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Tuesday, October 03, 2023 1:25 GMT
After a year 2020-2021 weighed down by the drop in hydrocarbon revenues, the Algerian public oil and gas group Sonatrach is regaining its ambition and announces its intention to invest US$40 billion between 2022 and 2026 in exploration, production and refining oil and gas exploration and extraction, its CEO, Toufik Hakkar, told Algerian international television channel AL24 News on January 3. He specified that the “third of these investments” will involve foreign partners. “The largest part will be devoted to exploration and production to preserve our production capacities, as well as projects in refining to meet the national demand for fuel,” he said.Illustration of this change of course, in mid-December, the hydrocarbon giant signed an oil production contract worth US$1.4 billion with the Italian group Eni, as well as a cooperation agreement in the energetic transition. The contract covers a total area of 7,880 km2 in the southern part of the Berkine basin (south), where Sonatrach and Eni have been operating since 2013. This is the first contract between the two partners since the promulgation, in November 2019, of a new law on hydrocarbons introducing sharing of production.Exports on the riseOverall, the news is therefore good for Algeria in terms of hydrocarbons. Thus, the group’s revenues increased by 70% in 2021 thanks to a 19% increase in its hydrocarbon exports. In total, the giant Sonatrach exported for US$34.5 billion in 2021, against US$20 billion in 2020. Toufik Hakkar explained that the average price of a barrel of oil was around US$70 , but “the Sonatrach’s strategy is based on a price of US$50 to avoid any fluctuation in the market ”.The fourth largest economic power on the African continent, the country is particularly exposed to variations in the price of hydrocarbons due to its dependence on oil and gas income, which represents more than 90% of external revenues. The recent rebound in crude has made it possible to reduce the Algerian trade deficit, which contracted “from US$10.504 billion at the end of September 2020 to US$1.571 billion in September 2021”, the Bank of Algeria indicated at the end of December.Significant investments in LibyaIn this interview, the boss of the group also announced the steps taken by Sonatrach “with a view to its return to Libya”, where it suspended most of its activities in 2014. According to the CEO of the oil giant, a delegation from the group is will return there by the end of February in order to prepare with its partner the NOC, the Libyan national company, the “conditions of return in order to secure workers and equipment”. He stressed that the Algerian group had “made significant investments in oil and gas exploration” in Libya and that it was not going to “leave these discoveries without development”. Sonatrach’s 4-year plan foresees, among other things, a refinery at Hassi Messaoud (the largest oil field in Algeria) and an extension of the Skikda refinery (northeast) intended to convert certain derivatives into fuels, added Toufik Hakkar.A turbocharger to supply EuropeAnother announcement: Sonatrach also intends to put into service in January the fourth turbocharger of the Medgaz gas pipeline, which transports Algerian gas to Spain and Portugal. This turbocharger will ensure supplies to the Spanish market in accordance with contractual quantities, estimated at 10.5 billion cubic meters, and meet any requests for additional quantities, added the boss. Algeria has decided to give up, since November 2021, the operation of the Maghreb Europe Gas Pipeline (GME), crossing Morocco, to supply Spain and Portugal.In 2011, Sonatrach announced an investment plan of US$60 billion for the period 2011-2015 in order to strengthen its production capacities. With the collapse of crude oil prices from 2014, the group had however reduced its investments, which were further revised downwards after the outbreak of the Covid-19 pandemic in 2020 and a further fall in oil prices. ‘black gold.