Algerian oil producer Sonatrach plans to raise crude output by five per cent in 2016 by allowing various foreign companies exploration rights to oil and gas fields
A Bloomberg report has revealed that by March-end, Sonatrach will offer exploration rights amid the current oil glut. State petroleum regulator Alnaft is expected to organise the bidding round for the companies and take feedback from them to improve on the earlier auction held in 2014.
Sonatrach believes that allowing foreign companies exploration opportunities will add barrels to an oversupplied global market. Sonatrach vice-president of exploration and production Sakah Mekmouche said that Algeria is seeking to attract several international companies to develop its oil and gas fields, as well as the relatively inaccessible tight deposits. “We hope that oil prices will rise by then as this will increase the interest of companies in the bidding round even more.”
Mekmouche added that the company would likely end 2015 with the same level of output as last year, but for 2016, they anticipate an increase in production by at least five per cent. For the past two years, Algeria’s oil output has remained at around 1.1mn bpd. Production rose 4.4 per cent in 2014 to 200mn MT of oil equivalent. Due to falling prices, Sonatrach has reduced costs and investments. In the new year, the company hopes to deploy new technologies to overcome delays as well as deliver projects on time.