A Review of the Nigerian Energy Industry

Algeria offers incentives for exploitation of shale resource

03 August 2012, Sweetcrude, ALGIERS –THE Algerian government is offering fresh incentives, including tax breaks and sharing of costs and risk, to lure more international players to exploit its shale resource potential, according to a report.

Shell and ExxonMobil initiated discussions recently on shale gas exploration in the North African country, which signed a similar deal with Eni of Italy last year.

Algeria is looking to enlist foreign majors to help state-owned Sonatrach develop technology-intensive shale gas, as well as drive offshore production, to help ensure long-term security of supply for the OPEC member and gas exporter.

“For conventional resources, partners are alone in taking the exploration risk. For shale resources, we want to make (terms) attractive by allowing Sonatrach to take a share of the risk,” Abdelhamid Zerguine said in remarks carried by the official APS news agency, Reuters reported.

Zerguine was referring to the introduction of amendments to Algeria’s hydrocarbons law planned for this year.

“It (the amended law) should yield more benefits for foreign investors” who venture into shale energy resources than for those in conventional resources, APS quoted him as saying.

The amendments also are to include definitions of shale resources and rules for investors who make a shale discovery while seeking conventional hydrocarbon resources.

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  • I have not heard the Nigerian leadership offering any prospective investor any incentive lately to invest in the development of any sector of the economy. Is it possible that the government has extended the contempt with which it relates with the governed to prospective investors. Bad habits, bad character is very difficult to hide.