Algeria to spend $50bn to boost oil and gas operations
Algeria’s state-run oil producer plans to boost crude output by 14 per cent in the four years to 2019 and invest billions of dollars in exploration.
Sonatrach Group expects to spend Us$9 billion from 2017 to 2021 in its search for new deposits of oil and natural gas, said Farid Djettou, the head of the company’s associations division, which is responsible for foreign contracts. It will drill an average of 100 wells a year during that time and invest more than US$50 billion across all its operations, Mr Djettou said.
Algeria is Africa’s biggest gas producer and a member of Opec, and Sonatrach’s exports generate more than half of the government’s budget revenue. Yet the country’s oil output has declined since August 2008 as foreign investment sagged, and its monthly production of 1.04 million barrels a day so far this year is the lowest since 2002, according to data compiled by Bloomberg.
With revenue falling, the state has taken another look at how the country’s energy industry is run. On Thursday the government appointed Hocini Arezki as the new acting head of the energy regulator, Alnaft. Just three days earlier it installed a new chief executive at Sonatrach, dismissing the incumbent after less than two years and bringing in the company’s sixth leader since 2010.
Sonatrach’s annual production will exceed 230 million tonnes of oil equivalent by 2021, with foreign companies increasing their yearly output by 10 million tons, Mr Djettou said.
Algeria was instrumental in crafting Opec’s historic deal to curb oil production last year, and the planned increase in Sonatrach’s output could complicate efforts to reduce a global glut.
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Updated: March 23, 2017 04:00 AM