Algeria Oil and Refining Industry
Algeria started oil production in 1958. It joined the Organization of the Petroleum Exporting Countries (OPEC) in 1969. Sitting atop 12.2 billion barrels of oil in place, the African nation comes 16th in the world in terms of oil reserves. With an output of 1.058.7 mb/d, Algeria is the third largest African oil producer, behind Nigeria and Angola. Algeria is also producing 280,000 b/d of condensate and 340,000 b/d of natural gas liquid (NGL). Algeria’s refining capacity also stands at 651,000 b/d. Algeria depends on oil sales for 95% of its exports. Twenty-five percent of its GDP and 65% of revenues envisioned in its budget come from crude oil sales. In other words, oil is the pillar of Africa’s economy Official data show that Algeria’s crude oil production has seen ups and downs during the past two decades. Algeria’s crude oil production reached its highest level in April 2008 (1.408 mb/d), while the lowest level was recorded in February 2002 (775,000 b/d).Algeria hopes to invest 453 billion in its upstream oil sector up to 2022 and lift its crude output 30%. Algeria Oil Output (2002-2018) Algeria’s national oil and natural gas company (Sonatrach) holds about 80% of hydrocarbon production in this country. Sonatrach is responsible for exploration, production, transfer, refining, marketing and sale of oil in Algeria.Sonatrach was established on 31December 1963 by the then Algerian government. In the first agreement signed for oil exploration, Sonatrach had only a 4.5% share. France’s energy giant Total owned a 67.5% share. Sonatrach is currently Africa’s largest oil company and the world’s 11th largest. Sonatrach also operated projects outside the Algerian territory to become an international oil company. It is investing in Africa (Mali, Niger, Libya and Egypt), Europe (Spain, Portugal, Italy and Britain), Latin America (Peru) and the United States. The main foreign companies involved in Algeria’s oil and gas projects are Cespa, BP, Eni, Repsol, Statoil and Anadarko. Algeria’s oil is of good quality due to low sulfur content. The ageing oil fields in this country are mainly located in the eastern zones near the border with Tunisia and Libya. Algeria’s largest oil field is Hassi Messaoud with 3.9 billion barrels of oil in place. Located near the border with Libya, it covers an area of 800 square kilometers. With an output of 500,000 b/d, Hassi Messaoud makes up about 70% of Algeria’s oil production. Other important oil fields in Algeria are Hassi R’Mel with 3.7 billion barrels and Ourhoud with 1.9 billion barrels. Algeria’s crude oil exports currently stand at 633,000 b/d. Europe receives 76% of Algeria’s crude oil. The rest goes to America (17%) and Asia and Oceania (7%). The main crude oil in Algeria is Sahara Blend, which is a combination of categories of crude oil recovered from Hassi Messaoud. The US was Algeria’s main destination for crude oil exports up to 2013. But after increased shale oil production in the US from the Bakken and Eagle Ford fields whose oil spec is similar to Algeria’s, the US oil imports from Algeria dropped significantly, falling from 443,000 b/d in 2007 to 31,000 b/d in 2015.Algeria Oil DestinationsAlgeria currently operates five refineries