Algeria: Energy news: Oil / gas / electricity / solar / nuclear power developments

[Al-khiyal]

MOSCOW, May 31 (RIA Novosti) - Gazprom and Algeria are considering joint projects in surveying, producing, delivering, processing and selling hydrocarbon resources, the Russian energy giant said Wednesday.

This issue, as well as cooperation in LNG production and supplies to the world markets, was on the agenda of a visit made by a Gazprom delegation to the North African country.

Algeria's natural gas reserves total 4.55 trillion cubic meters and the country produced 82 billion cu m of gas in 2004.

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[Al-khiyal]

LONDON (AFX) - Wood Group PLC, the energy services company, said its Engineering and Production Facilities unit had bought 55 pct of SOMIAS Spa, an Algerian petrochemicals support firm.

The price was not disclosed.

Groupe Asmidal of Algeria, SOMIAS' current parent, will retain 45 pct.

SOMIAS will keep its name and Zaghouane Khodja will continue as general manager.

'The acquisition of SOMIAS Spa marks a strategic move into North Africa,' said Les Thomas, head of Production Facilities at Wood Group.

The UK company recently won an engineering contract in Algeria from the In Amenas partnership, comprising BP, Statoil and Sonatrach.

SOMIAS generated sales of 11.8 mln usd in 2005 and employs around 450 people.

Wood Group makes annual sales of 2.8 bln usd and has more than 16,000 employees in 40 countries.

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[Al-khiyal]

Ahead of the 141st extraordinary ministerial meeting of the Organization of Petroleum Exporting Countries (OPEC) in Caracas, Venezuela and three other OPEC members, namely Algeria, Qatar, and Iran, negotiated bilateral energy agreements.

Energy and Petroleum minister Rafael Ramírez said that Eulogio Del Pino, CEO of the Venezuelan Petroleum Corporation, an affiliate of state oil giant Pdvsa, Wednesday executed an instrument with Algerian state oil company Sonatrach for quantification and certification of reserves in Ensenada de Barcelona, east Venezuela......

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[Al-khiyal]

"Say the words "oil company," and the names that come to mind are the likes of ExxonMobil (XOM ), Chevron (CVX ), and Shell. But when it comes to actually producing crude, another, less familiar group of companies is becoming increasingly important. State-owned oil companies such as Saudi Aramco and National Iranian Oil, not the remnants of the so-called Seven Sisters, control most of the world's reserves and production.

These secretive outfits are likely to exert, at least indirectly, a growing influence over how we live. For readers interested in learning how they behave and what motivates them, Oil Titans: National Oil Companies in the Middle East by Valérie Marcel is a good place to start. It is timely because national oil companies (NOCs) from Venezuela to Iran are flexing their muscles and raising their profiles. And unlike many of the available books about oil, which tend to be rather basic, this one is packed with useful information, compensating for its dry writing style.

Marcel, a researcher at London's venerable Chatham House think tank, focuses on five of the most important NOCs, including Abu Dhabi National Oil, Kuwait Petroleum, and Algeria's Sonatrach, along with the two previously mentioned. These companies alone account for about 50% of world oil reserves and 25% of production. The author seems sympathetic to the NOCs' point of view, and she may be a bit uncritical about some of their assertions, such as Saudi Arabia's possibly over-optimistic pronouncements about its production capacity. But Marcel, assisted by former BP adviser John Mitchell, delves into everything from their corporate cultures to their financial systems, international strategies, and the evolution of partnerships between the NOCs and global oil companies. She also delineates some of the snags Western oil companies face in this politically charged region.

While there are distinct differences among the NOCs, it's safe to say from Marcel's work, which draws upon dozens of anonymous interviews with their personnel, that their operations are quite unlike what one finds at a BP or an Exxon. Their managers may be highly professional, but there's little doubt the companies are instruments of their home countries' political leadership, which has priorities other than investing in the industry, such as social spending.

