Algeria - Country Commercial Guide
Oil and Gas - Hydrocarbons

This is a best prospect industry sector for this country. Includes a market overview and trade data.

Last published date: 2021-10-11

Overview

In terms of market size, Algeria has the tenth largest proven natural gas reserves globally, is the world’s sixth-largest gas exporter, and has the world’s third-largest untapped shale gas resources. It also ranks sixteenth in proven oil reserves and exports roughly sixty percent of its total production (e.g., 600,000 barrels per day).  All of the country’s proven oil reserves are onshore. According to Algeria’s national oil company, Sonatrach, about two-thirds of the Algerian territory remains underdeveloped or unexplored, with an estimated 100 undeveloped discoveries.

After producing natural gas for several decades, stagnating gas production and rapid growth in domestic consumption have combined to constrain the country’s gas export potential.  As a result, the Algerian government has stated it needs foreign partners to double exploration and production (E&P) in the next five years, including exploring and developing its shale oil and gas resources.  To encourage more foreign investment in E&P, the government passed a new law in January 2020 designed to attract additional foreign investment by International Oil Companies (IOCs).  The new law eases taxes, simplifies license procedures, and shortens the timeframes for E&P agreements.  The law also designates the national oil company Sonatrach as the Algerian party to contracts, wholly eliminating the former hydrocarbons contractual regulator.  The regulations that support this law are expected to be published by the end of 2021, which could enable Sonatrach to enter negotiation rounds with foreign companies as early as 2022.

Sonatrach and its subsidiaries are the leading players in Algeria’s oil and gas sector.  They control roughly 80 percent of hydrocarbon production in Algeria, while IOCs account for the remaining 20 percent.  Sonatrach’s five main divisions include E&P, midstream, downstream liquefaction and separation, downstream refineries and petrochemicals, and sales.  A special unit within Sonatrach, the Division Associations office, develops projects with IOCs.  In addition, Sonatrach has multiple specialized subsidiaries, including ENAFOR (drilling and extraction), ENTP (drilling, work-over activities, and rig transfer), ENGTP (civil engineering earthworks, welding, piping, and test control), ENSP (oil well services), ENAGEO (seismic and reservoir management), and GCB (oil services and civil engineering). 

In terms of competition, Algeria’s oil and gas sector includes a mix of more than two dozen IOCs working on more than 30 significant projects.  These IOCs partner with a variety of local and international oil field services companies.  A comprehensive list of these companies is in the Algeria Oil and Gas Energy Resource Guide

Natural Gas (million cubic meters)

 

2018

2019

2020

2021 estimated

Total Local Production

95,898

89,583

83,092

84,597

Total Exports

51,424

42,497

41,200

46,000

Total Imports

0

0

0

 

Imports from the U.S.

0

0

0

 

Total Market Size

44,474

47,086

41,892

38,597

Exchange Rates (DA/USD)

117.41

119.40

128.42

134.17

Source: OPEC Annual Statistical Bulletin

Crude Oil (thousand barrels/day)

 

2018

2019

2020

2021 estimated

Total Local Production

1,070

1,023

850

1,088

Total Exports

571

584

537

627

Total Imports

6

4

5

2

Imports from the U.S.

0

0

0

0

Total Market Size

505

443

318

463

Exchange Rates (DA/USD)

117.41

119.40

128.42

134.17

Source: OPEC Annual Statistical Bulletin

Leading Sub-Sectors/Best Prospects

  • Reservoir Management
  • Well Selection and Completion
  • Drilling and Hydrocarbon Production
  • Processing of Gas
  • Site Management/Site Safety/Environmental Management
  • Decision Support and Data Flow

A more detailed list of best prospects is in the Algeria Oil and Gas Energy Resource Guide

Opportunities

Despite the impacts of the COVID-19 pandemic on global oil and gas prices, Sonatrach is moving forward with a $40 billion investment plan from 2021 to 2026.  With most of its hydrocarbons derived from mature fields, Sonatrach is focused on optimizing production, notably through enhanced recovery (EOR) technology, and actively seeks foreign partners able to quickly transfer technology in this area.  Small- to medium-sized, independent U.S. companies providing equipment and services in EOR are well-positioned to partner with Sonatrach or its IOC joint venture partners. 

Resources

Major Trade Shows

  • North African Petroleum Exhibition and Conferences (NAPEC) - September, Oran
  • Hassi Messaoud Expo – October, Hassi Messaoud
  • OGEX – Oil and Gas Exhibition – December, Algiers

Listings of Public Procurement Announcements

  • Please visit the BAOSEM website  9 https://www.baosem.com/login), the Official Gazette for Energy & Mines Government Procurement Tenders, for more detailed information on Sonatrach-related procurement.    

Commercial Specialist

For further information and or assistance in exploring opportunities in Algeria’s oil and gas sector, contact: 

Kamal Achab, Senior Commercial Specialist, U.S. Commercial Service Algiers, Kamal.Achab@trade.gov