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Algeria Plans Oil and Gas Bidding Round by Q3 2015

Source: Reuters 12/10/2014, Location: Africa

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Algeria will open a new round of bidding for investment in its oil and gas fields by the third quarter of 2015 and may improve the terms for companies, the head of state energy company Sonatrach said.

Sonatrach's interim chief, Said Sahnoun, said Algeria was considering improving terms to attract more interest after the last round in September awarded just four out of 31 blocks on offer.

"The contract terms were fair, so we are talking to all the operators and trying to understand why the turn (out) was not what we were expecting," he said in an interview on the sidelines of an investment conference in London.

He said the energy ministry was looking into how to attract more investment from major international oil companies, in particular the contractual framework of deals, rather than the legal terms.

"The contract terms are being examined by the authorities. We are hopeful that we can have another bid round some time in Q3 of 2015. It's very likely that this is the case," he said.

Sahnoun also said the Amenas plant, which produced about 11.5 percent of Algeria's gas before an attack by Islamist militants nearly two years ago, would be back to full production by the second quarter of 2015.

He gave details on when production would start at some of the six gas fields that are being developed over the next three years.

Touat in the south-west is due to produce 4.6 billion cubic metres (bcm) per year, and production is expected to start in the fourth quarter of 2016, he said.

The Timimoun field, which Sonatrach will operate along with Total and Cepsa, will produce 1.5 bcm and is also due in the fourth quarter of 2016.

Reggane North, which includes Repsol, will produce 2.8 bcm, and will start production in the second quarter of 2017.

Tinrhert is due to produce 7 bcm and come on stream in the fourth quarter of 2017.

He said that production increases from these new projects and others would outstrip the decreases from the maturing of existing fields, with overall output exceeding current levels by 2018.

"We'll not only compensate for the decline, but we'll be producing more," he said.

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Related Articles: Accounting, Statistics  Acquisitions and Divestitures  Asset Portfolio Management  Economics/Financial Analysis  General  Insurance  Investment  Mergers and Acquisitions  Risk Management 


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