Oil Giants Exxon and Chevron to Develop Drilling in Algeria
Algeria has begun reaping the fruits of the 2019 hydrocarbons law, which paved the way to attract giant international oil and gas companies to invest in the large country of the African continent, through a smart strategy based on targeting large reservoirs and fields that ensure competitiveness and also invest with major European clients, the senior energy expert and analyst, Choeib Boutamine, said.
Last Thursday, the National Hydrocarbons Company “Sonatrach” signed a memorandum of understanding with the American energy giant “Chevron”, which will constitute a platform for discussions on opportunities to develop oil and gas resources in the Ahnet basins in the Wilaya of Illizi, and Berkine in the wilaya of Ouargla in the southeast of the country.
Three weeks before that, it was the turn of the other American giant, “ExxonMobil”, which also signed a memorandum of understanding with the national company Sonatrach, allowing the study of opportunities for developing oil and gas resources in both the Ahnet Basin, located in the Wilaya of Illizi, and the Gourara Basin in the southwest.
The expert and analyst, Shoeib Boutamine, explained in a post on his LinkedIn account that “Usually, the Majors don’t show interest in small projects but they target the most competitive; reliable and large reservoirs to ensure a profitable ROI”.
Boutamine added that “Algeria has roughly 4,5 TCM of conventional natural gas reserves, but the big cake is not represented by unconventional reserves, which may greatly exceed the announced numbers of 20 TMC”.
“Not only that the tight Oil could be also a promising business to develop time technologies and recent extraction methods are the main pillars to bolster Sonatrach’s development vision”, he asserted.
The expert, Boutamine, considered that the contract of “ExxonMobil” and “Chevron” with “Sonatrach” is a brilliant plan and an objective strategy on the part of the two American giants, based on investment in Algeria, which is the geographically closest place to “Sonatrach’s” customers, meaning Europe (Italy, France, Spain and others), which reduces costs and carbon footprint, indicating a high return on investment due to reduced expenses.
“Relying on them to enhance its fossils outputs and reach a target of export of 100 BCM in the upcoming 05 years ( which is a very tough mission ), yes the available technologies right now are allowing us to extend the horizontal section depth longer as the RSS tools have added remarkable value to the oil and gas business, the Fracking methods- the flowback treatment has surged positively and enhanced the exploitation rates”, he confirmed.
He proposed some points that would help Algeria extract its unconventional resources, saying that it has to apply a strategy if it is seeking to deliver profitable and competitive products to its clients:
1. Put a decarbonization plan and involve available technologies in all operations. Algeria’s main client is Europe, so it has to adopt investment plans related to the new regulations such as CBAM.
2. Develop the Frac sand business locally to save costs and absorb unemployment (support the surge of the local skills and economy).
3. Promote the fracturing fluids industry locally (need huge volumes in fracking).
4. Put a tight policy on the IOCs and service companies before taking the environmental aspect (ExxonMobil and Chevron will add value regarding this).
5. Developing the supply chain, shale gas requires huge and crucial logistics as we drill several wells in a very small area, management plan has to be set accordingly.
6. Involve the big services companies with long expertise SLB Baker Hughes, in reservoir engineering, RSS and engineering will be key to success.
He concluded that signing these agreements between Sonatrach and ExxonMobil with Chevron is a very smart plan and objective policy made by the two majors, investing closely to the customers, will save cost and reduce the carbon footprint.
