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As one of the three major hydrocarbon producers of North Africa, Algeria merits serious consideration from foreign investors. Its proximity to Europe and the high quality of its crude oil guarantee a ready market for its full range of petroleum products. However, there are considerable political and economic problems, and in the short term, the economic and operating environment of the country will be unstable.
Since the first discoveries of oil and gas in the mid-1950ís, Algeria has been viewed by foreign investors as a prime exploration target. Opportunities became less accessible after 1971, when foreign operators were partially nationalized, and Sonatrach became the dominant presence in both the upstream and downstream petroleum sectors. However, since 1986, when Algeria reformed its Petroleum Law to allow greater foreign participation in exploration, companies such as Anadarko, BHP, Cepsa, LL & E, Petro-Canada, Mobil, AGIP, Arco and Encor (Talisman) have negotiated exploration and development projects. In several areas, there have been some noteworthy initial successes.
Of the 13 sedimentary basins in Algeria, four are presently (1994) producing: the Triassic Basin, comprising the Oued Mya Basin, Hassi Messaoud Ridge, Tilrhmet Dome, Touggourt Saddle, and Dahar Dome; and the Illizi, Ghadames and Constantine basins. Four will be producers when the connecting gas pipeline is completed (Ahnet, Timimoun, Reggane and Sbaa - north Reggane basins), two are former producers, and three are almost virtually unexplored.
Currently, hydrocarbon production in Algeria comes primarily from the Triassic and Illizi basins, with small amounts of oil from the Ghadames and Constantine basins. The distribution split of the countryís reserves is similar, with the Triassic Basin hosting about 80% of the recoverable reserves, the Illizi Basin about 15%, and the Ghadames Basin about 5%. Sufficient gas reserves have been proven in the Western Province to justify building a pipeline to Hassi RíMel. Once this is in operation, there is little doubt that exploration in these areas will increase and additional reserves will be found. Sufficient exploration has taken place in the Western Province and the less explored parts of the Eastern Province to suggest that more supergiant fields like Hassi RíMel (70 TCF gas) and Hassi Messaoud (9 billion barrels oil) are unlikely to be found.
However, exploration successes by Anadarko, AGIP and Petro-Canada in the Ghadames and Illizi basins indicate that considerable additional reserves remain to be discovered in the Paleozoic basins of the Saharan Platform. In the early 1990ís, Anadarko alone reported discovery of more than one billion barrels of recoverable oil.
In most of the basins of the Eastern Province, hydrocarbon generation took place in the late Mesozoic and Tertiary, after formation of all the significant traps. Thus, updip migration is likely to have filled all structures around the flanks of basins and on ridges. The lightly-explored western part of the Oued Mya Depression, the Dahar Dome, and all of the Ghadames Basin, where the Devonian and Triassic reservoir sandstones are at reasonable drilling depths, should be regarded as prospective.
By the end of 1993, Algeria had produced just over 10 billion barrels of oil and 25 TCF of gas. Based on reserves of 10.1 billion barrels, and an average production rate of 750,000 BOPD, Algeria has a reserves life for oil of 33 years. With reserves of 130 TCF of gas and annual production of 4 TCF the corresponding reserves life for natural gas is also 33 years.
Principal export markets for Algerian crude oil and refined products are Italy, France and Spain. These countries, along with Belgium and West Germany, are also the main markets for Algerian LNG. Algeria also moves large volumes of gas directly to export markets in Italy by the Trans-Mediterranean pipeline, which commenced operation in 1982. A second export pipeline to Spain and Portugal via Morocco and the Strait of Gibraltar is under construction. Furthermore, the doubling of capacity of the Trans-Mediterranean Pipeline is underway (as of 1995).
For more information contact:
Petrel Robertson Consulting Ltd.
500, 736- 8th Avenue S.W.
Phone: (403) 218-1618
Fax: (403) 262-9135
This summary, part of Petrel Robertsonís 1995 summary of exploration and development opportunities in 31 countries around the world, has not been updated. Some of the information, particularly relating to political and economic issues, is thus out of date. It is included, however, to demonstrate the breadth and depth of Petrelís work in each of these nations.