Global Energy Review

North Africa: the Prospects for Oil and Gas

A Report by Dr Paul McDonald
Consulting Editor, Oil and Energy Trends

Contents

List of Tables

Introduction

Growing concern in Western Europe about energy security has led to increasing European interest in the oil and gas reserves of Algeria and Libya. Interest in the latter has been all the greater following the recent rapprochement between the US and Libya. The return of American companies to the Libyan upstream could provide an important stimulus to the country's production prospects. Algeria is attracting considerable European interest as the security situation there slowly improves. In May 2003, the European Union (EU) began a series of discussions about energy cooperation between the EU and North Africa under a programme known as the Euro-Mediterranean Partnership (EMP), also known as the Barcelona Process.

Algeria and Libya are important suppliers of oil, liquefied petroleum gas and condensate to Western Europe. In addition, they are growing suppliers of natural gas. There is considerable interest in increasing the gas trade with the EU, which will require the building of new pipelines under the Mediterranean. The EMP appears to envisage some kind of integrated gas market in the Mediterranean, though this concept still has a long way to go before it can be realized.

This report deals primarily with the prospects for the production of oil, gas and gas liquids in Algeria and Libya and the outlook for energy exports from these two countries over the coming decade. Other sections cover the much smaller hydrocarbon prospects of Morocco and Tunisia.

Whilst Algeria and Libya will continue to export mainly to Western Europe, they will also be small, but important suppliers to other parts of the world, notably Asia and North America. As Asian countries reduce the sulphur content of their liquid fuels, they will have a growing interest in North Africa as a supplier of light, sweet crudes. Similarly, North America, which has traditionally relied on its own production and that of the North Sea for supplies of sweet crude, will increasingly have to look towards areas like North Africa for light, sweet crudes now that its traditional sources are in decline.

Algeria and Libya may also become increasing providers of gas in the form of liquefied natural gas to both Asia and North America. There is likely to be a ready market for all the hydrocarbons these two countries can produce, provided they can develop the necessary marketing infrastructure. This, rather than a shortage of resources, may well be the principal constraint on the gas industries of the two countries.

   

Algeria and Libya: the Resource Base

Algeria and Libya between them have proven oil reserves of 47 bn bbl, representing just over 4% of the world's total (see Table 1), whilst their combined production of 3.4 mn bpd represents a similar proportion of global output of crude oil and natural gas liquids (NGLs).

Their endowment of natural gas is of a similar size in world terms. Combined proven reserves of 206 trillion cf (tcf) are the equivalent of more than 3% of the global total, and production from the two countries accounts for a similar share, at 8.6 bn cfd.

Table 1
Algeria and Libya: Reserves & Production, 2003
Total Share of World Total
Algeria
OIL
Proven Reserves (end-2003) 11.3 bn bbl 1.0%
Production (2003) 1.86 mn bpd 2.1%
NATURAL GAS
Proven Reserves (end-2003) 159.7 tcf 2.6%
Production (2003) 8.0 bn cfd 3.2%
Libya
OIL
Proven Reserves (end-2003) 36.0 bn bbl 3.1%
Production (2003) 1.49 mn bpd 1.9%
NATURAL GAS
Proven Reserves (end-2003) 46.4 tcf 0.7%
Production (2003) 0.6 bn cfd 0.2%
Algeria and Libya
OIL
Proven Reserves (end-2003) 47.3 bn bbl 4.1%
Production (2003) 3.35 mn bpd 4.0%
NATURAL GAS
Proven Reserves (end-2003) 206.1 tcf 3.3%
Production (2003) 8.6 bn cfd 3.4%
Source: BP Statistical Review of World Energy 2004; Oil & Gas Journal; OPEC; Cedigaz.

Their importance in world trade is, in the case of gas, somewhat greater. Whilst their combined exports of oil amount to about 4% of the world oil trade, their gas exports represent 10% of the annual trade in natural gas (see Table 2).

Table 2
Algeria and Libya: Oil & Gas Trade, 2003
Total Share of World Consumption
Algeria
OIL
Crude Oil Exports 0.88 mn bpd 1.9%
Refined Product Exports 0.43 mn bpd 2.0%
Total 1.31 mn bpd 1.9%
NATURAL GAS
Pipeline Exports 3.2 bn cfd 7.3%
LNG Exports 2.7 bn cfd 16.6%
Total 5.9 bn cfd 9.9%
Libya
OIL
Crude Oil Exports 1.04 mn bpd 2.2%
Refined Product Exports 0.25 mn bpd 1.2%
Total 1.29 mn bpd 1.9%
NATURAL GAS
Pipeline Exports - -
LNG Exports 0.1 bn cfd 0.4%
Total 0.1 bn cfd 0.1%
Algeria and Libya
OIL
Crude Oil Exports 1.93 mn bpd 4.1%
Refined Product Exports 0.68 mn bpd 3.2%
Total 2.61 mn bpd 3.8%
NATURAL GAS
Pipeline Exports 3.2 bn cfd 7.3%
LNG Exports 2.8 bn cfd 17.0%
Total 6.0 bn cfd 10.0%
NB: Totals rounded. Figures are for gross exports.
Source: (OIL) World Oil Trade; Blackwell Publishing, 2004; Tables 4 and 6.
&nsbp;&nsbp;&nsbp;(NATURAL GAS) BP Statistical Review of World Energy 2004; Cedigaz.

Both countries represent an increasingly important source of light, low sulphur crudes, especially in areas such as Western Europe and the US, where the output of such crudes is declining. Asia is another growing market for their exports as many countries there try to reduce the sulphur content of their fuels. While Asia has some sweet crude production of its own, most of its sweet crudes yield large amounts of low sulphur waxy residue (LSWR), which limits their straight-run yields of the naphtha, kerosine and gasoil required to produce transport fuels.

OET ARCHIVE

'China competes for crude supplies' Focus, Oct04

'World's refinery system comes under severe strain' Focus. Sep04

'SE Asia set to profit from rising Asian demand' Focus, Jul04

'Chinese demand attracts exports' Focus, Feb04

Falling output of natural gas in the US and Western Europe also makes the gas resources of Algeria and Libya of great interest to these regions. Asia, too, has an increasing demand for gas and insufficient local supplies. Algeria currently supplies LNG to the US and South Korea, but exports from both countries are likely to remain overwhelmingly focused on Europe for the foreseeable future.

Algeria and Libya have ambitious plans to increase their production and exports of oil, NGL and natural gas. There seems to be a greater market for their liquids than their gas at present. Algeria's reserve base, on the other hand, seems to suggest that there is a greater future there for the production of gas rather than oil. Libya's gas reserves are relatively undeveloped but they, too, have considerable potential. The outlook for both fuels is explored in greater detail in the sections that follow.

