Algeria to spend $64bn on upstream projects
Spend accounts for 70% of total investment program from 2015 to 2018
Algeria's state-owned Sonatrach has announced plans to spend $64bn in upstream activities over the next three years to reverse the decline in crude oil and natural gas production in the country, accoridng to the U.S. Eenergy Information Administration.
The spend accounts for 70% of its total investment program from 2015 to 2018. Sonatrach has set a target to increase gross hydrocarbon output from 1,429mn barrels of oil equivalent (boe) in 2014 to 1,649mn boe by 2019 (from 535 to 616mn boe of oil and from 894mn to 1,034mn barrels of natural gas), the EIA said.
Algeria is the third-largest oil producer in Africa, after Nigeria and Angola, and the largest natural gas producer in Africa. However, production of both oil and natural gas has declined over the past decade.
Declining production has led the Algerian government to amend the law on foreign investment in its oil and gas sector in an attempt to attract the investment and technology improvements needed to help stop production declines.
In 2014, the national oil and gas company offered 33 blocks with high shale gas and oil potential and signed five contracts with Repsol, Shell, Statoil, and Dragon Oil-Enel.
By law, Sonatrach takes a mandatory majority share (at least 51%) of any resulting projects.
In May last year, the Algerian Council of Ministers gave formal approval for foreign partners to join Sonatrach in the exploration and development of shale gas resources.
Algeria has large proved crude oil and natural gas reserves and abundant resources that are already connected to world markets through an extensive natural gas pipeline network.
Proved crude oil reserves totaled 12.2bn barrels in 2014, with an additional 9.8bn barrels of undiscovered oil and natural gas liquids (NGL) resources estimated by the US Geological Survey (USGS), and close to 6bn barrels of technically recoverable shale oil resources estimated by the EIA and Advanced Resources International (ARI).
Proved natural gas reserves totaled 159 trillion cubic feet (Tcf) in 2014, with an additional 49 Tcf of undiscovered natural gas resources estimated by USGS and more than 700 Tcf of technically recoverable shale gas resources estimated by EIA/ARI.