2003 a $24 Billion Record Oil Export Year as Algeria Targets 50% Increase by 2005

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Researched by Industrialinfo.com (Industrial Information Resources, Incorporated; Houston, Texas). With the best results since its creation forty years ago, Algeria's state oil and gas giant, Sonatrach has confirmed record export revenues of $24 billion in 2003. This represents an increase of 33% over 2002. The country's hydrocarbons exports account for 95% of foreign revenue.

Sonatrach CEO, Mohamed Meziane said that the company planned to produce 1.5 million barrels per day of oil in 2005 and grow output to two million barrels per day by 2010. Sources in the oil trade report that Algeria, the second smallest producer in OPEC, is now producing one million barrels per day, which is well above its OPEC quota of 782,000 barrels per day. Algeria has formally asked OPEC for a larger share.

Meziane said that the 23 new production contracts awarded in the past three years provided adequate output to meet 1.5 barrels per day in 2005. He added that Sonatrach aimed to export 85 billion cubic meters of natural gas in 2010 moving up to 120 billion cubic meters by 2020. Algeria is one of the main suppliers of gas to Europe.

Parallel to these output targets Algeria has issued tenders to upgrade its oil refineries including the eastern port of Skikda (PEC 83000039/51), which currently produces 335,000 barrels per day. The main refinery in Skikda contributes 84% of the 14 million tons exported. National Petroleum Refining Company (Naftec) (PEC 83000024/52/56) a subsidiary of Sonatrach, operates five plants with a total annual output of 22 million tons.

National and international tenders have been launched for the renovation and modernization of nearly all Naftec's facilities with a total investment plan of $1.1 billion to be completed by 2009. Planned renovation would cost $500 and adapting production tools will need a further $600 million. Naftec's Salah Cherouana said that the company remained open to proposals regarding the financing of the investment program and that the legislation was flexible regarding the potential for partnerships on projects.

Rehabilitating the Skikda refinery includes constructing and operating two units of atmospheric distillation, a unit of catalytic reforming, and two units for the separation of LPG.

In an export related project Sonatrach (PEC 83000033) and Spanish oil group Cepsa (PEC 76000092) will lead a consortium to build a second gas pipeline between Spain and North Africa. $600 million will be invested in the pipeline running between Spain and Algeria, reports Trade Arabia. The pipeline is due to be finished at the end of 2005 and will have an initial capacity to transport 8 billion cubic meters of natural gas per annum.

Cepsa (MADRID: CEP) (Madrid, Spain) and Sonatrach will each retain 20% in the construction company Medgaz and the remaining 60% is divided equally between the Spanish utilities Endesa (MADRID: ELE) and Iberdrola (MADRID: IBE), the French firms Total (PARIS: TOT) and Gaz de France (PARIS: GDFP) and Britain's BP (LSE: BP).