OET ARCHIVE

'EU gas market liberalization threatened by pricing issue' Focus, Nov04

'US looks north (and south) as gas starts to run out' Focus, Aug04

Algeria: Oil and NGL Production

Algeria produces nearly 2.3 mn bpd of oil and gas liquids, of which NGL account for nearly 0.9 mn bpd, or just under 40% of the total. This is the highest ratio of NGL to liquids of any OPEC country. Its crude oil production capacity is at an all-time high of 1.4 mn bpd and output is considerably higher than its OPEC quota from November 2004 of 862,000 bpd.

Reserves, on the other hand, are modest by OPEC standards, as is the reserves:production ratio of 14:1 (see Table 3). The state oil company, Sonatrach, has announced plans to raise the output of all liquids well above 2.5 mn bpd by 2010 and to about 3.0 mn bpd in 2020. NGL will undoubtedly continue to form an important proportion of the total liquids' output. The Ministry of Energy and Mines predicts that output of NGL will reach 2 mn bpd by about 2015.

All this implies the existence of large, undiscovered reserves. There is considerable exploration interest in both oil and gas, which should lead to further discoveries.

Table 3
Algeria: Reserves & Production, 2004
Reserves: 11.3 bn bbl
Reserves remaining: 14 years
Production: 2.4 mn bpd
OPEC Quota (Nov '04) 862,000 bpd
Production Capacity: 2.4 mn bpd
NB: Figures include NGL, except for OPEC quota.
Source: BP Statistical Review of World Energy 2004; Oil & Gas Journal; OPEC; OET (Table 4.4d).

The Reserve Base

Algeria's proven reserves of 11 bn bbl are inadequate to meet planned increases of more than 50% over the next 10 years. The Algerian authorities have indicated that there are 120 bn barrels of oil equivalent (boe) of hydrocarbons in place. This is likely to consist mainly of natural gas. In any case, the estimate is too generalized to be of much value in determining how much oil may yet be discovered. Moreover, the figure fails to indicate how much oil and other liquids could be recovered. Most of Algeria's oil lies inland, under the eastern half of the country, in three main areas: Hassi Messaoud, Berkine and Rhourde el-Baguel. These account for about 85% of the country's proven reserves. Hassi Messaoud, the most northerly of the large fields, alone makes up 65% of Algeria's oil reserves.

Much of the attention in recent years has been on the Berkine Basin. Two large fields have been commissioned there since 2002: the Hassi Berkine field, which has a capacity of 0.3 mn bpd, and the 0.2 mn bpd Ourhoud development. The area is seen as highly prospective and has attracted a great deal of outside interest. Some estimates of recoverable reserves, however, have been revised downwards recently following further drilling. Recently, therefore, attention has begun to focus on the country's largest field complex, Hassi Messaoud, which is also Algeria's oldest producing field, discovered in 1956. The aim is to raise production there from 0.4 mn bpd to 0.7 mn bpd.

Outside estimates of undiscovered reserves suggest a figure in the region of 30 bn bbl for recoverable liquids. About half of this would have to come from existing fields. Such a figure might well be at the top of any range. Set against the optimism of such outside estimates is the fact that there have been very few large discoveries in Algeria since the early 1990s. What Algeria needs is some large new finds.

Production Plans

Exploration and production are carried out by foreign oil companies in conjunction with the state-owned oil and gas company, Sonatrach. On 5th October, 2004, the Ministry of Energy and Mines launched its sixth international licensing round, covering 10 areas in the east of the country. Bids are due by 20th March, 2005. The previous round attracted successful bids from Amerada Hess, BHP Billiton, CNPC, Gas Natural, Petroceltic, Repsol YPF, Sinopec, Statoil and Woodside.

Hyper-links:
Sonatrach and the Rise of Algerian oil
Algeria's oil industry dates from the 1950s, when the country was still under colonial rule from Paris. The French wanted to develop oil provinces that were independent of the major Anglo-American oil companies, the so-called 'Seven Sisters'. The Bureau de Recherches Pétroliers (BRP) co-ordinated exploration across the French Empire. Interest in North Africa was at first concentrated on Morocco, which produced about 2,500 bpd in the early 1950s. Some French geologists declared that there was no oil under the Sahara in Algeria. However, in 1956, the state-owned Régie Autonome des Pétroles (RAP) found oil in the south-east of the country.
The refusal of the United States of America to support France and Great Britain in the Suez venture of 1956 demonstrated to the French the folly-as they saw it-of relying on American oil companies, and speeded-up the development of the Hassi Messaoud field, despite its location deep in the Sahara, hundreds of miles from the coast.
The development of the field was nevertheless complicated by the struggle for Algerian independence, which began in 1954, and soon developed into a bloody armed struggle. Large and well-equipped French armed forces were unable to contain a revolt that included attacks on the police and others seen as part of the colonial administrative structure, and the kidnapping and murder of French residents. A revolt by the army hastened the end of French rule and Algeria became independent in 1962. Under an arrangement known as the Evian Agreement, France attempted to maintain a special relationship with the newly-independent Algerian state under which French companies would control much of Algeria's oil production. Paris particularly wanted to exclude the Seven Sisters and Italy's ENI as far as possible form the upstream sector. Some members of the government expressed the belief that US oil companies had colluded with the Algerian independence movement in an attempt to secure preferential treatment once the war was over.
In a further attempt to shore-up France's position in the Algerian upstream sector, the government combined BRP and RAP in 1965 to form an industrial grouping large enough to challenge the Seven Sisters. The new company was called Enterprise de Recherches et d'Activités Pétrolières (Elf-ERAP). Its activities were initially concentrated in Aquitaine in France and in Algeria; but it soon began to grow into a large international company, adopting the name under which its petrol and lubricants were marketed, Elf.
France was less successful in defending its dominance of the Algerian upstream. The new government sought a greater role for Algerians in the oil industry and, a year after independence, promulgated a decree establishing Sonatrach as the national oil company. At its foundation, Sonatrach was responsible for just over 10% of the country's production. Gradually, however, Sonatrach increased its role through awards of exploration acreage and, more controversially, by the acquisition or full nationalization of French and other foreign operations, starting with many US holdings as a protest against Washington's support for Israel in the Six Day War of 1967. An act of 1971 required all foreign oil producers to enter into an upstream joint-venture with Sonatrach, in which the Algerian company was to be the operator with a 51% share. By the following year, Sonatrach controlled some 77% of Algerian oil production.

In addition to licensing rounds, Algeria is trying to attract further exploration interest with a new hydrocarbons law. There have been proposals for such a law since 1999, but the idea has also attracted a good deal of political opposition. Opponents say the government's bill would weaken Sonatrach and give an increased role to foreign companies. The bill was even withdrawn in 2003 ahead of the presidential election of April 2004. Following re-election of the incumbent, President Abdelaziz Bouteflika, it was announced in October 2004 that the bill would be reintroduced into the legislature. Among the bill's proposals is one covering the establishment of new regulatory bodies to oversee the introduction of fair and free competition in the upstream and downstream sectors, which is likely to undermine the dominant position of the state company, Sonatrach. The government says the new measures will increase national revenues by attracting more foreign oil investment.

