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.
