The future potential of Algerian unconventionals

Algeria has long been a prominent oil producer in Africa, ranking third after only Nigeria and Angola. The country is also the largest natural gas producer on the continent. However, as the oil and natural gas output has fallen over the past 10 years, the Algerian government is assessing what role shale gas will play in the country’s future energy exports.

Current estimates from the United States Energy Information Administration show that Algeria has the third-largest technically recoverable shale gas resources globally of just over 700 trillion cubic feet, behind only Argentina and China. Algeria’s government-owned oil and gas company Sonatrach began the search for alternatives to conventional gas in 2009, alongside international oil and gas businesses. The initial funding round in 2011 was not encouraging to say the least, with only two of the ten potential contract offers being awarded.

As a result of this a new hydrocarbons law was passed by the Algerian government, which provided energy firms with tax and contractual incentives for unconventional energy investments. A preliminary investigation of Algeria’s shale gas potential finished in January 2014, after a well was explored using hydraulic fracking technology.

After this favourable law revision was enacted the prospects of shale gas exploration improved. The latest round of bidding in 2014 saw a total of 17 of the 31 licenses on offer being for unconventional contracts, with four of these being awarded. Although far from perfect, the participation of experienced oil industry giants, such as Shell and Statoil, is a step in the right direction.

Magazine Issue 2 Cover
The full article, along with all maps and graphs, is available in Issue 2 of Shale Gas International Magazine and can be found on page 12.
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