Outlook for Production

The government has announced a series of targets for raising production. Crude oil production is supposed to reach 1.5 mn bpd by 2005. Given that Algeria's crude oil production capacity is already close to 1.4 mn bpd, there should be little difficulty in hitting this particular target.

By 2010, Algeria is supposed to be able to produce 2.0 mn bpd of crude oil. Some of the extra output will come from new fields, such as BHP Billiton's 80,000 bpd Rhourd Ouled Djemaa (ROD) development, and some will be provided by the expansion of existing fields, such as Burlington Resources' Menzel Lejmat North (MLN) field, where output is slated to rise from 30,000 bpd to 70,000 bpd. The largest increments, however, are due to come from the Hassi Messaoud field and the Berkine Basin, where Anardarko, Algeria's largest foreign operator, plans to bring four new fields on stream-El Merk; El Merk North and East; and El Kheir El Tesseka-by 2007. The biggest single gain of all, however, is due to come form the country's oldest field, Sonatrach's Hassi Messaoud.

Table 4
Algeria: Planned Output Growth, 2004-10
Company Field Complex New Output Year On-stream
(th bpd)
Sonatrach Hassi Messaoud 300 2010
Anadarko El Merk; El Merk N & E;
El Kheir El Tesseka		 100 2007
BHP Billiton Rourd Ouled Djemaa 80 2004/5
Burlington Menzel Lejmat North I 30 2004
Menzel Lejmat North II 40 2007
First Calgary Ledjmat 40 2007
CNPC Adrar 20 2008
Sinopec Zarzaitine 20 2008
Amerada Hess Gassi El Agreb 10 2004
Source: Company data; Pearl Oil Ltd.

On present plans (see Table 4), Algeria is due to add more than 0.6 mn bpd to its production capacity by about 2010. Some of this total includes NGL. When allowance is made for the decline in production in other fields, Algeria might be left with a crude oil production capacity of about 1.6-1.8 mn bpd by 2010, with a further 1.0 mn bpd of NGL production.

The precise split between crude and NGL will depend to some extent on Algeria's ability to obtain agreement from OPEC for a higher production quota. OPEC's production quotas cover crude oil only. Algeria's quota in late 2004 was 862,000 bpd, compared with crude oil production of around 1.3 mn bpd. Algeria has generally sought not to curtail the output of its foreign producers in order to encourage them to go on investing in the upstream sector. According to OET, Algeria produced some 0.9 mn bpd of NGL in 2003.

LINK TO ANNUAL STATISTICAL REVIEW 2004, TABLE 4.2.

The above forecasts depend on the ability of both Sonatrach and its foreign partners to go on finding oil and to increase recovery levels from existing reservoirs. Large new finds look unlikely and the timetable outlined in Table 4 could slip, though new NGL production could compensate to some extent. The most likely scenario for Algeria's production of all liquids appears to be as follows:

Sonatrach foresees an increase in output beyond 2010, with a possible level for all liquids of 3.1 mn bpd by 2020. This looks over-optimistic unless there are some large new finds.

Algeria: Natural Gas Production

Algeria's principal hydrocarbon reserves consist of natural gas, which accounts for 72% of the country's total reserves (see Table 5). Gas production is also an important source of hydrocarbon liquids (see previous section).

Table 5
Algeria: Oil, Gas and NGL Reserves, 2004
Source Proven Reserves Production
(bn boe) (%)
Natural Gas 28.8 72
Crude Oil 7.4 18
Condensate 2.3 6
LPG 1.5 4
Total 40.1 100
NB: Totals rounded.
Source: Pearl Oil estimate.

The Reserve Base

Algeria's proven gas reserves of 159.7 tcf (see Table 1) are sufficient to last for 55 years at current rates of production. The reserves themselves are equivalent to 3% of global proven reserves. The Hassi R'Mel field, discovered in 1956, was one of the world's largest at the time, with proven reserves of 84.7 tcf. It remains the country's most important gas production complex. More recent finds include Rhourde Nouss with about 13 tcf of proven reserves; Tin Fouye Tabankort (TFT), a venture between Total, Repsol and Sonatrach, which has estimated recoverable reserves of 4 tcf, and the BP, Statoil and Sonatrach In Salah field, which appears to be of a similar size of TFT.

Further exploration is expected to uncover large new reserves. Algerian and some outside estimates suggest that undiscovered reserves of recoverable gas could be roughly equal to the present level of discovered proven reserves.

Production Plans

BP/Statoil's In Salah field was commissioned in July 2004. Output is expected to average 870 mn cfd during 2005. By 2006, BP and Statoil should have a further 870 mn cfd available from their In Amenas field, near the Libyan border. Sonatrach has a further development underway at Gassi Touil, with reserves of 7 tcf and an expected output of 1 bn cfd.

Most of Algeria's gas is destined for export. Overseas sales of 5.9 bn cfd in 2003 (see Table 6) are expected to exceed 8.0 bn cfd by 2010. By 2020, Sonatrach plans to be exporting 11.6 bn cfd.

Table 6
Algeria: Natural Gas Exports, 2003
Destination Total
(bn cfd)
Pipeline
Italy 2.07
Portugal 0.24
Slovenia 0.04
Spain 0.62
Morocco 0.06
Tunisia 0.16
Total 3.20
LNG
Belgium 0.30
France 0.89
Greece 0.05
Italy 0.20
Spain 0.72
Turkey 0.37
South Korea 0.02
United States 0.15
Total 2.71
Total Exports 5.91
NB: Volumes refer to contracted volumes.
   Totals rounded.
Source: BP Statistical Review of World Energy 2004; Cedigaz.

Outlook for Production

Algeria plans to increase production of natural gas in conjunction with a series of major new pipeline developments. These involve the connexion of new fields such as In Salah and In Amenas with the country's main pipeline hub at Hassi R'Mel, and the construction of two new export pipelines under the Mediterranean. The Medgaz line will link Algeria directly with Spain, supplementing an existing pipeline that goes via Morocco. The Medgaz line will make its landfall at Almeria in southern Spain and have an initial capacity of 775 mn cfd. Eventually, the line could connect with others serving Portugal and France. Another new line, the Galsi pipeline, is planned for a later date to connect Algeria with northern Italy and southern France via the islands of Sardinia and Corsica.

Sonatrach's immediate aim is to be producing 9.1 bn cfd by 2005, which looks likely given plans already announced (see above). By 2010, output is scheduled to reach 11.3 bn cfd. There should be adequate reserves to permit this. The key issue is whether the new export outlets and infrastructure can be secured in time. Sonatrach's long term aim is a production level of 16.6 bn cfd by 2020.

