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 SONATRACH AN INTERNATIONAL GAZ AND PETROLEUM GROUP |
 A far-reaching scope |
Sonatrach is the algerian oil and gas company. According to the Petroleum Intelligence Weekly, it is ranked as the twelveth company in the world. It is the first oil company in the Mediterranean, the fourth world largest exporter of natural gas and the second one for LPG.
| A leading role |
Upon its creation in december 1963, Sonatrach role was, essentially, to contribute in the national development of algeria. It was mostly targeted to generate external payment means, but also to meet the existing and future hydrocarbons requirements of algeria.
| An impressive growth |
For purposes of maximizing the long term value of the algerian hydrocarbons resources, Sonatrach undertook a tremendous development of activities. Production has been multiplied by four since 1970 and is expected to be twice as much by 2007.
Significant assets
A highly qualified human potential.
A very competitive and attractive law on hydrocarbons.
An important reserve base.
Sedimentary basins with a high potential and still largely under-explored.
An expertise of thirty years operations in field exploitation and development.
A great experience in gas industry.
A privileged geo-economic situation, neighbouring the important European Union market and open to the remainder of the world.
A most positive partnership track record.
| DRILLING |
The sedimentary basins of algeria lie over more than one million and a half square kilometers.
1956: Discovery of the largest fields: Hassi-Messaoud, Hassi-RÕmel.
algeria has been ranked among the leading discoverers since 1994.
Over the last five years, more than 5 billion barrels were discovered.
Identification of two giant fields, Orhrourd and Hassi-Berkine South.
The discoveries recently jointly made with partners have enabled algeria to renew its hydrocarbons reserves level of 1971, that is 5 billion toe.
drilling engineering programs and conduct of drilling operations ;
production of liquid and gaseous hydrocarbons, as a key activity within the company.
As a general rule, performance is the key word in the search for dynamic, diversified and alliances along the whole hydrocarbons chain.
| EXPLOITATION OF HYDROCARBONS |
This activity is the basic driving activity around which all the other activities of Sonatrach revolve. The main objectives are targeted towards the underkating of:
studies related to the assessment and the discovery of hydrocarbons reserves ;
technico-economic studies as well as monitoring and execution of works related to surface facilities and non-petroleum works
| EXPLORATION & PROSPECTION |
algeria has a vast committed sedimentary areas. Most of the oil and gas fields discovered, so far, are located in the eastern part of the Saharian platform. This is where most exploration works have been concentrating for more than twenty years. Aware of the need to valorise the other areas of the mining territory, Sonatrach has launched promotion campaigns for new exploration acreages located in the south-western part of algeria, the Atlas and the South-East of Constantine. The law 86-14 which was adopted in 1986 and supplemented in december 4, 1991 by law 91-21.
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| TRANSPORTATION OF HYDROCARBONS |
This activity relates mainly to the development, the management and the operating of the transportation network, as well as to the storing, the delivery and the loading of hydrocarbons. Today, there are 11 gas pipelines and 14 oil pipelines, over a total distance of 13 000 km
In addition to the main lines, there exist:
an interconnection system with interlines and interstations to secure and provide flexibility of supplies ;
specialised maintenance units ;
a qualified pipe maintenance support.
| ENRICO MATTEI & PEDRO DURRAN FARRECC |
The international transport dimension was reasserted by the start up of operations of the Enrico Mattei pipeline connecting algeria to Italy, through Tunisia and the Sicily Strait. With a capacity of 24 billion cm/year, this pipeline could reach 30 billion cm/year with the addition of two other compression stations. On the other hand, the start up of operations of the Maghreb Europe Pipeline (Pedro Durran Farrecc) in november 1996 reinforced the position of Sonatrach on the international markets. This pipeline delivers natural gas to Spain and Portugal, through Morocco.
In its final phase it is expected to transport 18.5 billion cm/year.
| GAS LIQUEFACTION & HYDROCARBONS TRANSFORMATION |
algeria is a pioneer in natural gas liquefaction industry and, very early, put in place extensive facilities for the LNG international trade.
In order to pursue the valorization of gas, more efforts were targeted towards:
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the recovery of helium and azote which are components of flash gas in LNG plants ;
the use of compressed gas as vehicles fuel ;
the production of synthetic fuels (kerosene, naphta, gas oil) from natural gas ;
valorization of ethane and butane through cracking processes and to obtain ethylene and propylene ;
the production of MTBE (Methyl Tertio Butyl Ether) as a substitute to lead ;
valorization of isobutane and normal butane which, by hydrodegeneration, allows better feedstocks for the petrochemical industry.
| LNG-LPG THE MAJOR PROJECTS |
In 1998, 34 years after the start up of the first LNG plant in Arzew, Sonatrach completed the upgrading of its gas units and the re-establishment of the installed contractual capacity, that is 30.5 billion cm of gas.
