Hefty Return of Italian Energy Company “Eni” to Algeria At All Levels

Figures from the Italian company Eni’s financial results for the year 2016 show a strong return of the energy giant to Algeria, years after the “cyclone” that hit Algeria and Eni’s Saipam subsidiary in what was known as a $ 200 million bribe scandal.

The Board of Directors of the largest Italian company travelled to Algeria last March, and moved to the southern region of Bir Rebaa North, east of Hassi Messaoud, where they held a board meeting, the first of its kind outside Rome and outside Italy, attended by the Chief Executive Director of the complex Claudio Descalzi who was accompanied by most of his aides and company officials, while only the President of the energy complex, Emma Marchiglia, was absent.
Eni, has extended the exploitation of oil and gas fields in Algeria east of Hassi Messaoud for another 10 years.
“The Company has reached an agreement with the Algerian party (Sonatrach) regarding the fragmentation of oil fields known as SF-SFNC, which is located in the blocks 401 A and 402B, of which Eni holds 55 percent, the Eni  CEO stated.
The company also obtained the extension of contracts for the exploitation of oil and gas fields in the same area (blocks 401 and 402) over the past year (2016), which means that the exploitation will extend until 2026.
He added that the company continued last year to develop and improve the gas fields located to the east of Hassi Messaoud as part of the  CAFC project, in addition to the construction, drilling and improvement of production in these fields.
Asked whether Eni would continue to buy Algerian gas at the same levels as this year, Mr. Descalzi said: “The answer is yes, we will continue to purchase”.
 “The volume is something we discuss every year, so I’m not in a position to say if I’m going to buy 8, 9, 10 [Bcm] or more,” he said, adding that its purchases are also related to the prevailing price conditions.
Mr. Descalzi also said that Eni had a long-term gas contract with Sonatrach running until 2019, stressing that the contract has to be respected by the two sides. He went on to describe the company’s relationship with Algeria as “wonderful.”
Eni and Algeria have signed a number of bilateral deals in the past year including in the fields of upstream and renewable energy.
Other Eni’s activities in Algeria in 2016 related to drilling, exploration and production improvement in the Roud field, which is operated up to 66 per cent, where the enhanced oil recovery technology, known as water pumping, was processed and adopted.