Production is forecast as follows:

OET ARCHIVE

'EU gas market liberalization threatened by pricing issue' Focus, Nov04

Hyper-links: (Algeria-Upstream)

Libya: Oil and NGL Production

Libya produces about 1.5 mn bpd of oil and gas liquids, of which NGL accounts for some 60,000 bpd. Production capacity is just over 1.6 mn bpd, which level was achieved in late 2004. Output has fallen considerably since its peak of 3.3 mn bpd, achieved in 1970.

Commercial production of oil dates from 1959. Output rose rapidly over the following 11 years, but the government began to fear that Libya's oil reserves were being depleted too rapidly and moved to change the once highly favourable upstream terms, ending the concession system and raising taxes on foreign companies (see Box). Output began to decline. Libya was further hit by a US trade embargo, starting in 1981, and the complete withdrawal of US oil companies in 1986. From 1992-99, the UN imposed sanctions as well.

Hyper-links: (Details of US Sanctions)

Some European and Asian oil companies continued to produce oil in Libya, but US and UN sanctions restricted access to new upstream technology. Production stagnated and new oil field developments were delayed. The US tried to restrict Libyan oil production further by threatening sanctions against any foreign company that invested more than $20 mn in Libya, under the Iran Libya Sanctions Act (ILSA) of 1996. In the event, no such sanctions were imposed, but ILSA may well have had the effect of discouraging some upstream investors.

The End of Sanctions

US companies were largely responsible for Libya's rise as an oil producer during the 1960s. Political relations between the two countries, however, deteriorated during the following decade and US sanctions followed in 1981 under President Ronald Reagan. Relations reached their nadir in 1988, when the US accused Libya of blowing up a Pan Am airliner over Lockerbie in Scotland. Anxious to end US sanctions so it could expand its oil industry, Libya agreed to pay compensation for its alleged involvement in the bombing of the aeroplane and renounced its intention to acquire weapons of mass destruction. The US began to unwind its system of sanctions as a result and permitted the US companies that were ordered out in 1986 to begin negotiations with Tripoli over their return. US trade sanctions were removed in April 2004 and diplomatic relations were resumed in June of that year.

As a result, Libya announced a major opening-up of its upstream sector. New licensing arrangements were announced to improve incentives for foreign oil and gas investors, and a new licensing round-the first for four years-was launched in August 2004.

OET ARCHIVE

'Libya seeks to capitalize on new mood in Washington' Focus, Apr04

The Reserve Base

Libya's proven oil reserves of 36 bn bbl constitute just over 3% of the world's total. At 2004 rates of production, they are equivalent to around 55 years of production. Output capacity is just over 1.6 mn bpd: some 154,000 bpd above Libya's OPEC quota for late 2004 (see Table 7).

Table 7
Libya: Reserves & Production, 2004
Reserves: 36.0 bn bbl
Reserves remaining: 55 years
Production: 1.5 mn bpd
OPEC Quota (Nov '04) 1,446,000 bpd
Production Capacity: 1.6 mn bpd
NB: Figures include NGL, except for OPEC quota.
Source: BP Statistical Review of World Energy 2004; Oil & Gas Journal; OPEC; OET (Table 4.4d).

Libya's reserves are large and the potential for further discoveries is reasonable, given the lack of exploration activity in recent years. Much of Libya's oil comes from fields discovered in the late 1950s and '60s. Only two large oil fields have been discovered in recent years: the Elephant and Murzuq fields, both in the Murzuq Basin. Their combined proven reserves were initially estimated at 900 mn bbl. Most of Libya's oil production comes from the eastern half of the country, but new areas are being opened-up on the western side.

While the lack of recent exploration suggests the possibility of undiscovered reserves, it is by no means clear how large these might be. Libya's state-owned National Oil Corporation (NOC) estimates its reserve potential at 100 bn bbl. At the other extreme, the US Geological Survey puts the undiscovered oil potential at 3 bn bbl.

Hyper-links: (Reserves & Production)

Production Plans

Oil production peaked at 3.3 mn bpd in 1970. The following year, the government began to nationalize the oil companies operating there and output began to decline until, following the withdrawal of the US oil companies in the mid-1980s, it fell to a post peak low of just over 1.0 mn bpd (see Box). Since then, it has risen only slowly to its end-2004 level of 1.6 mn bpd. Sanctions delayed some fields, including Elephant, and output has only really started to climb significantly since 2003.

Libya now has ambitious plans to increase production. Output capacity is slated to reach 1.7 mn bpd in early 2005 and 2.0 mn bpd in 2010. This is a fairly modest goal given Libya's large reserve levels. Planned additions, however, are mainly in the form of small fields (see Table 8) with the exception of the recently commissioned Elephant field, which will probably be past its peak in 2010, producing about 125,000 bpd at that date. Some of the increased liquids' production will come from a large new gas project in western Libya, which came on stream in October 2004 (see below). The two fields there will produce 47,000 bpd of crude oil and 48,000 bpd at their peak.

Any new production will be offset in part by a decline in output from existing fields. The rate of decline can be slowed down by enhanced oil recovery (EOR), but even with quite extensive EOR, Libya's old fields will go on declining, probably by a total of 100,000 bpd between 2004 and 2010. EOR could nevertheless contribute up to 250,000 bpd to 2010's total: equivalent to twice the expected output of the Elephant field by then.

Outlook for Production

Libya should achieve its modest target of 2.0 mn bpd in 2010, though this figure is likely to include some NGL. Beyond that date, it plans a further increase to 3.0 mn bpd by 2015. The reported size of Libya's reserves suggest that this is feasible, but the lack of any recent large discoveries gives some cause for caution concerning this higher figure. Areas to watch for such discoveries are the border with Algeria, where several fields exist on the Algerian side, the onshore Sirte and Kufra Basins, and the continental shelf, where one new field has been discovered recently, the 20,000 bpd Al Jurf field.

