Algeria eyes 20bn m³/yr new gas output from bid round

: Crude oil, Natural gas
24/11/08

Algeria's recently announced licensing round could unlock around 20bn m³/yr of fresh gas production in five to ten years, head of upstream regulator Alnaft told Argus in an interview.

Speaking at Africa Energy Week in Cape Town, Mourad Beldjehem said this output figure was based on "preliminary estimates" and that initial volumes would ideally be brought online in two years. The potential production figure is equal to around 40pc of the North African country's current gas exports, which mostly go to Europe through undersea pipelines and LNG tankers.

The potential new volumes would be a huge boost in Algeria's efforts to increase its share of the European gas market after the cutoff in most piped Russian gas supplies to the continent in 2022.

The bid round, announced last month, is the first of five planned to be launched annually up to 2028. The current iteration is gas focussed and onshore, with five of the six blocks on offer containing gas discoveries and one containing a producing oil field that could benefit from enhanced oil recovery, Beldjehem said.

"Most IOCs are not ready today to [solely] invest in exploration opportunities. That's why we are offering six opportunities that are each exploration, development and exploitation," Beldjehem said.

The bid round appears designed to offer IOCs a quick return on their investment and simultaneously encourage them to carry out advance exploration work. "We need to make more discoveries to replace our reserves," he said, adding that only state-owned Sonatrach was exploring in the country today.

He said the shape and scope of the future rounds would depend on the success of the current iteration and could have different themes — be it oil or offshore focussed. Potential bidders will be able to access existing block data from 26 November, with the submission deadline set for 15 April 2025, when winners will be announced.

Beldjehem said the country's improved contractual terms under its new oil law, which came into force in 2021, were the biggest positive change compared with the last bid round in 2014, which yielded disappointing results. Executives from two western oil firms told Argus that they would be looking very closely at what is on offer.

But Algeria is also holding bilateral negotiations with several IOCs over 13 contracts, four of which could "complete before the end of the year," Beldjehem said. When asked about US majors ExxonMobil and Chevron's proposed entry into the country, he said discussions had reached the "commercial stage". Both firms are eyeing Algeria's vast shale potential, its existing oil and gas infrastructure and proximity to European markets.

Algeria has made some progress in boosting its oil and gas production capacity over the past few years. Marketed gas output hit a record 101bn m³ in 2023, but exports of 52bn m³ were still below the 60bn m³/yr levels of the mid-2000s.

By Aydin Calik

Related news posts

Argus illuminates the markets by putting a lens on the areas that matter most to you. The market news and commentary we publish reveals vital insights that enable you to make stronger, well-informed decisions. Explore a selection of news stories related to this one.

