Despite significant potential for exploration, we believe that unless new basins (or large fields in existing basins) are discovered, Algeria’s oil reserves will fall from 2014 and beyond. This decline could be further exacerbated by growing oil and gas output, in addition to a lack of foreign investment in the industry – a symptom of the country’s unfavourable tax regime. The mooted reform of Algeria’s hydrocarbons law is, therefore, likely to be welcomed by foreign operators and should revive the country’s moribund upstream segment. The key trends and developments in Algeria’s oil & gas sector are:

• After three rather disappointing bidding rounds, with only nine blocks attracting winning bids out of the 36 licence areas auctioned since 2008, Algeria”s energy minister, Youcef Yousfi, stated on December 7 2011 that the country is to review its energy legislation. The next version of the national hydrocarbons law is expected to enhance the regulatory environment across the oil & gas sector. According to Yousfi, the measures that are expected to be included in the coming reforms suggest that taxes will be calculated based on the profit from a project instead of turnover. However, the rule that requires state-owned Sonatrach to hold a 51% stake in all upstream projects will be retained, as will the non-deductible windfall profit tax (WPT) imposed on international investors.
• BMI forecasts that oil production will rise from an estimated 1.88mn barrels per day (b/d) in 2011 to 1.99mn b/d in 2021, as ambitious new projects, mostly located in the Berkine basin, come onstream. Production will be further boosted by increased output at major fields such as Hassi Messaoud, and by enhanced recovery rates.
• Consumption of crude is forecast to rise steadily at an average annual growth rate of 3.35% between 2011 and 2021. This is partly in line with the expected GDP growth rate, although we expect energy intensity to increase towards the end of our 10-year forecast period. We anticipate that crude consumption will rise from an estimated 402,000b/d in 2011 to 559,000b/d by 2021.
• BMI forecasts that gas production will increase from an estimated 85.00bn cubic metres (bcm) in 2011 to 142.42bcm by 2021, as ambitious new projects, mostly located in the Ahnet and Illizi basins, come onstream. Production will be further boosted by increased output at major fields such as Hassi R’mel and by enhanced recovery rates at the In Salah Gas Project.
• Gas demand is set to rise steadily on the back of solid economic growth. BMI forecasts average annual growth of 5.36% from 2011 to 2015, with consumption forecast to rise from an estimated 30.26bcm in 2011 to 51.18bcm in 2021.
• Unless sizeable fields are discovered in existing basins – including Erg Occidental-Ahnet, Erg Oriental-Berkine, Illizi and In Salah, which all have substantial discovery potential – oil reserves will fall from 2014 onwards. Another alternative is that new basins may be discovered in the north of the country or in the Mediterranean. Oil reserves are forecast to peak at 12.50bn barrels (bbl) in 2012-2013, with gas reserves to peak at 4.8trn cubic metres (tcm) in 2014. However, there is a substantial upside risk to recoverable gas reserves, in the form of vast untapped shale resources.
• In terms of infrastructure, several upgrades at the Skikda, Arzew and Algiers refineries are expected to come onstream, with additional capacity from a proposed greenstream refinery expected towards the end of our 10-year forecast period. Algeria’s dependence on energy prices leads to high volatility in the country’s export revenues. Our anticipation of tight supply due to booming demand in emerging markets is an opportunity on which the country could capitalise. We forecast OPEC basket oil prices to increase from an estimated US$107.52 per barrel (bbl) in 2011 to US$111.47/bbl in 2012, thus creating upside risk to the Algerian macroeconomic outlook.

