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The Algerian authorities have continued to sign new deals in the upstream and downstream sectors while advancing their more controversial agenda of exploiting shale resources despite public opposition. Preparations are building for a policy announcement in December which could open the way to further developments next year. On 7 October, Sonatrach, Total and Repsol completed their agreements to jointly develop the Erg Issouane gas field and market the gas. The field is located on the TFT Sud permit south of the partners’ existing Tin Fouyé Tabenkort (TFT) field.

The Algerian authorities have continued to sign new deals in the upstream and downstream sectors while advancing their more controversial agenda of exploiting shale resources despite public opposition. Preparations are building for a policy announcement in December which could open the way to further developments next year. On 7 October, Sonatrach, Total and Repsol completed their agreements to jointly develop the Erg Issouane gas field and market the gas. The field is located on the TFT Sud permit south of the partners’ existing Tin Fouyé Tabenkort (TFT) field.

The Algerian authorities have continued to sign new deals in the upstream and downstream sectors while advancing their more controversial agenda of exploiting shale resources despite public opposition. Preparations are building for a policy announcement in December which could open the way to further developments next year. 
On 7 October, Sonatrach, Total and Repsol completed their agreements to jointly develop the Erg Issouane gas field and market the gas. The field is located on the TFT Sud permit south of the partners’ existing Tin Fouyé Tabenkort (TFT) field.

Algerian state oil and gas company Sonatrach now has eight vice-presidents – compared with just two (upstream and downstream) when chairman and chief executive (PDG) Abdelmoumen Ould Kaddour took over in 2017. While these changes are important indicators of the more commercial approach of which Kaddour is the champion, the broader organisation has historically proved resistant to reform. Previous PDGs have redrawn the corporate organogram in various ways without achieving any change in underlying performance.

A shake-up in Sonatrach’s senior management has gone beyond the usual shuffling of personnel and directorates which have been the hallmark of previous reforms, indicating that chairman and chief executive Abdelmoumen Ould Kaddour is continuing his attempt to transform the institution.The most important changes reported in Algérie Part, an independent online news site, but not yet publicised on the company’s official website or released by the state-run Algérie Press Service, include the reshaping of the marketing department and the promotion of new divisions dedicated to both business and finance.

Total and Repsol have become the latest international companies to renegotiate an Algerian production concession. On 11 June, they and their partner the national oil and gas company Sonatrach signed new 25-year contract with industry regulator Agence Nationale pour la Valorisation des Ressources en Hydrocarbures (Alnaft) under terms set out in the current version of the hydrocarbons law. Better terms and conditions will not become available until 2019 at the earliest, when amendments to the law are expected to be formally introduced.

Total has signed an agreement with Sonatrach to launch the engineering studies for a petrochemical project in Arzew, in a sign of improving diplomatic and business ties between France and Algeria. The 11 May announcement reflects the improved climate following a series of disputes that have soured relations between Sonatrach and its international partners in recent years. Sonatrach chairman Abdelmoumen Ould Kaddour has adopted a more pragmatic approach since his appointment in March 2017, leading to a resolution of disputes and renegotiation of contracts.

Sonatrach signed a memorandum of understanding with the Iraqi Ministry of Oil on 19 April to examine the potential to develop the Al-Nasiriya oil field. Sonatrach could also provide a range of expertise in the upstream, pipeline construction and downstream infrastructure, according to agreements signed with Sonatrach head Abdelmoumen Ould Kaddour during a visit to Algiers by ministry technical director Dhia Kamar Safar.

Sonatrach chief executive Abdelmoumen Ould Kaddour launched Sonatrach’s long-planned SH2030 transformation strategy in Algiers on 30 April. His headline ambition for the company he joined in March 2017 is to turn it into one of the five largest national oil companies in the world. To achieve this, its total production will have to increase to more than 3m boe/d, rivalling the output of National Iranian Oil Company, China National Petroleum Corporation or Abu Dhabi National Oil Company.

Italy’s Eni has launched an “ambitious exploration and development programme” in the Berkine Basin, which it said would “lead to the production of new gas reserves through the use and optimisation of existing infrastructures”. Chief executive Claudio Descalzi and his Sonatrach counterpart Abdelmoumen Ould Kaddour signed this and other agreements in Algiers on 17 April during an event organised by the Algerian state oil and gas company to promote technical and scientific innovation in the area of energy transition.

Petroceltic International, the formerly Dublin-based and London-listed exploration company, has run into difficulties with the Algerian authorities over a contract approval at its Ain Tsila development, formally scheduled for first gas in 2020. The company had hoped to award an engineering, procurement and construction (EPC) contract to build a gas plant at the site by the end of 2017, but this did not happen and delays are continuing. In early March, two statements on the company’s official Twitter feed blamed national oil and gas company Sonatrach for the hold-up.

Total announced the start of gas production from the Timimoun field in south-western Algeria on 29 March. The production complex with a capacity of around 5mcm/d of natural gas at plateau (around 30,000 boe/d) is jointly operated by Sonatrach (51%), Total (37.75%) and Cepsa (11.25%).“The launch of Timimoun is a new step in the group’s history in Algeria, where we are a long-term partner. Achieved within the planned budget, the project will contribute to Total’s production growth in 2018,” said Total Exploration & Production president Arnaud Breuillac.

Sonatrach signed a memorandum of understanding with BP and Statoil on 26 February on opportunities for cooperation in upstream oil. “The signing of this protocol will also enable Sonatrach, BP and Statoil to consolidate their previous partnership through the search for new cooperation opportunities,” a Sonatrach statement said. Sonatrach is keen to boost investment from both new and existing international oil company partners to ensure the state benefits from the industry upturn.

Sonatrach director-general Abdelmoumen Ould Kaddour on 8 February inaugurated the long-awaited GR5 gas pipeline, which links several major south-western gas fields to the export network. The pipeline will provide capacity to evacuate 8.8bcm/yr of natural gas from the Repsol-operated Reggane Nord, Total-Cepsa-Sonatrach Touat and Engie-operated Timimoun fields. After a period when Algeria’s ability to maintain supplies to European partners – especially Italy – was questioned, Ould Kaddour told journalists: “For now, we can respond to our foreign partners’ needs.”

Sonatrach director-general Abdelmoumen Ould Kaddour regularly tours the hydrocarbons giant’s sprawling empire, rallying workers and telling journalists about Algeria’s return to producing oil and gas on a global scale, after years of corruption scandals and management inertia. On his 8 February visit to Hassi R’Mel, he announced that Sonatrach would invest $56bn in 2018-22. In an interview, he referred to discussions with Total on an unspecified $5bn project. After a long period of tensions with the French major, this is likely to be a major new petrochemicals project, giving further substance to claims Algeria is back as a force in the industry.