Libya and the Rise of the Independents
Following the end of the Second World War, oil production outside the USSR and China was dominated by a handful of vertically-integrated US and European companies. Their dominance looked like being prolonged after 1945 as the American and British governments in particular tried to restrict access to the areas of the Middle East where they remained the dominant powers. A number of independent companies, however, began to challenge the dominance of the major companies and they were presented with a great opportunity in Libya.
After Libya became independent in 1951, the government determined that its oil industry should not be dominated by the oil majors. The first concessions in 1955-6 were awarded to a large number of companies, including several US independents. Amongst these were Amerada, Continental (Conoco) and Marathon, which formed a syndicate known as Oasis, and Occidental. Output rose rapidly and, by 1969, Libya was the world's fourth-largest oil exporter.
In the same year, Libya's King Idris was overthrown by a group of army officers led by a Colonel Muammar Qadhafi. Oil prices had been falling during the 1960s as production outside the US rose and much of the rising output from the Middle East was kept out of the US by import controls. Libya fared particularly badly. The government's oil receipts were soon some of the lowest in the world.
Col. Qadhafi decided to remedy this matter. Libyan oil was increasingly sought in Europe for its low sulphur content and for its nearby location. The main route for Middle Eastern oil into Europe was either via the Suez Canal or by a pipeline from Saudi Arabia to Sidon in the Lebanon. Both were liable to interruption for political reasons, as in the Six Day War in 1967, when the Suez Canal was closed. Qadhafi determined to take advantage of these factors to enable him to satisfy two of his main political aims: to make the oil companies pay more for their oil and to use it as a political weapon, particularly against Israel. Another of the new government's aims was to slow down the rapid depletion of Libya's oil reserves, caused by the high rates of extraction then prevalent.
Qadhafi put pressure first on the independents to pay more for their oil. Many had no alternative sources of supply to Libya and acquiesced to Libya's demands. The majors finally followed suit. Other oil-producing countries made similar demands. Following a stand-off between French companies and Algeria, the government nationalized 51% of French interests in 1971. Qadhafi copied this approach, starting with BP. The process continued to other foreign companies operating there until 1974, when Libya also revoked their concession agreements and converted them into production-sharing contracts, which were less attractive to outside investors. It also granted majority holdings in all exploration and production licences to the newly-established National Oil Corporation (NOC).
Qahafi supported the idea of cutting oil production as a way of raising oil prices. In the years that followed the nationalizations, Libya's oil output fell, reaching a low point in the late 1980s following the departure of the last of the US oil companies. From 1981 to 2004, Libya was subject to sanctions from the US and, for part of that period, by the UN. Production only began to recover, following a prolonged period of stagnation, in 2003.
Table 8
Libya: Planned Output Growth, 2004-10
Company Field Complex New Output Year On-Stream
(th bpd)
ENI Elephant 125 2004
ENI/Agip Gas West Libya Gas Project 95 2004
Repsol YPF NC-186D 35 2004
ENI NC-118A 10 2004
NB: Further new fields are expected to be developed following the most recent licensing round (see text). These could add a further 0.4-0.5 mn bpd by 2010.
Source: Company data.

With the commissioning of some new fields following the 2004 licensing round and the expected rounds of 2006 and 2008, along with widespread EOR, Libya's production should rise as follows:

Libya: Natural Gas Production

Libya's hydrocarbon reserves are predominantly oil. Gas is nevertheless set to play an increasing role in the country's energy economy.

The Reserve Base

Libya's proven gas reserves of 46.4 tcf are sufficient to last for 205 years at 2003's low rate of production. Most exploration effort has until recently been concentrated on oil.

As with oil, there are presumed to be large undiscovered gas reserves. Interest in gas exploration has increased since the late 1990s as demand in Europe has begun to accelerate. Most of Libya's gas is produced in association with oil. Output was little changed during the 1990s and in the early part of the present century, but is expected to rise following the commissioning of the West Libya Gas Project (WLGP) in October 2004. Gas from there is produced from the onshore Wafa field and the offshore Bahr Essalam field.

Production Plans

Libya's gas industry is being developed so as to increase the present low level of exports. Its sole customer at present is Enagas of Spain. Deliveries have declined in recent years and Libya has been unable to find new outlets for its LNG owing to technical limitations at its Marsa el-Brega liquefaction terminal, which put the gas off-specification for many LNG receiving terminals. Sanctions prevented the Libyans from modernizing the plant.

The first phase of WLGP is scheduled to provide about 100 mn cfd during the fourth quarter of 2004, all of which will be exported through a new gas pipeline, known as Greenstream, to Italy. At full capacity, the field will produce just under 1 bn cfd, of which 775 mn cfd will be exported to Italy and the rest used in Libya, mainly for power generation.

WLGP is being developed by ENI and NOC. Early in 2004, Shell signed heads of agreement covering gas production in the Sirte Basin for both domestic consumption and export. Shell indicated that the gas could be exported as LNG to Europe and the US.

Outlook for Production

WLGP is expected to be running at full capacity in 2010. Libya may have additional associated gas production as oil production increases. Domestic demand for electricity is likely to encourage gas development further through integrated gas-to-power schemes. Under these circumstances, gas production is forecast as follows:

Morocco

Morocco attracted foreign interest in oil exploration long before Algeria and Libya. Some leading twentieth century geologists believed that the Sahara contained little or no oil. Moroccan exploration got under way after the establishment of the Bureau de Recherches et de Participations Minières (BRPM) in 1928 and was carried out principally by France's two main oil companies, Elf and Total, then operating under different names. Production was far from spectacular, reaching a peak of 3,000 bpd in 1963, before dwindling to virtually nothing.

Reserves and Production

Morocco's proven oil reserves are a minuscule 2 mn bbl. Production is similarly tiny at less than 200 bpd. Despite this, there has been some interest in exploration, mainly from small independents.

The main area of interest is the Atlantic continental shelf. Exploration is overseen by the state-owned Office National de Recherches et d'Exploration Pétrolières (Onarep), which replaced BRPM as the body responsible for oil and gas in 1981. Onarep's terms for offshore exploration were once seen as unattractive by many oil companies but early in 2004, Vanco Energy announced plans to drill an offshore block it owns with Onarep and ENI. Shell, too, began exploring off southern Morocco later the same year.

Offshore southern Morocco is seen by many geologists as the most prospective area in the country. This area adjoins the disputed area of Western Sahara. Morocco claims sovereignty over the former Spanish colony, but its title to the territory has been disputed by a political and military group known as the Polisario Front, which established a government-in-exile for the Saharawi Arab Democratic Republic (SADR). One Australian independent, Fusion Oil & Gas, signed a technical co-operation agreement with the SADR in 2003 for an offshore survey. France's Total and Kerr-McGee of the US, however, signed a similar type of deal covering offshore Western Sahara with the government of Morocco. Until the sovereignty issue is resolved, the legal status of any production off Western Sahara remains unclear.

Hyper-link: (W. Sahara)

The other place to have attracted attention is the area along the Algerian border. The attention may not in the end have been entirely welcomed by the Moroccan authorities. In 2000, Onarep and the Ministry of Energy announced an enormous find in that area by a small Texas oil company called Lone Star Energy. Government officials claimed 'undiscovered' reserves of up to 15 bn boe, more than the proven oil reserves for the whole of Algeria (see Table 3). The statement was later finessed to a claim that Lone Star had actually discovered 100 mn bbl: still a substantial find by Moroccan standards. Lone Star was taken over by a Saudi Arabian consortium, which then reduced the size of the find to zero by claiming the well was a dry hole. The Lone Star saga was just one in a long line of tall tales dating back to the 1950s of wonder finds in the basin known as Tindouf. It is unlikely to be the last.

Hyper-link: Lone Star "Find"

Oil Shales and Coal

One area of Morocco that does contain oil is Tarfaya in the south-west of the country, where reserves almost certainly do run into billions of barrels. Unfortunately for the Moroccans, these reserves exist in the form of oil shales, from which it is both difficult and costly to extract the liquid oil. The government's long term ain is to use the shale to fuel a power station at Tarfaya and to use it in other applications such as the production of bitumen, sulphur and cement.

