Sonatrach Plans to Boost Output by 2018, Invest USD100 Billion

By Abdelghani Henni 6 Aug 2014

Algeria state energy company Sonatrach plans to increase oil and gas production to 1.865 billion BOE/yr by 2018 from current production levels of 1.419 billion BOE/yr. 

The company currently produces around 1.8 million BOPD, down by about 200,000 bbl from a decade ago. Gross natural gas production in 2012, the latest figures available, was 6.2 trillion cubic feet (Tcf), compared with its peak of 7.8 Tcf in 2008. A large amount of produced natural gas is used in EOR projects.

The OPEC producer has been trying to rejuvenate production by enticing foreign oil firms to invest in the country, which has numerous aging facilities. Earlier this month, it announced a USD 100 billion investment package in the upstream energy sector. The USD 100 billion spending for the 5-year period through 2018 will be aimed at boosting reserves and increasing oil and gas production. The plan allocates USD 42 billion to help develop oil and gas fields from now through 2018. That figure includes USD 22 billion for natural gas development.

To achieve this target, Sonatrach is aiming to maintain oil production from the Hassi Messaoud field at 400,000 BOPD and to recover an additional 400 Bcm of gas from the Hassi Rmel field.

The company is also planning to start production from a number of new gas fields before 2018, including Tinhert (with target production of 24 MMcm/D), Hassi Bahamou and Hassi Mena (21 MMcm/D), Touat (12 MMcm/D), Reggane (12 MMcm/D), and Timimoun (5 MMcm/D). 

The mega investment is also aimed to start production from its unconventional resources in 2020, targeting initial gas production of 30 Bcm/year from the first phase development of shale. Algeria is said to hold the third-largest shale gas deposits in the world. 

Abdelghani Henni is the Middle East Editor for the Journal of Petroleum Technology.