The state-owned Algerian oil giant Sonatrach has announced that it has awarded exploration and productions contracts for three areas in a licensing round in the North African country.
The three bid winners were consortia led by the supermajors Total (France), Repsol (Spain) and China’s CNOOC.
The most coveted block, Ahnet, was awarded to the Total consortium. The area includes seven exploration blocks is considered to have the most potential due to its location and the prospect of huge volumes of natural gas being discovered.
The numbers of discoveries that have been made in this area to date are 11, with 47 wells drilled. The type of hydrocarbon in this area is dry gas. The area of this block is 17358 square kilometres.
Due to its strategic size and potential reserves, Algeria requests that bidding on Ahnet was restricted to companies that are already developing international gas projects on the same scale.
The area is already operated by Algerian state energy Sonatrach, which will cede a minority stake to the winning bidder. Algerian officials say the area’s geology is challenging, with low rock permeability.
Capital expenditure of between US$2.8 billion and $3.5 billion in the initial phase is needed. Sonatrach has committed to build a pipeline from Ahnet to the country’s main energy hub at Hassi Messaoud in time for first gas production, which is expected in 2014.
The second licence concerns the South Illizi basin, and was awarded to a consortium led by Repsol. The hydrocarbon type in this area is gas, condensate with some oil. 15 discoveries have been to date with 65 wells drilled. It includes 2 blocks of 5641 square kilometers.
The CNOOC-led consortium, won the Hassi Bir Rekaiz. The hydrocarbon type in this area is oil, and it includes 4 blocks, of an area 5,670 sq km.
The signing of the contracts will be on January 20, 2010.
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