WEC: Algeria to offer 10-15 blocks in next round

Algeria will offer 10-15 blocks in its next licensing round in January 2008, Chakib Khelil, Algeria's energy minister, told OGJ in an exclusive interview during the World Energy Congress.

Uchenna Izundu
International Editor

ROME, Nov. 13 -- Algeria will offer 10-15 blocks in its next licensing round in January 2008, Chakib Khelil, Algeria's energy minister, told OGJ in an exclusive interview during the World Energy Congress.

State-owned Sonatrach will seek prequalified partners that can offer upstream asset swaps, he said. "I can't say where the blocks will be offered. Some of those proposed are are controlled by Sonatrach and others by the state, but the same process will apply to both."

Khelil told OGJ that the government had introduced these terms because it needs technology and assistance to develop the blocks.

"Algeria and Sonatrach have money; we don't need that. Sonatrach has the know-how. We want Sonatrach to become an important player in the international arena," he said.

He denied accusations of resource nationalism, a major subject discussed during the World Energy Congress in Rome, saying that the phenomenon was not particular to Algeria.

Sonatrach will not seek other international partners to help it with Gassi Touil integrated production and LNG export project in the Berkine basin in the Sahara Desert after terminating the agreement with Gas Natural and Repsol (OGJ, Sept. 20, 2007, Newsletter).

"It poses too many problems to find other partners and start from scratch, so we have decided to do it alone," Khelil said. Production will start in 2012, 3 years later than originally planned.

Khelil said Sonatrach ended the agreement because of delays and rising costs. The former partners are now in arbitration. "This is a commercial issue, not one of resource nationalism. Even the Spanish foreign minister has said that."

He defended Algeria's decision to impose tax on exceptional profits as one of "logic," saying, "When oil was $15/bbl in the '80's and the contracts were signed there was no mechanism to have oil prices go that high. The state of Algeria said it would take a fair share, but a similar thing is happening in Alberta, the US, and the UK."

His priorities as the new president of the Organization of Petroleum Exporting Countries for the next 6 months will be to focus on the cohesion and credibility of the organization and strengthening it by seeking new members. OPEC has not started discussions with Brazil about joining, he said, despite reports that Brazilian President Luiz Inacio Lula da Silva suggesting it might join the cartel on the basis of its Tupi discovery (OGJ, Oct. 16, 2006, Newsletter).

"By the time that Petrobras develops that it will be another 4-5 years, and we'll welcome any country for that if it becomes an exporter," Khelil added.

There will be no discussion of an OPEC production increase at the group's imminent summit in Riyadh. "We will focus on major issues over the long term like stabilizing the market and the financial market, and sustainable development. Each impacts on the other."

Contact Uchenna Izundu at uchennai@pennwell.com.

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