Algeria: Sonatrach will keep drilling despite protests

Oil Pump Jack
Source: DollarPhotoClub

Despite Algerian Prime Minister’s Abdelmalek Sellal’s recent assurances that shale exploration is not on the government’s agenda, the country’s state-owned oil company Sonatrach will not stop drilling for shale in In Salah.

“Asking the cessation of drilling at In Salah, is asking to stop drilling throughout the country,” said Sonatrach’s interim CEO, Said Sahnoun.

“We will not stop the drilling activity” of shale pilot wells in In Salah said Mr. Sahnoun at a news conference Sunday in Algiers.

“Sonatrach in a few days will start drilling a second pilot well for shale gas at Ahnet (near In Salah) after the first one in the same basin,” he said.

“We are about to finish this work, it’s a matter of days. As soon as we finish, the apparatus (for drilling) will be transported to another site of exploration for which it is programmed,” he added without identifying the name of the second basin which will be subject of exploration after that of Ahnet.

In the past, the government has downplayed the risks of grass-root opposition to shale development in the country. Minister of Energy and Mines Youcef Yousfi said in September that hydraulic fracturing – the controversial technique involving pumping water with sand and chemicals into the ground at high pressure to fracture the shale rock and release the gas – has been used by Sonatrach for years to optimize crude extraction from the giant Hassi Messaoud oilfield – without any obvious environmental damage.

At the time, Mr Yousfi accused environmental protesters of trying to undermine Algeria’s right to its own resources, saying: “These attempts to demonize shale production target countries that advocate energy nationalism to assert sovereignty over their natural resources.”

However, contrary to the government’s assumption, opposition to shale gas in Algeria turned out to be strong. Since the beginning of the year, protests have raged in the Algeria’s southern region, where Sonatrach’s drilling is taking place. In January, 2,000 people demonstrated in the city of Tamanrasset, with smaller demonstrations near the towns of In Salah. The unrest has continued with the protesters now threatening to carry their demonstrations to the actual desert drilling sites.

According to the U.S. Energy Information Agency (EIA), Algeria has 707 trillion cubic feet of estimated technically recoverable shale gas. According to Sonatrach’s own estimates, Algeria should drill 200 wells per year to be able to produce 20 billion m3 annually.

The country relies heavily on oil and gas revenues, with oil accounting for over 95% of export earnings, but the country’s conventional resources are depleted, with its oil production declining from a peak of nearly 2 million b/d in 2006 to 1.57 million b/d in 2013, according to the BP Statistic Review of World Energy. Tapping the abundant shale resources could easily solve Algeria’s energy problems, but not, it seems, without first gaining public acceptance.

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