Oil and Gas industry in Algeria: an overview
The oil and gas sector is the backbone of the Algerian economy accounting for about 35% of the gross domestic product and two- thirds of total exportation.
Algeria has large shale gas reserves, thanks to which it is positioned as one of the first producers in the world. After Russia, it is the main supplier of gas in Europe and the first supplier on the African continent.
OPEC member since 1969, 80% of hydrocarbon production is managed by the local company Sonatrach, one of the largest energy players in the world. The remaining 20% is managed by several foreign oil companies including British Petroleum, Eni, Total, Repsol, Cepsa, Statoil and, Anadarko.
Despite the highly promising figures, in recent years statistics have instead shown a decline in foreign investments due to several reasons. Amongst the most important: a corruption scandal, security issues, Algeria’s current hydrocarbon law and its fiscal terms to partnering with international oil companies, low oil prices and, operational challenges.
According to a Bloomberg report of March 22, Sonatrach has focused on an investment of over 50 billion dollars in the period 2017-2021 in all its activities in order to increase production. Algeria’s national oil and gas producer tried to increase production after a prolonged period of inactivity due to the slowdown in foreign investment.
Sonatrach aims to increase oil production by 14% in 2016-19, thanks to an investment of $9 billion to explore new upstream projects. Among the operational maneuvers, the company has also signed or extended collaborations with foreign energy firms such as Pertamina in Indonesia, Spanish Spain Compañía Española de Petróleos SAU (CEPSA) and Italian Eni SpA with the aim of increasing production.
The current Algerian legislation on hydrocarbons and its fiscal conditions have become an obstacle to collaboration with international oil companies. Attempts to revise the Algerian government will begin with a bill in June 2018. The Algerian Ministry of Energy also plans to invest $78 billion in upstream activities by 2021.
Trace Software International, aware of the enormous potential of Algeria, sells its software solutions for the segment of hydrocarbons and gas. For example elecworks™ P&ID is a dedicated software to create industrial process design diagrams (“Piping and Instrumentation Diagram”, P&ID) and fluid circulation plans (“Process Flow Diagram” PFD).
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