24/11/14

Bangladesh’s spot LNG purchases spike on power demand

Mumbai, 14 November (Argus) — Spot LNG imports into Bangladesh have spiked just three months into the interim government of Muhammad Yunus. The interest upsurge is the largest seen so far, and is made more compelling particularly with spot prices well above $13/mn Btu, which has sidelined even key importers such as India and China. The rise in LNG imports comes on the back of Bangladesh's power market struggling to meet electricity supply owing to unpaid power bills under the previous prime minister Sheikh Hasina's government earlier this year. Bangladesh's power generation currently has stabilised after experiencing a sharp downturn in August when the former prime minister resigned. Maximum power generation so far this month stands at an average of 12.5GW, up by 6pc on the year (s ee graph ). Bangladesh's Rupantarita Prakritik Gas (RPGCL), operating under state-owned oil and gas firm Petrobangla, is the sole LNG importer in the country. The super-chilled fuel helps to meet over 50pc of the country's electricity requirement. RPGCL floated tenders for 23 LNG cargoes since September this year including multiple reissuances, compared with just eight cargoes floated over the same period last year. RPGCL floated tenders for a total of 27 cargoes in 2023, Argus data show. These tenders were mostly awarded to four suppliers — Singapore-based Vitol Asia, Gunvor Singapore, TotalEnergies and Excelerate Energy, despite having a list of 23 companies across the globe to import LNG from. Out of the 23 LNG tenders since September this year, only nine were awarded to these four firms except for one to Japan's Jera. Other tenders were withdrawn or reissued, possibly owing to insufficient offers, Argus data indicate. The firm recently invited expressions of interest (EOI) from sellers that wish to supply delivered LNG to Bangladesh to widen its pool of participants from which it may buy spot LNG. The move could be linked to new public procurement regulations imposed by the interim government that require RPGCL to receive a minimum of three offers before it is able to award its tenders. New vs old rules The Public Procurement Rules, 2008 (PPR-2008), were set out to ensure transparency, efficiency and fair competition in the procurement of goods, works or services using public funds. This deviates from RPGCL's previous practice of following a special power and energy law that had no mandatory provision on minimum participation in tenders, a company official told Argus last month. The previous government had enacted the Speedy Power and Energy Supply (Special) Act 2010 to operate without tendering, which was mainly an impunity act based on a provision that prevented the act to be challenged in court. The enactment of raising the EOI for the new seller list by the interim government is likely to stop any monopoly or preference for a particular LNG supplier in the country. While some of the RPGCL tenders have gone unawarded in recent months owing to insufficient offers, a few of the recent tenders were heard to be awarded despite attracting just two offers, in an attempt to implement the PPR-2008 rules, according to sources with knowledge of the matter. While it is still uncertain if RPGCL would be able to garner interest from more LNG sellers across the globe at a time when it is getting back on its feet to establish strong and transparent governance, it remains to be seen if more portfolio players would want to show their willingness to support a country that is likely to be hungry for gas for decades to come as their domestic production remains weak. Gas output Bangladesh's gas production including LNG stands at 2,868mn ft³/d (29.5bn m³/yr) as of 13 November, data from Petrobangla show. There was no figure available for the same period last year for comparison. Gas output in the country has been weak since the Covid pandemic, with output falling to up to 2,306mn ft³/d, lower by 5pc on the year, Petrobangla data show. The production volumes also include LNG supply, which could meet 54pc of the gas demand of the country in 2023 ( see table ). The interim government is heard to be addressing the most pressing issues in the country, particularly relating to the oil and gas exploration industry. Petrobangla has invited bids under Bangladesh Offshore Bidding Round 2024, offering a total of 24 blocks that include nine shallow-sea blocks and 15 deep-sea blocks with both oil and gas reserves. It has extended the deadline for bid submission to 9 December 2024, from 9 September 2024 previously. By Rituparna Ghosh, Rou Urn Lee and Naomi Ong Bangladesh natural gas (mn ft³/d) Natural gas 2018 2019 2020 2021 2023 Demand 3,852 3,996 4,163 4,214 4,274 Production(domestic+imported LNG) 2,712 2,669 2,722 2,414 2,306 Shortfall 1,140 1,327 1,441 1,800 1,968 — Bangladesh energy and mineral resource division Bangladesh power generation MW Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

IEA sees wider oil market surplus next year

24/11/14

IEA sees wider oil market surplus next year

London, 14 November (Argus) — The IEA is predicting a global oil supply surplus of over 1mn b/d next year, which it says will provide "much-needed stability" to the market. The Paris-based agency's latest Oil Market Report (OMR) shows a 1.15mn b/d supply surplus next year, the highest since it first started projecting supply and demand levels for 2025 in April this year. It is 40,000 b/d higher than its estimate last month. "With supply risks omnipresent, a looser balance would provide some much-needed stability to a market upended by the Covid pandemic, Russia's full-scale invasion of Ukraine and, most recently, heightened unrest in the Middle East," the IEA said. The IEA's projected supply surplus could be much higher if Opec+ members push ahead with a plan to start unwinding 2.2mn b/d of "voluntary" production cuts from January over a 12-month period. But this is not guaranteed. Weaker-than-expected demand has already forced the Opec+ members to delay their plan to start increasing output by three months. Opec+ ministers are set to decide on their output policy for 2025 and beyond in a meeting on 1 December. The IEA's oil demand growth forecasts for this year and next remain below 1mn b/d — a steep drop compared with 2mn b/d last year and 2.5mn b/d in 2022. For this year, the IEA has raised its oil demand growth projection by 60,000 b/d to 920,000 b/d, mostly because of higher-than-expected consumption in Europe. Its forecast for next year has been nudged down by 10,000 b/d to 990,000 b/d compared with last month's OMR. Much of the slowdown in global consumption centres on China, where the economy is not growing as fast as it once did. The IEA has kept its oil demand growth for China unchanged at 150,000 b/d for this year, but this is far below the 710,000 b/d it was forecasting in January. The agency said Chinese oil demand contracted for a sixth straight month in September, pushing consumption in the third quarter 270,000 b/d below year-earlier levels. For next year, the IEA has lowered its Chinese demand growth forecast by 30,000 b/d to 190,000 b/d. China's slowing oil demand is also due to an increased uptake of electric vehicles, LNG-powered trucks and high-speed rail, the IEA said. On global supply, the IEA has trimmed its growth estimate for this year by 20,000 b/d to 640,000 b/d. But for next year, it sees supply growth accelerating to more than 2mn b/d, led by the US, Canada, Guyana, Brazil and Argentina. The agency said global observed oil stocks declined by 47.5mn bl in September to their lowest level since January. It also said preliminary data show stocks fell further in October. By Aydin Calik Supply and demand balance Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Cop: Argentina pulls delegation from Baku

