Maintaining the momentum: Algeria research trip key takeaways

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The MENA upstream team recently visited Algeria to meet with operators and key stakeholders in the sector. We arrived during a tumultuous week in which the CEO of the national oil company, Sonatrach, was replaced. Oil production is curtailed by the OPEC+ agreements to less than 1 million b/d but due to declining output from aging fields, Algeria isn’t holding much production back. Sales gas supply has increased markedly since 2021, due to lower volumes being reinjected to support liquids production. Recent increases have come from the development of Southwest Phase 2 gas projects. Algeria continues to prioritise piped gas over LNG exports. Yet, Sonatrach plans to refurbish ageing LNG terminals to maintain capacity. In 2024, we expect more E&P licences will be converted or extended to the new 19-13 Hydrocarbon Law, which provides better terms than the 2005 Law. Widespread bureaucracy will challenge the pace of drilling and ramp-up at developments which have already converted.

Table of contents

    • Back to the White City
    • New developments will increase gas production in 2024
    • Exploration limited and mostly Sonatrach-led; shale gas seen as key post-2030
    • Piped gas will be prioritised ahead of LNG exports
    • More E&P licences to convert to 19-13 terms in 2024
    • Rig market tight and inflation biting but manageable
    • Expect increased upstream activity from incumbents but no wave of new entrants

Tables and charts

This report includes 4 images and tables including:

  • Map of key fields, new developments and export infrastructure
  • Remaining NPV10 (post-tax) per boe and remaining gas resources
  • Gas production by main field, domestic demand and export capacity
  • Capital expenditure committed under the 19-13 Law and expected conversions

What's included

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  • Document

    Maintaining the momentum: Algeria research trip key takeaways

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