Total Cie. Francaise des Petroles has agreed to a new kind of production partnership with Algeria's Sonatrach.
Total will finance two thirds of the $500 million cost of developing Sonatrach's Hamra gas field in Algeria in return for access to all the condensate and LPG from the field during 14-17 years. The agreement will provide Total 150-200 million bbl of oil equivalent starting in 1994.
Sonatrach will take all the gas from the field, which lies southeast of the Hassi Messaoud production complex.
Total Pres. Serge Tchuruk said the condensate and LPG will be worth about $3.3 billion.
He called the agreement an example of the new form of partnership he wants to establish with producer countries involving "a certain reintegration of oil markets."
In addition to the agreement to provide financing and technology for the Hamra project, Total and Sonatrach agreed to set up a joint company to market butane and propane from the field.
Under a separate agreement, Total and Sonatrach extended the contract to develop and operate Mereksen oil field for another 5 years from 1992.
The original agreement, signed in 1973, was for an initial 12 year period from start-up of production in 1975. A second extension was granted in 1987 for 5 years.
The field is producing about 12,000 b/d.
Two conventional production sharing contracts were also signed between Total and Sonatrach.
They cover the 4,509 sq km Djebel Bottena permit and the 1,949 sq km Southeast Hamra permit. Total is committed to a seismic program and six wells on each block during a 5 year exploration period.
The contracts supplement the production sharing contracts signed in 1989 covering the East El Harcha permit and the West El Agreb permit, where the first wildcat is being drilled.
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