As well as oil shales, Morocco has small deposits of coal. Mining declined sharply during the late 1990s. OET's Annual Statistical Review of 2004 shows no output for 2003.

Outlook for Production

Oil production from conventional sources is likely to remain small throughout the remainder of the decade, though there may be some offshore output from the south after 2010. Long-standing plans to produce up to 60,000 bpd must be viewed as unrealistic for the foreseeable future.

Natural Gas: Reserves and Production

Morocco's proven gas reserves, like those of its oil, are tiny, at an estimated 40 bn cf. Output is below 5,000 cfd, having been more or less unchanged for more than a decade. One small independent, Stratic Energy expects to drill an area of former onshore oil production in the north-west of the country during 2005, where shallow gas deposits are also believed to exist. Offshore drilling by Repsol YPF and Petronas in an area close to the Stratic blocks may also eventually turn up natural gas.

Outlook for Production

There is a potential market for domestically produced gas in northern Morocco. There is even a small distribution system there, which is currently used to handle the 160 mn cfd that Morocco receives from the Europe-Maghreb Gasline (MEG) that links Algeria to Spain (see Table 6). There is nevertheless little prospect of large scale commercial gas production before 2010. Output is therefore expected to remain little changed between now and then.

Hyper-links: Oil/Gas Production

Tunisia

Tunisia has modest reserves of oil and natural gas (see Table 9). It has attracted a range of foreign companies to explore, but spectacular gains in output look unlikely. Oil production has declined in recent years, but gas production has gone up.

Table 9
Tunisia: Reserves & Production, 2003
OIL
Proven Reserves 300 mn bbl
Production 67,000 bpd
Reserves remaining 12 years
NATURAL GAS
Proven Reserves 2.7 tcf
Production 226 mn cfd
Reserves remaining 33 years
Source: OET Annual Statistical Review, 2004.
(Imports) US Department of Energy, Energy Information Administration (EIA)

Oil: Reserves and Production

Tunisia's proven reserves of oil are variously estimated between about 300 mn and 500 mn bbl, giving between 12 and 20 years of remaining reserves at 2003 rates of production. The latest figures for reserves represent a downward revision of estimates issued in the early 1990s of between 1.7 bn and 1.9 bn bbl.

Exploration interest in Tunisia dates from the 1890s, but oil was not discovered until 1964 when an Italo-Tunisian venture found the El Borma field in the south, close to the border with Algeria. El Borma remains the country's largest oil find to date. Exploration was stepped up after the foundation of the national oil and gas company, Enterprise Tunisienne d'Activités Pétrolières (ETAP).

Commercial oil production began in 1966, rising to a peak of 118,000 bpd in 1980. Thereafter, it fell steadily to 67,000 bpd in 2003. Production is almost entirely crude oil, with very little contribution from NGL.

Tunisia has attracted exploration interest from oil majors and independents, but there have been few recent large discoveries, leaving the country as a mature oil province with declining production. The largest fields in terms of output are El Borma, Sidi El Kilani and the offshore Ashtart field, which lies in the Gulf of Gabes and which, according to ETAP, was producing just over 13,000 bpd at the start of 2004.

Exploration and development effort in 2004 included work Oued Zar, Hammouda, Guebiba and Ezzaouia, and there is a continuing development programme for Ashtart. All these fields, however, with the exception of Ashtart, produce less than 10,000 bpd.

Outlook for Production

It is difficult to see how Tunisia might reverse its recent decline in production. There may, however, be an increased contribution of NGL thanks to some recent offshore discoveries (see below) thus stabilizing the output of liquids around 70,000 bpd.

Natural Gas: Reserves and Production

Most exploration interest in recent years has been in oil rather than natural gas. As in the case of oil, estimates of proven reserves have been revised downwards since the 1990s. The latest figure of 2.7 tcf compares with 3.3 tcf some ten years earlier.

Gas production was in decline during the early 1990s, but this was reversed from 1995 onwards following the commissioning of the offshore Miskar field in that year. The BG-owned field now provides about 60% of Tunisia's gas. BG is planning to extend the development of the Miskar field following the identification of new reserves, as well as developing another offshore field, Hasdrubal, which contains condensate as well as gas. Further discoveries offshore appear likely over the next few years.

Outlook for Production

The revival in gas production that followed the start-up of the Miskar field looks set to continue, albeit at a modest rate. Output may reach 300 mn cfd by 2010, or slightly more if areas adjacent to Miskar and Hasdrubal prove to be more prolific than expected.

Hyper-links: Oil/Gas Production

North African Exports

Algeria and Libya are important suppliers of oil and natural gas to Europe. Morocco and Tunisia are net importers, though there are plans to export small quantities of liquefied petroleum gas (LPG) from Tunisia. Algerian and Libyan exports of oil, NGL and natural gas are likely to grow over the coming decade.

Oil Exports

Europe's appetite for Algerian and Libyan oil is likely to increase steadily: not only because these two countries represent a nearby source of oil, but also because their exports are mainly of light, low sulphur crude oil. The physical nature of Algerian and Libyan crude is likely to increase their appeal in the US and Asia as well, as refiners there seek increased volumes of light, sweet crudes to replace falling production nearer at hand.

Table 10
Algeria: Crude Oil Exports, 2003
Destination Volume Market Share
(th bpd) (%)
Netherlands 177 18
United States 166 16
Canada 135 13
France 107 11
Germany 98 10
Brazil 81 8
Italy 64 6
Spain 54 5
United Kingdom 49 5
Indonesia 17 2
Others 59 6
Total 1,007 100
Source: World Oil Trade; Blackwell Publishing, 2004.

Algeria is already an important supplier to the US and Canada (see Table 10) and has also begun increasingly to supply countries in Asia, such as Indonesia and China. The US is the main destination for its refined product exports, taking 108,000 bpd in 2003, followed by the Netherlands, with 48,000 bpd.

Table 11
Libya: Crude Oil Exports, 2003
Destination Volume Market Share
(th bpd) (%)
Italy 471 52
Germany 131 15
Spain 125 14
Turkey 50 6
France 37 4
Switzerland 36 4
Greece 28 3
Austria 14 2
Others 11 1
Total 903 100
NB: Percentage totals rounded.
Source: World Oil Trade; Blackwell Publishing, 2004.

More than 99% of Libya's crude oil exports go to Europe, principally to Germany and the Mediterranean (see Table 10). The ending of the US trade embargo should eventually lead to sales across the Atlantic. Asia, especially China, may also take an increasing interest in Libyan crude in future.

In 2004, the state-owned Sinopec imported 20,000 bpd of Libyan crude into China. The Chinese also imported Algerian Saharan Blend on a spot basis during 2003. In 2004, state trader Unipec signed a contract to take 44,000 bpd of the same crude to China for six months. Indonesia agreed a 33,000 bpd term deal with Algeria in the same year, whilst Thailand's PTT took spot cargoes of Saharan Blend. South Korea was also reported to be discussing a supply contract with Sonatrach during 2004.

