), Algeria had 161.7 trillion cubic feet (Tcf) of proven natural gas reserves (the eighth-largest in the world) as of January 2007.
Algeria’s largest gas field is the super-giant Hassi R’Mel, discovered in 1956 and holding proven reserves of about 85 Tcf. Hassi R’Mel accounts for about a quarter of Algeria’s total dry natural gas production.
Opportunities
• Sonatrach is presently working on a $63-billion 2009-2013 investment plan. The lion‘s share is aimed at developing the Algerian petrochemical industry. The other major areas of investment include upstream exploration and development, hydrocarbons transportation facilities programs, and hygiene, safety, and environment protection.
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