Algeria set for first offshore blocks licencing

07 June 2012, Sweetcrude, ALGIERS – Algeria is to offer its offshore oil block to potential investors for exploration for the first  time within the next two years, Minister of Energy and Mining of Algeria, Youcef Yousfi, has said.

It is part of efforts by the country to push up production to meet its export obligations and increase domestic consumption.

Yousfi told journalists at the  World Gas Conference in Kuala Lumpur:”We are opening new regions in the south-western and northern parts of the  country to exploration [in line with] our policy to intensify  exploration in new and mature basins.”

Algeria plans to open up its offshore areas for the first time for exploration and  expects the first offshore wells to be drilled within the next two  years, according to Yousfi.

An offshore exploration licensing round will be called after the proposed amendments to the Petroleum Law have been approved.

Algeria is conducting a pilot study to determine the feasibility of a  commercial development of its vast unconventional hydrocarbon deposits,  the minister said.

Preliminary estimates show the country, an OPEC member, is home to some 8000 trillion cubic feet of shale gas and 1000  trillion cubic feet of tight gas resources in place.

The drive  towards opening up more basins for exploration comes on the heels of an  expected surge in domestic gas demand and increase in liquefaction  capacity for export markets in Algeria.

Domestic gas demand is  expected to as much as double within the next two years along with  increasing needs for power generation, residential and industrial use.

“We are generating over 95% of our electricity from natural gas and demand  for power is increasing by at least 7% to 10%,” Yousfi told reporters.

Natural gas will be introduced to more households, with the aim of raising the  penetration rate of 70% from the present 50% before 2020.

Meanwhile, Algeria expects to more than double its capacity to export 90 billion  cubic metres per annum of liquefied natural gas with two new plants  coming into operations by 2014.

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