The existence of these other agendas means that in places such as Kuwait and Iran, the national companies don't have access to sufficient capital and expertise to meet the production targets they have been given. Yet there is great resistance to bringing in outsiders. Marcel also shows that the companies don't have sufficient incentives in place to promote sound business decisions and hard work.

Above all, the NOCs' histories explain their current mindsets. Before World War II, a handful of U.S. and European companies carved up the region's oil zones. These companies, Marcel writes, "fixed the rules of the oil game," not only taking what now seem like outlandish percentages of the revenues but controlling prices, usually to the disadvantage of the producing countries. Gradually, Saudi Arabia and the rest threw off this yoke, nationalizing their industries and gaining leverage over pricing through OPEC, founded in 1960. But memories of this era have meant resistance to the return of Western oil companies, which probably offer the best hope of quickly increasing production.

Marcel also teases out a less well-known objection to the Westerners. Middle Eastern oil professionals, citing alleged examples such as Shell's work in Oman, say that to meet quarterly targets, the majors manage fields too aggressively. NOCs prefer to underproduce if that will allow them to keep going for the 50 years or more some countries' reserves might last. So even if they let Western companies in, the NOCs believe it is important to closely monitor the outsiders' behavior and, sometimes, restrict their participation.

The NOCs, Marcel asserts, do have some advantages over the majors. In cases such as Iran they have specialized knowledge of unique reservoirs. They also have access to most of the world's best fields. Above all they have "the luxury to think strategically and...the time to implement their strategy," she writes.

The situation isn't static. The emergence of a new generation and the severe financial pressures from rock-bottom oil prices in the mid-1990s have pushed the companies to behave more like commercial entities. Still, it's a good bet that bridging the gaps between the state-owned companies and the big international players will be a long, slow process, and that the reserves of the Middle East will be developed much less rapidly than many would prefer."

Book review: OIL TITANS: National Oil Companies in the Middle East

[Al-khiyal]

Gazprom, Europe's biggest natural-gas supplier, said deputy chief executive Alexander Medvedev completed a three-day visit to Algeria to discuss possible joint projects.

Medvedev met Abbas Facal, secretary general of Algeria's Energy Ministry, and Mohamed Meziane, CEO of Sonatrach, Algeria's state-run energy group, Gazprom said Thursday in a statement.

Russia and Algeria together supply about 70 percent of the European Union's gas imports.

Medvedev visits Algeria

[Al-khiyal]

New Delhi, June 2 - - State gas utility GAIL (India) Ltd said on Friday that it has sold out the entire quantity of the first ever LNG spot cargo bought from Algeria.

"The liquefied natural gas, equivalent to 80 million standard cubic metres of natural gas, was sold to consumers such as National Thermal Power Corp (NTPC), Delhi Vidyut Board, Birla Copper and some others," a company release said.

The first spot cargo of LNG from Sonatrach, Algeria was received on May 20 at Dahej in Gujarat.

"In April 2004, GAIL created history in the gas sector by selling re-gasified LNG for the first time in India... Two years later in June 2006, GAIL has now once again achieved a milestone by selling the first internationally trade spot cargo of LNG," GAIL Chairman and Managing Director Proshanto Banerjee said.....

GAIL sold out entire LNG spot cargo bought from Algeria

[Al-khiyal]

The secretary of State for trade in the Italian government, Mr Mauro Agostini, confirmed, yesterday, during his visit to the Italian wing in the 39th edition of Algeria international fair, that Rome will back Algeria in its current negotiations for the signature of a strategic agreement on energy between Algeria and the EU. This agreement will give Algeria privileges in terms of exporting Algerian energy products to the European market.

The same official made it clear, in his answer to an El Khabar question, that Italy will benefit from the increase of natural gas quantity with the construction of the second pipeline, but there are many European countries that will benefit, too, from this increase, thus Italy will back Algeria in its negotiations to sign a bilateral protocol.....

Rome will support Algeria