Regarding LPG, the investments made to construct fields recovery facilities and separation units allow to foresee a mid-term (1997-2001) quasi-doubling of butane and propane supply, which will rise from 5.5 to 9.8 Mt in 2001, with a sustained level of 10 Mt until 2010. These forecasts can be higher given the significant potential of the Berkine Basin which is being developed with partners.
| Exports |
Given the privileged geo-economic situation of algeria, Sonatrach has developed a strong commercial relationship with Western Europe and the United States and is particularly interested in the Mediterranean countries and the Maghreb.
see table
| A GROWING PETROLEUM GROUP |
With the new laws adopted recently and the new project of law for the hydrocarbon sector, the role of Sonatrach will focus on thefollowing strategic actions:
prospection, exploration and exploitation ;
development, operating and management of transportation, storing and loading facilities ;
transformation and refining ;
marketing ;
natural gas liquefaction, processing and valorization of gaseous hydrocarbons ;
setting up of any form of joint-venture activities inside and outside algeria, with algerian or foreign companies ;
a constant supply of hydrocarbons for domestic purposes ;
the search for the promotion and the valorization of any other energy form and source ;
the development of any activity being directly or indirectly connected with the hydrocarbons industry.
The strategic objectives of Sonatrach are based upon
A continuous control over its core business.
The reinforcement of its management and technological capacities
A real partnership and international expansion.
The diversification of its activities portfolio.
| A NEW ORGANIZATION |
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| National Compagny for Oil Products Distibution |
National Compagny for Oil Refining |
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| National Compagny for Wells Works |
National Compagny for Major oil Works |
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| National Geophysical Compagny |
National Compagny for wells Services |
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| National Compagny for Petrochemicals |
National Drilling company |
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Sonatrach is, today, the driving engine for the algerian economic development. It is not only the national company generating revenues for the state, but it is also, and mostly, a performing industrial and services pole.
Early 1998, Sonatrach Group was commissioned by the Energy National Council to cover a whole range of new activities such as refining, petrochemicals, distribution and oil services.
As a consequence of that, Sonatrach, today, holds the entirety, or the main part, of the capital in the distribution, refining and petrochemicals companies such as: NAFTAL, NAFTEC and ENIP, ENGTP, ENAFOR, ENAGEO, ENTP and ENSP.
| A SUCCESSFUL PARTNERSHIP |
In 1991, and With the modifications of the law on hydrocarbons, Sonatrach negotiated and entered into partnership schemes with major companies, on already discovered oil and gas fields.
ARCO, for the exploitation of Rhourde-El-Baguel field.
TOTAL and REPSOL for the development and the exploitation of Tin-FouyŽ-Tabankort gas cap.
BP for the development and exploitation of In-Salah dry gas fields.
AMOCO, for the exploitation of gas fields located in the area of In-Amenas, South-East of Hassi-Messaoud.
Sonatrac include also; AGIP, CESPA, ANADARKO, Halli Burton, and much more as framework for joint-ventures with foreign companies centered around three objectives:
To renew the exploration effort ;
To develop discovered but still unexploited fields ;
To improve the recovery factor of reserves in place for fields under exploitation.
The large discoveries made by Sonatrach and its partners (AGIP, Petrocanada, BHP, Anadarko, CEPSA) in the Berkine and Illizi Basins demonstrate and confirm the high potential of the algerian mining territory. Much more is still to be discovered.
All these successful partnerships will generate an increase of production of 35 %, that is a rise from 181 million toe in 1997 to more than 244 million toe in 2002.
With the development of the giant fields which have been recently discovered, the oil production will exceed 1.4 million barrels/day by the next century, whereas gas production will reach 150 billion cm.
| PROMISING PERSPECTIVES |
Sonatrach's medium-term commitment is to reach significant success in downstream activities and mainly in the petrochemical industries using natural gas and LPG as feedstock. Sonatrach extensive experience over the entire oil industry chain made possible, and at the same time necessary, the expansion of its activities towards international investment schemes and export of services, both upstream (prospection, exploration) and downstream where real joint-venture opportunities exist
The company's commitment to establish a real process of modernisation and expansion, translates the ambition of Sonatrach to adapt to the world oil industry changes and to reinforce its dynamic position for the next century.
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| Product |
1995 |
1996 |
1997 |
1998 |
1999 |
2000 |
Crude oil |
15.42 |
18.17 |
17.35 |
19,3 |
19,3 |
21,4 |
NGL (condensate) |
17.44 |
18.16 |
17.85 |
17,3 |
17,1 |
17,7 |
Refined products |
14.64 |
13.91 |
15.81 |
14,1 |
14,9 |
14,9 |
Natural gas |
18.58 |
20.08 |
22.88 |
26,4 |
32,1 |
32,9 |
Liquefied natural gas |
17.59 |
19.63 |
24.07 |
24,5 |
26,0 |
26,6 |
Liquefied petroleum gas |
4.03 |
4.52 |
5.82 |
6,8 |
7,8 |
8,5 |
Total |
87.70 |
94.47 |
103.78 |
108,3 |
117,2 |
122,1 |
(In millions of toe) |
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© World INvestment NEws, 2002.
This is the electronic edition of the special country report on algeria published in Far Eastern Economic REVIEW.
November 28th, 2002 Issue. Developed by AgenciaE.Tv |
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