Algeria awards four out of 31 exploration licences

02 October 2014

Licensing round is fourth in a row to see little enthusiasm from oil companies

Algeria has awarded four of the 31 available oil and gas blocks in its fourth international bidding round, in a move that has shed doubts about its current drive to ramp up natural gas production.

Spanish energy company Repsol and Anglo-Dutch multinational Royal Dutch Shell won the Boughezoul block in Algeria’s north.

Italy’s Enel and Dubai-based Dragon Oil won the Tinrhert and Msari Akabli blocks.

Norway’s Statoil and Shell won the Timissit blocks near Algeria’s borders with Libya and Tunisia.

The round was launched in January 2014 and is the fourth round in a row that has seen little enthusiasm from oil companies.

The last oil and gas licensing round took place in 2011 and saw just two permits awarded out of the 10 on offer.

In 2010, only three permits out of 10 were awarded, and in 2009, only four of the 16 licences on offer saw takers.

Algerian officials have described the result as acceptable, but some analysts are concerned it won’t be enough to help Algeria lift production.

Algeria is currently struggling to boost its output as some of its largest producing gas assets mature and see declining production.

Since the failure of the round in 2010, the Algerian government took a number of measures to drum up interest in its gas and oil reserves, including an overhaul of the hydrocarbons law that was passed last year.

The new law included incentives for foreign firms and links tax to profit rather than revenue.

It also offers extra benefits for those who invest in Algeria’s unconventional reserves, such as shale gas.

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