Algeria Oil and Gas Report Q2 2012
Business Monitor International, May 2012, Pages: 83
BMI View: Despite significant potential for exploration, we believe that unless new basins (or large fields in existing basins) are discovered, reserves could very well peak this decade. Furthermore, the fall in reserves could be further exacerbated by growing oil and gas output and a lack of foreign investment in the industry – a symptom of the country’s unfavourable tax regime. The mooted reform of Algeria’s hydrocarbons law is, therefore, likely to be welcomed by foreign operators and should revive the country’s somewhat moribund upstream segment.
The main trends and developments we highlight for Algeria’s Oil & Gas sector are as follows:
After three rather disappointing bidding rounds, with only nine blocks attracting winning bids out of the 36 licence areas auctioned since 2008, Algeria's energy minister, Youcef Yousfi, said on December 7 2011 that the country would review its energy legislation. The next version of the national hydrocarbons law is expected to improve the regulatory environment across the oil & gas sector. According to Yousfi, the measures that are expected to be included in the coming reforms suggest that taxes will be calculated based on the profit from a project instead of turnover. However, the rule that requires state-owned Sonatrach to hold a 51% stake in all upstream projects will be retained, as will the non-deductible windfall profit tax (WPT) imposed on international investors.
BMI expects oil production to rise from approximately 2,083,000 barrels per day (b/d) in 2011 to 2,654,000 in 2021, as ambitious new projects, mostly located in the Berkine basin, come onstream. Production will be further boosted by increased output at major fields such as Hassi Messaoud, and by enhanced recovery rates.
Consumption of crude is likely to rise steadily at an average 3.3% average growth rate from 2011 to 2021. This is partly in line with the expected GDP growth rate, although we expect energy intensity to increase towards the end of the decade. We anticipate that crude consumption will rise from an estimated 320,000b/d in 2011 to 444,000b/d by 2021.
BMI forecasts that gas production will increase from 85.0bn cubic metres (bcm) in 2011 to 142.4bcm by 2021, as ambitious new projects, mostly located in the Ahnet and Illizi basins, come onstream. Production will be further boosted by increased output at major fields such as Hassi R’mel and by enhanced recovery rates at the In Salah Gas Project.
Gas demand is set to rise steadily on the back of solid economic growth. BMI forecasts average growth of 5.4% from 2011 to 2015 and we therefore anticipate that consumption will rise from an estimated 30.3bcm in 2011, to hit 51.2bcm by 2021.
Unless sizeable fields are discovered at existing basins, the country’s main basins – including Erg Occidental-Ahnet, Erg Oriental-Berkine, Illizi and In Salah, which all have substantial discovery potential – we expect reserves to peak this decade. Another alternative is that new basins may be discovered in the north or in the offshore Mediterranean. Oil reserves are forecast to peak at about 12.5bn barrels (bbl) in 2012 and gas reserves are expected to peak at 4.8trn cubic metres (tcm) in 2014. However, there is a substantial upside risk to recoverable gas reserves, in the form of vast untapped shale resources.
In terms of infrastructure, several upgrades at the Skikda, Arzew and Algiers refinery are expected to come onstream, with an increased capacity from a proposed greenstream refinery expected towards the end of the decade.
Algeria’s dependence on oil prices leads to high volatility in the country’s export revenues. Our assumptions of slower growth in China, a faltering recovery in the US and uncertainty with regard to the eurozone debt crisis, clearly pose a threat to global demand. As a result, we assume OPEC basket oil prices will fall from an average of US$107.52/bbl in 2011 to US$99.38/bbl in 2012, thus creating downside to Algeria’s macroeconomic outlook.
Business Monitor International's Algeria Oil and Gas Report provides industry professionals and strategists, corporate analysts, oil and gas associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Algeria's oil and gas industry.
BMI Industry View
SWOT Analysis
Algeria Oil And Gas Swot
Global Energy Market Outlook
Libya Production Update: Main Fields (As Of Jan 9)
Global Oil Consumption, 2009-2016 (000b/d)
Global Oil Production, 2009-2016 (000b/d)
Regional Energy Market Outlook
Algeria Energy Market Overview
Table: Algeria – Upstream Projects Database
Industry Forecast Scenario
Oil And Gas Reserves
Table: Algeria Oil & Gas –Historical Data And Forecasts, 2008-2016
Table: Algeria Oil & Gas – Long-Term Forecasts, 2013-2021
Oil Supply and Demand
Gas Supply And Demand
Export Revenues
Key Risks To BMI’s Forecast Scenario
Oil And Gas Infrastructure
LNG
Oil Refineries
Table: Refineries In Algeria
Gas Pipelines
Regional and Country Risk/Reward Ratings
Upstream Risk / Reward Ratings
Downstream Risk / Reward Ratings
Competitive Landscape
Table: Key Players In The Algerian Energy Sector
Overview/State Role
Licensing and Regulation
Government Policy
Licensing Rounds
International Energy Relations
Table: Key Upstream Players
Table: Key Downstream Players
Company Monitor
Enterprise Nationale Sonatrach
Anadarko Algeria
Eni Algeria Production
BP Algeria
Total
Repsol Argelia
BHP Petroleum (Algerie)
CEPSA
Statoil Algeria
Hess – Summary
Maersk Oil – Summary
Royal Dutch Shell – Summary
ConocoPhillips – Summary
BG Group/Gulf Keystone Petroleum – Summary
Talisman Energy – Summary
Gazprom – Summary
Others – Summary
Africa – Regional Appendix
Table: Oil Consumption, (000b/d) 2009-2016
Table: Oil Consumption, (000b/d) 2014-2021
Table: Oil Production, (000b/d) 2009-2016
Table: Oil Production, (000b/d) 2014-2021
Table: Refining Capacity, (000b/d) 2009-2016
Table: Refining Capacity, (000b/d) 2014-2021
Table: Gas Consumption, (bcm) 2009-2016
Table: Gas Consumption, (bcm) 2014-2021
Table: Gas Production, (bcm) 2009-2016
Table: Gas Production, (bcm) 2014-2021
LNG Net Exports, bcm 2009-2016
LNG Net Exports, bcm 2014-2021
Methodology And Risks To Forecasts
Glossary Of Terms
Oil And Gas Risk/Reward Ratings Methodology
Ratings Overview
Table: Bmi’s Oil & Gas Business Environment Ratings – Structure
Indicators
Table: Bmi’s Oil & Gas Upstream Ratings – Methodology
Table: Bmi’s Oil & Gas Business Environment Downstream Ratings – Methodology
BMI Methodology
How We Generate Our Industry Forecasts
Energy Industry
Cross checks
Sources
- Enterprise Nationale Sonatrach
- Anadarko Algeria
- Eni Algeria Production
- BP Algeria
- Total
- Repsol Argelia
- BHP Petroleum (Algerie)
- CEPSA
- Statoil Algeria
- Hess
- Maersk Oil
- Royal Dutch Shell
- ConocoPhillips
- BG Group/Gulf Keystone Petroleum
- Talisman Energy
- Gazprom
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