24/11/13

Cop: Argentina pulls delegation from Baku

Montevideo, 13 November (Argus) — Argentina's government today withdrew its delegation from the UN Cop 29 climate summit in Baku, Azerbaijan. The country's foreign affairs ministry confirmed to Argus that the delegation had been told to leave the event, which began on 11 November and will run through 22 November. No reason was given for the decision, but it fits the general policies of President Javier Milei, who has expressed skepticism about climate change. Milei eliminated the country's environment ministry shortly after taking office in December 2023. He is also pursuing investment to monetize oil and gas reserves, with a focus on the Vaca Muerta unconventional formation. Vaca Muerta has an estimated 308 trillion cf of natural gas and 16bn bl of oil, according to the US Energy Information Administration. In October, the government created the Argentina LNG division with a plan to involve private companies and the state-owned YPF to produce and export up to 30mn metric tonnes (t)/yr of LNG by 2030. It wants to export 1mn bl of crude. The plans are closely linked to a new investment framework, known as RIGI, that will provide incentives for large-scale investments. The administration is also pushing hard for investment in critical minerals, including copper and lithium. Argentina has the world's second-largest lithium resources, estimated at 22mn t by the US Geological Survey. It has copper potential that the RIGI would help tap. The government has not specified if pulling out of Cop 29 means Argentina will withdraw from the Paris Agreement, which Argentina ratified in 2016. The country's nationally determined contribution calls for net emissions not to exceed 359mn t of CO2 by 2030. This represents a 21pc reduction of emissions from the maximum reached in 2007. By Lucien Chauvin Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

No sign of peak in CO2 from fossil fuels: Report

24/11/13

No sign of peak in CO2 from fossil fuels: Report

London, 13 November (Argus) — Carbon emissions from fossil fuels are projected to hit a fresh record high of 37.4bn t in 2024, with "no sign" that these have peaked, a team of scientists said today in the 2024 Global Carbon Budget report. Total CO2 emissions are projected to reach 41.6bn t in 2024, up from 40.6bn t in 2023, which includes emissions of around 4.2bn t from land-use change, the report found. It also estimates the global carbon budget remaining before the 1.5°C temperature limit set out in the Paris climate agreement is "breached consistently over multiple years". The remaining carbon budget "has almost run out", the report found. There is a 50pc chance that warming will exceed 1.5°C above pre-industrial levels "consistently in about six years", the report found. There is uncertainty around the estimates, largely owed to the effects of other greenhouse gases (GHGs) such as methane and nitrous oxide, it noted. The Paris accord seeks to limit a rise in global temperature to "well below" 2°C above a pre-industrial average, and preferably to 1.5°C. This year is on track to be the hottest on record , the World Meteorological Organisation said on 11 November — the opening day of the UN Cop 29 climate summit in Baku, Azerbaijan. And drought conditions have helped to reverse a recent downward trend in CO2 emissions from land-use change — such as deforestation — in 2024. Those emissions are set to rise in 2024, after falling by 20pc in the past decade, the report found. Permanent CO2 removals from reforestation and planting new trees is "offsetting about half of the permanent deforestation emissions", it added. And the report authors noted that technology-based carbon removals — typically engineered, rather than nature-based — are at current levels only able to account for one-millionth of the CO2 emissions from fossil fuels. Projections for the highest-emitting countries — China, the US and India — are mixed. China's emissions are projected to increase by 0.2pc in 2024, although the report noted that the range means they could decrease. US emissions are set to drop by 0.6pc, while India's are projected to rise by 4.6pc this year. The Global Carbon Budget report — which will be peer-reviewed — is produced annually by an international team of more than 120 scientists. By Georgia Gratton Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Trump’s win yields mixed picture for LNG market

