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Algeria says to boost oil and gas exploration
OPEC member has had no world-class discoveries in years.
October 1, 2010 8:59 by Reuters
OPEC member Algeria plans to double its oil and gas exploration efforts within the next three years, the state energy company said on Thursday, signalling a possible shift in strategy.
Algeria, which supplies about a fifth of Europe’s gas needs and is the world’s eighth-biggest oil exporter, has been focussed on increasing production from existing fields but has not discovered any world-class deposits in years.
“In the next two to three years, we are going to double exploration efforts,” Sonatrach Chief Executive Nourredine Cherouati said at a presentation of a new licensing round for oil and gas acreage.
He did not give details, however, on how Algeria would achieve that target or how it would revive lacklustre interest from international firms in acquiring its energy prospects.
In the previous two bid rounds, most of the acreage on offer went unclaimed. Some foreign executives said the prospects were not attractive enough and the financial terms were too tough.
Since then, there has been a shake-up of Algeria’s state energy structure, with Cherouati taking over at Sonatrach in May and Youcef Yousfi being named the same month to take over from veteran energy minister Chakib Khelil.
Yousfi also suggested there would be a change of emphasis. “Boosting exploration efforts is among our priorities,” he said at the bid round presentation.
One foreign oil executive said the new energy team had not had enough time to make any substantial changes to the terms of the licensing round, which it inherited from its predecessors.
“It’s the same … Maybe some people will be interested in one or two things,” said the executive, who was speaking on condition of anonymity
Ten contract areas are on offer in the licensing round, with the winning bidders to be announced on March 3 next year. Yousfi said 80 companies had pre-qualified for the bid round.
Algerian energy officials say they need foreign know-how and technology to discover and develop many of the country’s deposits, which often have challenging geology.
(Writing by Christian Lowe; Editing by Jane Baird)