Algeria is preparing a new auction for foreign energy firms, an official said, after the North African country awarded four out of 31 oil and gas field blocks last month in the first attempt to lure investors since 2011.
Algerian officials described last month's result as acceptable but analysts said the OPEC member needed to do more to improve conditions and attract more foreign oil operators.
"We are preparing a new bidding round. It will be launched within weeks," Sid Ali Beta, head of hydrocarbons agency ALNAFT which oversaw the bidding, told reporters at the signing of contracts with the winners of the Sept. 30 auction.
He gave no details.
One of the winners, Italy's Enel, plans to invest $700 million at its four oil and gas blocks in Algeria in the next 5-6 years, Ruggero Arico, the company's head of external relations for Algeria, said at the signing ceremony.
The Italian utility's consortium with Dragon Oil won two new blocks, adding to two already existing ones.
Beta said the first phase of operations at the four blocks will include drilling around 11 wells at an estimated cost of $150 million.
Spain's Repsol in partnership with Royal Dutch Shell won the Boughezoul area in the north of the country, while Shell and Norway's Statoil won the Timissit area in the east.
"It's a challenge to start this project. We will begin a new phase. We will start working tomorrow," Gabino Lalinde, Repsol's head of affairs unit for Algeria, said at the same event.
SECURITY WORRIES
Algeria supplies a fifth of Europe's gas needs, but it relies on mature fields for most of its energy output and looks to foreign explorers to help develop new reserves and increase flagging production.
Foreign oil executives have in the past complained about Algeria's tough contract terms, often difficult business environment and security worries, especially after a 2013 attack on the Amenas gas plant killed 39 foreign contractors.
Officials were optimistic before last month's bids, having delayed the auction twice after foreign players asked for more time to study the fields. They reported initial interest from 50 companies and cited incentives under a new oil law, improvements in security and the potential of the fields on offer.
An increase in output is vital for a government that relies heavily on energy exports for state income and to pay for social programmes, including food and fuel subsidies that have helped keep it stable amid turbulent times in North Africa.
Analysts say rising domestic energy consumption will also be a concern should Algeria fail to draw the kind of investment required to bolster its production. Oil output last year was 1.2 million barrels per day, about the same as in 2012.
Security has been a concern since the 2013 Amenas attack, which prompted BP and Norway's Statoil to pull workers out. The kidnapping and beheading of a French tourist last month was a reminder of risks in the North African country, which fought a war against Islamist extremists in the 1990s.
Still, Statoil this month said the Amenas plant, which produced 11.5 percent of Algeria's gas output before the attack, was due to return to full production soon after improvements in security.
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