Algeria: 8 new major oil and gas discoveries since January

Algeria: 8 new major oil and gas discoveries since January
Algeria: 8 new major oil and gas discoveries since January

Algerian Energy Minister Mohamed Arkab announced on Wednesday May 29, 2024 that Sonatrach, the national oil company, has made eight major oil and gas discoveries since January.

These discoveries, described as important, were made by Sonatrach alone in entirely new sites located mainly in the regions of Béchar (southwest), In Salah (center of the desert), Illizi, Djanet and ‘Ouargla (south-east).

Impact on national reserves

Mohamed Arkab stressed that these discoveries will significantly contribute to increasing the confirmed national reserves of hydrocarbons, in particular those of natural gas. Although no details were provided on production volumes or estimated reserves, these discoveries are the result of significant investments made by Sonatrach.

Favorable environment for investment

The minister also praised Algeria’s attractive investment climate, specifying that the 2019 hydrocarbons law includes “comprehensive” measures which have already yielded results. Among the significant contracts, we note partnerships with giants such as the Italian Eni, the Norwegian Equinor, and the American Occidental.

Recent agreements with ExxonMobil and Chevron

Last Thursday, ExxonMobil signed a memorandum of understanding with Sonatrach to develop two gas fields. In addition, a contract with Chevron for the development of a major hydrocarbon deposit should be signed in the coming days, according to Arkab.

This memorandum of understanding aims to explore and develop hydrocarbon resources in the Ahnet and Gourara basins.

Gas production strategy

Last Monday, Arkab said that Sonatrach’s first strategy is to increase production to reach 200 billion cubic meters of gas per year within five years. In 2023, Algeria’s natural gas production was approximately 137 billion cubic meters.

The increase in domestic consumption, which reached 50 billion cubic meters in 2023, and the increase in exports, with 56 billion cubic meters following the Russo-Ukrainian war, are putting additional pressure on production.

Infrastructure and exports

Algeria supplies Europe with gas via two main pipelines: the Transmed, which connects Algeria to Italy via the Tunisia with a capacity of 32 billion cubic meters per year, and Medgaz, which connects Béni Saf on the Algerian west coast to Almería in Spain with an annual capacity of 10 billion cubic meters.

Current projects

Last Thursday, Sonatrach signed a contract with Italian and American companies to build three gas processing plants to increase production from the Hassi R’Mel field, the largest in the country.

This project aims to maintain a daily production of 188 million standard cubic meters.

So, Sonatrach’s new discoveries and recent development agreements illustrate the growing dynamics of the Algerian energy sector. By strengthening its international partnerships and increasing its production capacities, Algeria is positioning itself to meet the growing demand for hydrocarbons while consolidating its position as a key supplier for Europe.

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