Algeria
Strategy
The development strategy of Gazprom as a global energy company is targeted at building the entire gas chain from hydrocarbons production to marketing on new markets relying on the production capacities located beyond Russia.
Within this strategy the Company maintains the cooperation aimed at developing hydrocarbon resources in Venezuela, Vietnam, India, Bolivia, Algeria, Libya and the Caspian Sea, as well as studies the possibility of participating in oil and gas projects in Egypt and Pakistan.
Cooperation
In August 2006 Gazprom and the Algerian State Oil and Gas Corporation Sonatrach signed the Memorandum of Understanding. The Memorandum sets out the following major areas of the oil and gas cooperation deepening: geological exploration, production, transportation, gas transmission and distribution systems development, asset swaps, oil and natural gas processing and marketing in Algeria, Russia and third countries.
In June 2008 the Representative Office of Gazprom was opened in Algeria.
In December 2008 Gazprom EP International (Gazprom’s wholly owned subsidiary) was announced the winner of the hydrocarbons exploration and development tender for the onshore El Assel area. Following the tender results, Gazprom signed a contract with Algeria’s National Agency for the Valorisation of Hydrocarbons Resources (ALNAFT), which came into effect on May 3, 2009. Gazprom EP International is the operator of the said project in partnership with Sonatrach. Gazprom and Sonatrach hold a 49 and a 51 per cent stakes in the project, respectively.
Project implementation
The El Assel license area is located in the oil- and gas-bearing Berkine Basin and comprises three blocks with the total space of 3,250 square kilometers.
In March 2010 Gazprom Group commenced drilling of the first prospecting well Rhourde Sayah-2 within the El Assel license area, Algeria. In parallel, the large-scale 3D seismic survey is being performed in other parts of the license area.
Gas-bearing Potential
According to the provisional estimates, the recoverable oil reserves of the El Assel area average 30 million tons.
Algeria’s proven natural gas reserves account for 4.58 trillion cubic meters (second largest in Africa after Nigeria – 5.15 trillion cubic meters). The bulk of the natural gas reserves are concentrated in the central and eastern parts of the country.
The country’s proven oil reserves amount to 1.58 billion tons (third largest in Africa after Libya and Nigeria). In the energy balance of Algeria natural gas accounts for 62.5 per cent, oil – 34.5 per cent, coal – 2.5 per cent, hydro energy – 0.5 per cent.