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Algeria oil and gas output on the rise -Sonatrach

(Adds detail, CEO comment)

By Lamine Chikhi

Algeria’s oil and gas output is moving back to growth after years of stagnation, helped in part by increased production at the North African OPEC member’s existing fields, state energy company Sonatrach said on Sunday.

The North African country has struggled to draw in foreign energy companies to help it to explore new fields, its efforts undermined low global oil prices and last year’s near-50 percent drop in energy revenue that accounts for more than 60 percent of the Algeria’s budget.

Oil output will reach 69 million tonnes of oil equivalent in 2016, against 67 million tonnes last year, while gas production will rise to 132.2 billion cubic meters (bcm) from 128.3 bcm in 2015 and 130.9 bcm in 2014, a Sonatrach report showed.

“The era of stagnation is behind us and we are now in a phase of growth,” Sonatrach chief Amine Mazouzi told reporters on Sunday.

A drop in European gas demand has dented Algerian exports that have also been squeezed by a combination of slowing production at mature fields, low investment and Algeria’s own rapidly increasing need for gas to generate power.

Sonatrach, however, has invested to stabilise and increase production at its large, mature fields and expects to bring five new gas fields online in the south of the country over the next few years.

Gas output is expected to reach 141.3 bcm in 2017, 143.9 bcm in 2018, 150 bcm in 2019 and 165 bcm in 2020, according to a Sonatrach document.

Oil output will reach 75 million tonnes of oil equivalent in 2017, 75 million tonnes in 2018, 77 million tonnes in 2019 and 82 million tonnes in 2020, the document showed.

On the other side, Algeria’s national oil and gas company Sonatrach has signed an agreement with Spanish oil and gas company Cepsa to extend the partnership contracts for the Rhourde El Krouf (RKF) and Ourhoud oil fields by 25 years and 10 years, respectively. The Ourhoud contract was due to expire in 2019. The companies will jointly “explore opportunities in other areas where both companies have common interests in Algeria and internationally”