Published: July 2012                        No. of Pages: 93                         Price: US $ 1175

Algeria Oil and Gas Market

Table Of Contents

BMI Industry View
SWOT Analysis
Algeria Oil And Gas Swot .
Global Energy Market Outlook .
Table: Oil Production Forecasts, 2010-2016 (‘000 b/d)
Table: Oil Consumption Forecast, 2010-2016 (‘000 b/d)
Regional Energy Market Outlook
Algeria Energy Market Overview
Table: Algeria – Upstream Projects Database .
Industry Forecast Scenario .
Oil And Gas Reserves
Table: Algeria Oil & Gas – Historical Data And Forecasts, 2009-2016
Table: Algeria Oil & Gas – Long-Term Forecasts, 2014-2021 .
Oil Supply and Demand
Gas Supply And Demand
Export Revenues
Key Risks To BMI’s Forecast Scenario
Oil And Gas Infrastructure
LNG .
Oil Refineries
Table: Refineries In Algeria
Gas Pipelines
Regional and Country Risk/Reward Ratings .
Table: Upstream Risk / Reward Ratings
Table: Downstream Risk / Reward Ratings
Algeria Upstream Rating – Overview
Algeria Upstream Rating – Rewards
Algeria Upstream Rating – Risks .
Algeria Downstream Rating – Overview
Algeria Downstream Rating – Rewards .
Algeria Downstream Rating – Risks .
Competitive Landscape .
Table: Key Players In The Algerian Energy Sector
Overview/State Role
Licensing and Regulation
Government Policy .
Licensing Rounds
International Energy Relations
Table: Key Upstream Players .
Table: Key Downstream Players .
Company Monitor .
Enterprise Nationale Sonatrach
Anadarko Algeria
Eni Algeria Production
Algeria Oil & Gas Report Q3 2012
© Business Monitor International Ltd Page
BP Algeria
Total
Repsol Algeria
BHP Petroleum (Algerie)
CEPSA
Statoil Algeria
Hess – Summary
Maersk Oil – Summary
Royal Dutch Shell – Summary
ConocoPhillips – Summary
BG Group/Gulf Keystone Petroleum – Summary
Talisman Energy – Summary
Gazprom – Summary
Others – Summary
Africa Regional Appendix
Table: Oil Consumption Historical Data & Forecasts, 2009-2016 (‘000b/d) .
Table: Oil Consumption Long-Term Forecasts, 2014-2021 (‘000b/d)
Table: Oil Production Historical Data & Forecasts, 2009-2016 (‘000b/d)
Table: Oil Production Long-Term Forecasts, 2014-2021 (‘000b/d)
Table: Refining Capacity Historical Data & Forecasts, 2009-2016 (’000b/d)
Table: Refining Capacity Long-Term Forecasts, 2014-2021 (‘000b/d)
Table: Gas Consumption Historical Data & Forecasts, 2009-2016 (bcm)
Table: Gas Consumption Long-Term Forecasts, 2014-2021 (bcm) .
Table: Gas Production Historical Data & Forecasts, 2009-2016 (bcm)
Table: Gas Production Long-Term Forecasts, 2014-2021 (bcm) .
LNG Net Exports Historical Data & Forecasts, 2009-2016 (bcm)
LNG Net Exports Long-Term Forecasts, 2014-2021 (bcm) .
Methodology And Risks To Forecasts
Oil And Gas Risk/Reward Ratings Methodology
Ratings Overview
Table: Bmi’s Oil & Gas Business Environment Ratings – Structure
Indicators
Table: Bmi’s Oil & Gas Upstream Ratings – Methodology .
Table: Bmi’s Oil & Gas Business Environment Downstream Ratings – Methodology
Glossary Of Terms
Table: Glossary Of Terms
BMI Methodology .
How We Generate Our Industry Forecasts .
Energy Industry .
Cross checks .
Sources . 92Table: Historic Rents – (USD per m/month)
Table: Net Yield (%)
Table: Terms of Rental Contract/ Leases Mid
Table: Forecast Rents (USD per m/month)
Table: Forecast Net Yield (%)
Table: Argentina Construction And Infrastructure Industry Data
Table: Argentina Construction And Infrastructure Industry Long Term Forecasts
Table: Argentina Economic Activity
Table: Latin America Real Estate Risk/Reward Ratings
Table: BMI Business And Operation Risk Ratings
Table: BMI Legal Framework Rating
Table: Labour Force Quality
Table: Trade And Investment Ratings
Table: Argentina”s Population By Age Group (”)
Table: Argentina”s Population By Age Group (% of total)
Table: Argentina”s Key Population Ratios
Table: Argentina”s Rural And Urban Population