OET ARCHIVE

'Japan seeks greater energy security' Focus, Dec 04

Outlook for Oil Exports

Net exports of crude oil, NGL and refined products totalled 1.6 mn bpd for Algeria and 1.3 mn bpd for Libya in 2003. These are likely to rise to 2.0 mn bpd and 1.7 mn bpd, respectively, in 2010, based on the forecasts of production outlined above (see Table 12).

Table 12
North Africa: Oil Balance, 2003-2010
Country 2003 2010 Change
(mn bpd)
Algeria
Production 1.9 2.3 0.4
Consumption 0.2 0.3 0.1
Net Trade 1.6 2.0 0.4
Libya
Production 1.5 2.0 0.5
Consumption 0.2 0.3 0.1
Net Trade 1.3 1.7 0.4
Morocco
Production * * *
Consumption 0.2 0.3 0.1
Net Trade (0.2) (0.3) 0.1
Tunisia
Production 0.1 0.1 †
Consumption 0.1 0.1 †
Net Trade † † †
NB: Totals rounded.
* Less than 1,000 bpd.
† Less than 100,000 bpd.
Source: GER Forecast.

Natural Gas Exports

The pattern of gas exports from Algeria somewhat mirrors that of oil in that most go to Europe, but interest is increasing from the US and Asia (see Table 13). Libya's gas exports all go to Europe at present, and its ability to supply other countries is limited by technical problems with its LNG liquefaction terminal (see above).

Table 13
Algeria and Libya: Natural Gas Exports, 2003
Destination Volume Market Share
(th bpd) (%)
Algeria
Italy 2.27 38
Spain 1.34 23
France 0.89 15
Turkey 0.37 6
Belgium 0.30 5
Portugal 0.24 4
Tunisia 0.16 3
United States 0.15 3
Morocco 0.06 1
Greece 0.05 1
Slovenia 0.04 *
South Korea 0.02 *
Total 5.91 100
Libya
Spain 0.07 100
Total 0.07 100
NB: Totals rounded. Figures show contract volumes only.
* Less than 1%.
Source (2003): BP Statistical Review of World Energy, 2004; Cedigaz.
(2004): GER Forecast.

OET ARCHIVE

'US Looks north (and south) as gas starts top run out' Focus, Aug04

'EU gas market liberalization threatened by pricing issue' Focus, Nov04

Outlook for Gas Exports

Net exports of natural gas totalled 5.9 bn cfd for Algeria and 70 mn cfd for Libya in 2003. These are likely to rise to 8.1 bn cfd and 1.2 bn cfd, respectively, in 2010, based on the forecasts outlined above. Europe is likely to remain the dominant market for both countries, though exports from Algeria to the US and Asia are also likely to rise. Morocco and Tunisia are forecast to remain net importers of gas (see Table 14).

Table 14
North Africa: Natural Gas Balance, 2003-2010
Country 2003 2010 Change
(bn cfd)
Algeria
Production 8.0 11.0 3.0
Consumption 2.1 2.9 0.8
Net Trade 5.9 8.1 2.2
Libya
Production 0.6 2.0 1.4
Consumption 0.5 0.8 0.3
Net Trade 0.1 1.2 1.1
Morocco
Production * * *
Consumption 0.1 0.2 0.1
Net Trade (0.1) (0.2) 0.1
Tunisia
Production 0.2 0.3 0.1
Consumption 0.4 0.5 0.1
Net Trade (0.2) (0.2) *
NB: Totals rounded.
* Less than 100,000 cfd.
Source: (2003): BP Statistical Review of World Energy 2004; Cedigaz.
   (2004): GER Forecast.

North Africa beyond 2010

Table 15 summarizes our forecast of oil and gas production to 2010. Beyond that date, Algeria and Libya may be able to increase their output further. Tunisian output will probably peak around that time. Morocco may be producing modest amounts of shale oil after 2010.

Table 15
North Africa: Oil & Gas Production, 2003-10
2003 2010 Change
OIL & NGL (mn bpd)
Algeria 1.9 2.3 0.4
Libya 1.5 2.0 0.5
Morocco * * *
Tunisia 0.1 0.1 *
NATURAL GAS (bn cfd)
Algeria 8.0 11.0 3.0
Libya 0.6 2.0 1.4
Morocco † † †
Tunisia 0.2 0.3 0.1
* Less than 1,000 bpd.
† Less than 100,000 cfd.
Source: Tables 12 & 13.

Algeria's state oil and gas company, Sonatrach, sees a possible rise in oil and NGL production above 3.0 mn bpd by 2020. Whilst this is not impossible, it appears unlikely unless there are some major new finds in Algeria. In the absence of these, output is unlikely to go much above 2.5 mn bpd between now and 2020.

On the other hand, Sonatrach's gas goal of 16.6 bn cfd by 2020 does look more feasible thanks to Algeria's better reserve position in natural gas. The main issue for gas is likely therefore to be the securing of markets and the building of the necessary infrastructure.

Libya plans to raise oil and NGL production to 3.0 mn bpd by 2015. As with Algeria, the achievement of this level probably depends on some large new discoveries. In that event, Libya might well be producing at or near this level in 2020.

Tunisia's oil output is likely to be below 0.1 mn bpd in 2020 and in long term decline. Gas production is also likely to be past its peak and down to about 0.2 bn cfd by then. Morocco may be producing oil and gas from offshore acreage by 2020: perhaps 0.1-0.2 mn bpd of oil and NGL and 0.1-0.2 bn cfd of gas. There could also be a small amount of oil shale production by then, probably in the region of 0.1 mn bpd.

Latest Developments

Condensate Production

OET ARCHIVE LINK: ‘OPEC plans more condensate production’, Focus, Oct 09

Previous:

Libya

OET ARCHIVE LINK: ‘Libya lowers its sights on oil and gas’, Focus, Sep09

Refining

OET ARCHIVE LINK: ‘Africa plans large refinery additions’, Looking Ahead, Sep09

Algeria & Libya

OET ARCHIVE LINK: ‘OPEC battles with financial crises and recession’, Focus, Nov08

Algeria

OET ARCHIVE LINK: 'Algeria switches away from Oil to Gas', Gas&Power, Oct08

Libya

Exports of 100,000 bpd of Libya’s Amna and Sirtica crudes were interrupted at the end of August by a fire at the Ras Lanuf export terminal.

Algeria

OET ARCHIVE LINK: ‘Algeria warns of higher Gas Prices’, Gas & Power, July08

Algeria and Libya

OET ARCHIVE LINKS: ‘Energy in North Africa II’, Focus, Nov07
‘Africa plans new refineries’, Looking Ahead, Nov07

Egypt and Tunisia

OET ARCHIVE LINKS: ‘Energy in North Africa I’, Focus, Oct07
‘Europe struggles to find more gas’, Gas & Power, Oct07

Algeria

OET ARCHIVE LINK: ‘Europe struggles to find more gas’, Gas & Power, Oct07

Libya

Thirty-five companies qualified as operators in Libya’s first gas licensing round, including many international majors. Libya plans to double output to 3 bn cfd by 2010.

