Algeria’s Sonatrach to boost output 20% with new projects

By Salah Slimani on 12/25/2016

ALGIERS (Bloomberg) -- Algeria’s state energy producer Sonatrach Group plans to increase output of natural gas and crude oil by 20% in the next four years as new projects start up, Salah Mekmouche, the company’s V.P. of exploration and production, said.

Sonatrach will bring on stream Tiguentourine, In Salah and Timimoune natural gas projects, as well as oil wells of the Berkine basin, after spending $9 billion a year on exploration and development projects since 2015, Mekmouche said in an interview at the company’s Rhourde Nouss gas field southeast of Algiers. Sonatrach also plans to increase production from old oil wells in Hassi Messaoud, he said.

Sonatrach plans to “invest as little as possible and produce as much as possible,” Mekmouche said.

Algeria is Africa’s biggest natural-gas producer and a member of the Organization of Petroleum Exporting Countries. Its crude production increased to 1.16 MMbpd in November, the highest since 2013, after three years of declines and no change in 2015, according to data compiled by Bloomberg.

The nation hosted OPEC members meeting in November when they agreed to the outline of a deal to cut production for the first time in eight years. Brent crude has rallied 48% this year as OPEC will cut output as of Jan. 1 amid a global glut.

Sonatrach will produce 69 million tons of oil equivalent this year, up from 67 million tons last year, according to company data. Gas output will increase to 132.2 Bcm from 128.3 Bcm in 2015, the data show.

Sonatrach plans to drill 290 wells in 2017, up from 253 wells in 2016, according to Khelil Kartobi, head of Sonatrach’s drilling division. Of the 290 wells next year, 100 will be for exploration, he said. The company has 100 drilling rigs and another 19 are owned by foreign companies.

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