Highly Dependent on Oil Revenues

Algeria, recently in the news because of a terrorist attack, is one of Africa’s leading oil and gas producing countries.
This article appeared in Vol. 10, No. 1 - 2013


The In Amenas gas compression plant in Algeria started operations in 2006. About 35 Bcf (9 Bcm) of gas are being produced per year from Ordovician sedimentary rocks in the Illizi Basin. BP, Statoil and Sonatrach have a joint operatorship of the field. Source: Kjetil Alsvik, Statoil Algeria, with a current population of 36 million, has been an oil producing country since 1958. This was made possible by two commercial discoveries in 1956, Edjelleh and Hassi Messaoud, the latter being Algeria’s largest oilfield, producing more than 400,000 bopd. The main areas of exploration for oil and gas are in the east, on the border of Tunisia and Libya, and the central area – where large gas discoveries have been made.

Algeria’s production in 2011 was 1.7 MMbo and 7.5 Bcfg per day and the country consumed an average of 345 Mbpd in the same year.

Although Algeria is one of the major oil and gas producing countries of Africa, it is still considered to be relatively under-explored. Oil reserves totalled 12 Bbo at the end of 2011, according to the BP Statistical Review of World Energy, while gas reserves reached 159 Tcf (4.5 Tcm). With respect to oil reserves, Algeria ranks as fourth in Africa, behind Libya (47 Bbo), Sudan and Angola. With respect to gas, it ranks second, with Nigeria in the lead.

The country achieved political independence in 1962 after more than a century of colonial rule by France. Algeria’s struggle for independence is said to be one of the most bitter in Africa’s colonial history.

Algeria has experienced a significant economic upturn in recent years, in large part aided by strong oil and natural gas export revenues. The hydrocarbons sector is thus the backbone of the economy, accounting for roughly 60% of budget revenues, 30% of the gross domestic product, and more than 95% of export earnings. The country’s other natural resources come from the mining industry and include iron ore, phosphates, uranium and lead.

According to BP, In Amenas is one of the largest wet gas projects in the country and involves the development and production of natural gas and gas liquids from wet gas fields in the Illizi Basin of south-eastern Algeria. It is a gas and condensate development project centred on four fields located in eastern Algeria some 1,200 km from the coast towards the Libyan border. The project came on stream in 2006.

The Algerian national oil company is Sonatrach (Entreprise Nationale Sonatrach) and it plays a key role in both upstream and downstream oil and gas industries. It is responsible for exploration and production, transport, refining, processing, marketing and distribution. Through its subsidiaries, the company has a domestic monopoly on oil production, refining and transportation.


Related Articles