Overview

In terms of market size, Algeria has the tenth-largest proven natural gas reserves globally, is the world’s fourth-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.  All 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.

Given pressure from European Union customers to increase its supply of gas, Sonatrach and its international partners are intensifying oil and gas exploration.  Simultaneously, Algerian authorities are calling for locally manufactured products and services for small and medium-sized oil and gas service projects.  As a part of this push to further develop the local oil service industry, Sonatrach encourages Algerian oil and gas services companies to conclude subcontracts and licensing agreements with international oil and gas equipment manufacturers.  For large projects, however, Sonatrach continues to rely on world-class Engineering, Procurement, and Construction (EPC) contractors, who routinely work with American equipment and service providers.  U.S. equipment and service suppliers should work proactively with Sonatrach to be included in its approved vendor list and become familiar with the technical specifications for upcoming EPC projects.

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).

Regarding 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 various local and international oil field services companies, and the Algeria Oil and Gas Energy Resource Guide provides a comprehensive list of these companies.

Source: OPEC Annual Statistical Bulletin

Source: OPEC Annual Statistical Bulletin

Leading Sub-Sectors/Best Prospects

• Reservoir Management
• Well Selection and Completion
• Drilling and Hydrocarbon Production
• Drilling Mud Treatment
• Certification and Equipment Repair Services
• High-Pressure Control Management
• Processing of Gas
• Enhanced Gas Recovery Technologies
• Flare Gas Processing
• Decision Support and Data Flow

The Algeria Oil and Gas Energy Resource Guide includes a more detailed list of best prospects.

Opportunities

Given the recent increase in global oil prices, Sonatrach is moving forward with a $40 billion five-year investment plan.  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 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. 

In addition to the opportunities present in mature fields, opportunities for U.S. equipment and services suppliers exist in newly discovered fields.  In August 2022, Sonatrach announced three substantial oil and gas discoveries in three separate basins in the Algerian Sahara.  These included a gas discovery near the giant Hassi R’Mel field, representing Algeria’s most significant discovery in the past two decades.  Sonatrach is fast-tracking these discoveries to boost Algerian gas production to meet increasing demand from Italy and the European Union.  This development offers U.S. companies opportunities in; oilfield integrity solutions, high-pressure control solutions, downhole equipment manufacturing and repair, drilling rigs and blow-out preventer repair and certification, multiphase pumps, drilling mud treatment, enhanced gas recovery solutions, and horizontal drilling. 

Resources

Major Trade Shows

• North African Petroleum Exhibition and Conferences (NAPEC) – March 13-16, 2023, Oran
• OGEX – Oil and Gas Exhibition – June 2023, Algiers

Listings of Public Procurement Announcements

• Please visit the BAOSEM website, 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