An oil exploration round has been under way since 2005. The government’s aim is to raise production by 1.2 mn bpd to 3.0 mn bpd by 2010

Morocco

The government has backed proposals for a 0.5 bn cfd LNG import terminal; for Tangiers or Jorf Lasfar. Completion is scheduled for 2013. A second phase could result in the doubling of capacity.

Gas Exports

OET ARCHIVE LINK: ‘Middle East and North Africa take growing share of EU’s gas market’, Focus, Aug07

Algeria

Algeria has abandoned plans to raise oil production to 2.0 mn bpd by 2010. Instead, it proposes to keep output fairly close to its existing level of 1.5 mn bpd, devoting more of its attention to raising gas production instead (see OET ARCHIVE LINK above).

Libya

Libya 's state oil company NOC says that crude oil production will rise from 2006's level of 1.8 mn bpd to 2.0 mn bpd by mid-2007 and to 3.0 mn bpd by late-2012.

Libya

Libya 's National Oil Corporation has announced plans for oil production capacity of 2.0 mn bpd in mid-2007 and 3.0  mn bpd by 2012, compared with 1.7 mn bpd at present.

Algeria

Gas production has begun at the Amenas field and is expected to be in the region of 870 mn cfd by late August, 2006. The field is also expected to produce up to 60,000 bpd of condensate by the end of the year.

Libya

Amerada Hess has reported finding a "significant structure" in Block 54 of the Gulf of Sirte.

Libya

Libya is to sell between 60% and 100% of its state downstream oil company, Tamoil, which has refining and marketing assets in Italy and Germany, including the 100,000 bpd Cremona refinery and the 78,000 bpd Holborn Europa refinery in Hamburg. Tamoil has about 7% of the Italian retail market. It also has distribution and retail networks in various countries across North Africa.

Algeria

Sonatrach plans to produce 1.5 mn bpd of crude oil in 2006, compared with 1.4 mn bpd in late 2005. By 2010, it intends to raise this to 2.0 mn bpd.

It will also increase its exports to Asia, making use of its 6 mn bbl storage facility in South Korea.

Morocco

The Ministry of Energy & Mines estimates energy demand in 2004 as follows:

(th bpd)

LPG

43

Gasoline

9

Jet fuel

7

Gasoil

66

HFO

28

Total

153

 

 

Coal

5.7 mn t

 

 

Natural Gas

3.8 mn cfd

 

 

Electricity

15.7 bn kWh

Algeria

Primary energy production rose by 2% in 2004 to 171 mn toe. Natural gas was the largest source, with 79 mn toe, or 46% of the total, followed by oil, at 66 mn toe, or 39%, according to the Ministry of Energy and Mines.

www.mem-algeria.org

Egypt

OET ARCHIVE:
'Egypt-Israel deal could pave way to wider gas trade', Gas & Power, Aug05.

Algeria

Sonatrach plans to raise its crude distillation capacity by 500,000 bpd to 950,000 bpd by 2010. As well as expanding existing refineries, Sonatrach plans a new one of 300,000 bpd in the centre of the country.

Egypt

Hydrocarbon production for 2003 and 2004 is reported as follows by the Egyptian General Petroleum Corporation:

 

2003

2004

Oil (bpd)

618,589

594,657

Condensate (bpd)

94,084

78,724

LPG (bpd)

36,998

34,749

Gas (mn cfd)

3,330

3,550

Egypt

Gas has begun to arrive at Egypt 's Idku LNG terminal. The gas comes from the BG-operated Simian Sienna fields. As a result Egyptian LNG Train 1 is scheduled to export its first cargo by the end of June 2005. All of the 480 mn cfd output has been sold to Gaz de France under a 20-year deal. The second train is due to be commissioned in the third quarter of 2005 when BG's Sapphire field comes on-stream

Algeria

Algeria plans to raise production capacity as follows, according to Sonatrach:

(mn bpd)

Early 2005

1.4

End-2005

1.5

2010

2.0

Capacity at the Hassi Messaoud field will rise from 0.4 mn bpd to 0.6 mn bpd by 2010.

Tunisia

ETAP reports Tunisian production for 2004 as follows:

OIL

(th bpd)

Field

Ashtart

11,333

Adam/Hawa/Dalia

9,604

Others

22,129

Total

43,066

GAS

(mn cfd)

Field

Oued Zar/HMD

21.3

Franig

15.8

Others

8.6

Total

45.7

April 11 , 2005:

Algeria

The Algerian National People's Assembly adopted the long-delayed hydrocarbon law on 20th March, 2005. The state company, Sonatrach, is to be divided into two entities: Alnaft, which will organize upstream licensing rounds, and Sonatrach Spa, a commercial upstream and downstream company. Sonatrach Spa will have the option to acquire between 20% and 30% of any commercial discovery by a third-party. The oil and gas industries will be regulated by a new Hydrocarbon Regulatory Authority.

The bill is expected to be signed into law by President Bouteflika in April.

Morocco/Mauritania

'Mauritania set to begin oil production', Looking Ahead, April05

Tunisia

Oil production in 2004 was 43,000 bpd and gas production was 46 mn cfd, according to state-owned energy company, ETAP.

Algeria

Algeria 's delayed draft Hydrocarbon Law was approved by President Abdelaziz Bouteflika in February 2005, opening the way for it to be submitted to parliament. The draft law aims at liberalizing the oil and gas industries and allowing better foreign access. It has been opposed by trades unions and Sonatrach. Proposals to privatize Sonatrach were earlier dropped after fierce opposition to the idea.

Libya

Libya has awarded its first contracts to US companies in 18 years with the award of exploration licences to Amerada Hess, ChevronTexaco and Occidental. Fifteen blocks were offered to foreign bidders.

Libya says it plans to produce 2.1 mn bpd by 2010 versus 1.6 mn bpd in January 2005.

Algeria

Refined products' consumption grew by 6% in the first half of 2004 versus the same period in 2003, according to figures issued by the Ministry of Energy and Mines in December 2004.

First half 2004 consumption was as follows:

(th bpd)

Gasoline

42.6

Kerosine

7.6

Gasoil

101.0

Heavy fuel oil

6.3

Others

77.5

Total

235.0

Natural gas consumption went up by 0.3% over the same period to 2.2 bn cfd.

First half 2004 electricity consumption was up 3% to 12,520 GWh.

Morocco

The Ministry of Energy & Mines and the Office National de l'Électricité has announced energy consumption figures for 2003 as follows:

(th bpd)

LPG

0.04

Gasoline

8.94

Jet fuel

6.24

Gasoil

64.56

Heavy fuel oil

26.87

Total

106.65

 

Natural gas

5.13 mn cfd

Coal

5.29 tonnes

Electricity

14,522 GWh

   

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