Anadarko's Algerian ambition

11 November 2002

Anadarko Petroleum Corporation, one of the world's three largest independent oil companies, is to nearly double its production capacity in Algeria in the second quarter of 2003 when new facilities are completed in Ourhoud - taking the company's gross output to more than 500,000 barrels a day (b/d).

Speaking to MEED on the fringes of the Oil & Money conference in London on 5 November, chairman Robert Allison gave a status report on the company's activities and ambitions in the region. Outside Algeria, Anadarko has interests in Tunisia, Egypt and Oman, as well as exciting new prospects in Qatar, which it gained through buying Gulfstream Resources Canadain summer 2001.

But Algeria remains the main focus of attention. Alongside the development of Ourhoud, the company is expanding its exploration operations. However, Algeria already produces some 30 per cent more than its OPEC quota and some question the sustainability of higher production.

'First oil is due to come from Ourhoud on 4 December and full capacity of 230,000 b/d will be on stream in the second quarter of next year. Existing capacity is 285,000 b/d,' he said. 'The government tells us what to produce each quarter and that's what we do. The contract says our curtailment must be pro rata with the other facilities in the country and so far that's been honoured. We've found the 2,800 million barrels of oil in Algeria - that means the fields will last 20-30 years - so what happens next month or next year is important, but it's not the be-all and end-all.'

Anadarko aims to raise these figures through exploration efforts now under way.

'We have three new blocks and three existing exploration blocks,' said Allison. 'We drilled one of them - EME block - this year, but it appears to be a dry well. We're about to start another one and will then do a final one by the year's end. Both of these are close to Hassi Berkine.'

To some extent, its Algerian operations have provided a template for the smaller presence in Tunisia, but the smaller country has advantages over its neighbour.

'We're drilling exploration wells in Tunisia starting this month and have two main blocks in the country,' he said. 'They are similar to our Algerian blocks but smaller, so we hope to string them together in a kind of pearl formation. Tunisia has plenty of infrastructure already available and our facilities are logistically less remote than those in Algeria. We had several discoveries recently in Tunisia.'

While Anadarko has a presence in Egypt, its purchase of Gulfstream in August 2001 gave it a Gulf presence for the first time, with acreage in Oman and Qatar. Within a year, it bought out the shares of BP in the three offshore blocks it had entered.

Allison says that production from the Rayyan field is now 5,000 b/d and will be boosted to 35,000 b/d, while exploration in the other two blocks is going well.

The company is eager to use its Qatari base to push further into the Middle East.

'We have several other stealth operations, some of which are in the Middle East,' says Allison. 'I think we would be well placed to go into Iraq if the sanctions were to be lifted. We want to stay in the Middle East and expand our operations here, and clearly Iraq has good exploratory potential.'

Indeed, Allison believes that independents offer more to countries like Iraq than do the larger majors and super-majors. 'Companies like ours are good for national companies to partner. We can bring technology and experience and make it a focus area. So I think there would be certain advantages to looking at the opportunities there.'

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