AGI – Algeria launched a new licensing round for the exploitation of gas resources, with the aim of increasing production by approximately 20 billion m3 per year over the next five to ten years. This significant increase, which represents 40% of the North African country’s current gas exports, could strengthen Algeria’s position as a gas supplier to Europeespecially after the drop in Russian gas supplies hit the continent in 2022.
In an interview given to Argus Media during theAfrica Energy Week in Cape Town (South Africa), Mourad Beldjehemdirector of the upstream sector regulatory authority (ALNAFT), explained that this figure represents a preliminary estimate and that the first quantities of gas could be put on the market within two years. “These potential volumes represent a significant opportunity for Algeria to increase its share in the European gas market,” said Mr. Beldjehem, adding that the Algerian gas is mainly transported to Europe via subsea gas pipelines and LNG vessels.
The new licensing round focuses on onshore gas resources. Of the six blocks up for tender, five already contain gas discoveries, while one includes a producing oil field that could benefit from the application of advanced oil recovery techniques raw. “Today, most international oil companies do not want to invest exclusively in exploration. This is why we offer six opportunities that combine exploration, development and exploitation,” explained Beldjehem.
The objective of this cycle seems to be toensure a rapid return on investment for international companies and, at the same time, encourage the continuation of exploration activities. “We need new discoveries to replace our reserves,” added Mr. Beldjehem, stressing that at present only the state-owned company Sonatrach is actively engaged in exploration in the country.
The Algerian government hopes that the current phase of the program will attract major international players. According to Alnaft, the tender “Algeria Bid Round 2024” attracted keen interest from industry executives and experts, confirming thegrowing attractiveness of investment opportunities in Algeria.
All information about the blocks will be accessible to interested companies from November 26. An important incentive for foreign companies is the improvements in contract conditions introduced by the new Hydrocarbons Law of 2021, which made conditions more competitive for investors compared to the previous cycle in 2014, which had poor results.
According to two executives of Western oil companies interviewed by “Argus”, this regulatory review has sparked renewed interest in the Algerian market, and many companies are carefully evaluating the available opportunities.
Algeria is currently carrying out bilateral negotiations with several foreign companies with a view to signing 13 contractsfour of which could be finalized by the end of the year, added Mr. Beldjehem. Regarding the interest of American giants such as ExxonMobil and Chevron in the Algerian market, Mr Beldjehem said discussions had reached a “commercial stage”.
