Sonatrach, the largest oil and gas Company in Algeria, has approved a $100-billion investment in the country to increase oil and gas output between 2014 and 2018. Sonatrach will also begin shale gas production by 2020. An OPEC member country and major gas supplier to Europe, Algeria has been struggling to raise energy output, on which it relies heavily for state funds to finance development and social programmes. Production of oil and gas has slowed since 2010, due to fall in exploration activity and lack of investment of foreign investment.
$42-billion has been allocated to develop oil and gas fields, which includes $22-billion for natural gas development. Sonatrach officials have reported that the company plans to start production at 6 gas fields, with a collective capacity of 74-million cubic metres daily over the next 3 years. The bidding process for a 31 fields on offer, in a new oil and gas round will begin in September. Included in the bidding process, are blocks for unconventional resources with tax incentives for foreign countries looking to invest in shale gas and oil.
Algeria’s energy officials are hopeful that the country’s shale gas potential is significant and that the expected initial output of approximately 30 billion cubic metres annually, will come to fruition with Sonatrach beginning production in 2020.
Sonatrach approves $100-billion to increase oil and gas production
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