24/11/13

Trump’s win yields mixed picture for LNG market

London, 13 November (Argus) — Global gas and LNG market participants await clarity on president-elect Donald Trump's course of action once he takes office in January, as the net impact of some of its stated policies remains difficult to gauge. Price movements in recent days show little evidence of a market reaction to the outcome of the election. Prompt and near-curve LNG prices for delivery to Europe and Asia have risen, mostly tracking the increase in European hub prices. But the change in euro-denominated hub prices appears largely unrelated to the jump in the value of the US dollar that followed Trump's win. The dollar index, which measures the dollar against a basket of six other currencies, has rallied since Trump's victory became apparent, reaching a two-year high on 13 November. The US currency was worth over €0.95 on Wednesday, up from €0.91 on polling day. This might have contributed to stronger European hub prices, albeit only slightly. Exchange rates aside, the election result was never likely to have a serious short-term impact on the LNG market. The halt to Russian gas flows through Ukraine at the end of this year, when transit and interconnection agreements between Moscow and Kyiv expire, is the variable with the most disruptive potential for European gas markets that are much more reliant on LNG since Russia launched its full-scale invasion. But a shift in US policy would not be able to exert influence on any negotiations — which remain hypothetical at present — aimed at extending gas flows through Ukraine, given that Trump is only due to take office in late January. But Trump's policies might from next year affect the LNG market. US LNG producers have expressed mixed feelings about the consequences of a second Trump administration, with a dividing line emerging between firms that already export LNG and those that want to build new export facilities. Forward gas prices at the Dutch TTF hub also appear to show a mixed picture, with contracts for delivery next year and in 2026 rising broadly in line with the near curve, while prices for delivery in the following two years have held broadly stable. Operators of existing liquefaction facilities were wary of Trump's enthusiastic endorsement of protectionist policies, which they fear could trigger another trade war with China. The president-elect has pledged to impose a 20pc tariff on all imports — except those from China, which will instead be subject to 60pc. The possibility of Beijing following suit with retaliatory tariffs on US LNG— as in 2018-19, during Trump's first term — concerns many market participants. Trump's trade war with China in 2018-19 was widely seen as detrimental to development of the industry, as it hampered trade between the largest incremental producer and consumer. But the nature of most US LNG contracts — predominantly based on free-on-board delivery — reduced the short-term impact. While physical deliveries to China did vanish in 2019, no US LNG exporter reported cancellations that year, with cargoes simply resold elsewhere or swapped with LNG from other countries. The re-emergence of similar trade disputes from next year could force another reconfiguration of trade flows, possibly facilitated by the fact Europe is now a much larger LNG importer than in 2018-19, when it was heavily dependent on Russian pipeline gas. Physical deliveries of US LNG to China fell sharply in 2022 and have still been at less than half their 2021 peak this year (see chart). But while higher than six years ago, Europe's LNG demand has not pushed beyond 2022's record, and the amount of US LNG in Chinese portfolios is also much larger. On the other hand, developers of new US liquefaction facilities have pinned their hopes on Trump's pledge to reverse the Biden's administration licensing pause, which froze projects and in some cases lost them contracts. But speeding up project approvals could result in a much more amply supplied market later in the decade, when a swathe of new facilities are already due on line (see chart) Industry figures have suggested the [LNG market could be oversupplied as early as 2028](https://direct.argusmedia.com/newsandanalysis/article/2493845. The greatest uncertainties are related to how Trump deals with the conflict in Ukraine. He has boasted he would end the war on his first day in office — overly optimistic at best. But even if his administration could bring about a swift end to the conflict, a full normalisation of relations between Russia and Ukraine is difficult to imagine. Nevertheless, a relaxation of US sanctions — including those targeting Russia's existing 19.8mn t/yr Arctic LNG 2 terminal — could be an initial bargaining chip and might result in an immediate increase in supply. By Antonio Peciccia US liquefaction capacity mn t/yr US LNG deliveries to China mn t Send comments and request more information at feedback@argusmedia.com Copyright © 2024. Argus Media group . All rights reserved.

Business intelligence reports

Get concise, trustworthy and unbiased analysis of the latest trends and developments in oil and energy markets. These reports are specially created for decision makers who don’t have time to track markets day-by-day, minute-by-minute.

Learn more