(MEBG) - ENI has been present in Algeria since 1981 and today accounts for about 5 percent of the country’s oil output. Its main oil fields are located in Bir Rebaa.
Although facing strong competition in Algeria’s oil sector from other foreign oil companies notably BHP, nevertheless it maintains a strong positions.
Oil & Gas Exploration
The company signed in 1999, a two new agreements with Algeria’s Sonatrach, the first involving exploration in block 403d which located in the Sahara ( Agip and Sonatrach are already producing 43,000 bpd of oil in block 403, and are expected to rise to 70,000 bpd); the second one concerns block 222b.
ENI strengthened its positioning by purchasing two blocks, deep in the Sahara for $127 million – 401a and 402a. Its share in each is 41.25 percent. That agreement increased ENI’s recoverable reserves by 52.5 million barrels, 8.8 of which are proven. By 2003 it is expected that the daily production from these fields, will increase from 18,000 bpd to 51,000 bpd.
ENI and Sonatrach are planing to widen their co-operation. ENI will allow Sonatrach to participate in its operations outside Algeria, and Sonatrach will allow ENI improved access to its reservoirs. The first result is M.O.U already signed by both for the mutual exploration and production of hydrocarbons in Yemen.
ENI. has already four production permits in Algeria all are deep in the Sahara: Bir Rebba north and south and west and ROM. In this content it should be mentioned that, ENI was the first foreign company to sign a production sharing agreement for hydrocarbon exploration and production activities in Algeria when the upstream sector was reopened.
Thereafter the production sharing agreement was redefined for the residual area of Block 403—denominated 403a—there have been discovered four fields: ROM, Bir Rebaa North, Bir Rebaa West and Bir Rebaa South West, for which production permits have been acquired. Presently ENI's oil equity from these fields amounts to approximately 20,000 barrels/ day.
Exploration permits have been acquired for the In Amedjene area (Block P213), in the Sahara desert 400 km from Bir Rebaa and also for the Wadi-El-Teh area (Block 440).
In May 1999, ENI, through its subsidiary Agip Exploration BV and Sonatrach signed a Memorandum of Understanding on joint hydrocarbon exploration and production. The agreement extends the co-operation between the two companies to joint investments in exploration activities outside of Algeria; moreover, thanks to the agreement, co-operation between ENI and Sonatrach in hydrocarbons exploration and production in Algeria will be reinforced.
Following this, through its subsidiary Agip Algeria Exploration BV, and Sonatrach signed two production-sharing contracts for hydrocarbon exploration and production. The first contract inaugurates new exploration activity in Block 403b and with the second contract Agip Algeria Exploration BV is awarded Block 222. The two Blocks are located about 700 km south of Algiers in the Sahara desert. Block 222 is located in a hydrocarbon high potential area adjacent to important discoveries previously made by Sonatrach and already equipped with production facilities. The contracts signed are part of an important cooperation agreement between ENI and Sonatrach, whereby Sonatrach participates in exploration activity in Yemen.
In September 1999 ENI, through its subsidiary Agip Yemen BV, signed an agreement to transfer to Sonatrach a 40 percent interest in Gardan Block 3 permission, located in south Yemen.
In July 1999 ENI, through its subsidiary Agip Algeria (Exploration) BV, reached an agreement to purchase interests from Lasmo plc (13 percent) and from Anadarko (27.5 percent) in blocks 402a and 401a located in the Berkine Basin of Algeria's Sahara desert, where another international oil company is the operator of the Blocks. The sale of the interests is subject to the preferential right to match the offer by Sonatrach, the Algerian national oil company, and to the approval of the state authorities of Algeria.
Algeria is Italy’s greatest gas supplier through ENI. ( in 1998 it purchased from Algeria about 2 billion bcm of LNG that accounts a third of Italy’s gas acquisitions). In the 1970's, ENI/Snam reached an agreement with Sonatrach for the supply of Algerian natural gas to Italy. Deliveries of natural gas started in 1983, through the Transmed System.
The gas line has a total length of over 2300 km from the Algerian Hassi R'Mel field to Northern Italy, crossing Tunisia and the Mediterranean Sea, at maximum depths of over 600 meters in the Channel of Sicily. In 1991 an agreement was reached with Sonatrach to increase gas supplies to 19.5 billion cm/y and the capacity of the Transmed gas pipeline was expanded. In addition, Snam imports 2 billion cm/y of LNG delivered to the Panigaglia terminal.
In May 1999, ENI, through its subsidiary Agip Exploration BV and Sonatrach signed a Memorandum of Understanding on joint hydrocarbon exploration and production. The agreement extends the co-operation between the two companies to joint investments in exploration activities outside of Algeria; moreover, thanks to the agreement, co-operation between ENI and Sonatrach in hydrocarbons exploration and production in Algeria will be reinforced.
Following this, ENI, through its subsidiary Agip Algeria Exploration BV and Sonatrach signed two production-sharing contracts for hydrocarbon exploration and production. The first contract inaugurates new exploration activity in Block 403b and with the second contract Agip Algeria Exploration BV is awarded Block 222. The two Blocks are located about 700 km south of Algiers in the Sahara desert. Block 222 is located in a hydrocarbon high potential area adjacent to important discoveries previously made by Sonatrach and already equipped with production facilities. The contracts signed are part of an important cooperation agreement between ENI and Sonatrach, whereby Sonatrach participates in exploration activity in Yemen.
In September 1999 ENI, through its subsidiary Agip Yemen BV, signed an agreement to transfer to Sonatrach a 40 percent interest in Gardan Block 3 permission, located in south Yemen.
In July 1999 ENI, through its subsidiary Agip Algeria (Exploration) BV, reached an agreement to purchase interests from Lasmo plc (13 percent) and from Anadarko (27.5 percent) in blocks 402a and 401a located in the Berkine Basin of Algeria's Sahara desert, where another international oil company is the operator of the Blocks. The sale of the interests is subject to the preferential right to match the offer by Sonatrach, the Algerian national oil company, and to the approval of the state authorities of Algeria.
Engineering and Oilfield Services
In the engineering and oilfield services sector Snamprogetti and Saipem implemented several projects in Algeria. In addition to the engineering and construction of the Algerian section of the Transmed System, from Hassi R'Mel to Houed Es Saf Saf, the two companies also carried out the Gasoline Recovery and Gas Reinjection Facilities at Rhourde Nouss and the Oil Production Center at Bir Rebaa North as well as various pipelines, including the Hassi R'Mel-Arzew Natural Gas Pipeline (507 km) and the Hassi R'Mel-Skikda Natural Gas Pipeline (575 km).
Snamprogetti carried out other turn-key projects including the Skikda refinery, the West Algeria-Morocco Gas Pipeline (263 km) and the Skikda HDPE plant. The company also provided engineering services for the Rhourde Chouff and Rhourde Hamra Gas Field Development project, the Hamra Gas Processing Complex and several pipelines, including the Hassi R'Mel-Arzew Condensates Pipeline (516 km) and the Mesdar-Haoud El Hamra-Skikda Crude Oil and Condensates Pipeline (758 km).
© 2000 Mena Report (www.menareport.com)
