Sonatrach garners only $ 20.40 from a barrel of oil!

date 2016/10/16 views 400 comments 0

icon-writer By: Imène Kimouche /*-/ English Version: Med.B.

The CEO of the National Hydrocarbons Company Sonatrach, Mr. Amine Mazouzi, has received a detailed study relating to the problem of the excessive cost incurred by the Company to produce a barrel of oil in Algeria, thus making the national oil and gas Group lose more than half of its revenues, against a backdrop of the adverse effects spawned by the world oil crisis which has been going on since mid-2014.

The survey pointed to three black spots which cost the Sonatrach Group large sums of money,  with on focus a large deficit in the spare parts’ availability  and a dire lack of periodic maintenance of the machines in addition to the high rate of accidents inside production units.

This detailed study worked out by Norwegian energy experts, recommended as a result the mandatory reduction of the cost of oil production in Algeria, starting from the beginning of January 2017, in the light of the huge expenses spent by Sonatrach group regarding the production and export of the oil barrel, which is equivalent to today's average revenues of $ 20.40 dollars a barrel only, as the market price swings between $ 40 and $ 50 a barrel due to the steep downturn of the world market.

In order to cushion this scathing loss in oil-related incomes, the research study submitted for appreciation to Mr. Amine Mazouzi, called for the adoption at the earliest of a brand-new strategy based on a string of remedial measures in order to rationalize expenditure within the Sonatrach Company.

The study confirms the compulsory slashing of expenses and expenditures through the three stages, by notably reducing drilling costs and exploration, as well as development, stressing that the problem of the high cost of producing a barrel of oil in Algeria, is not due to technological backwardness, as many falsely think, but it is rather due to an unplanned spending policy within various production units and various subsidiaries of Sonatrach.

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