Fourth exploration round licences awarded

12 December 2003
The Energy & Mines Ministry and state energy company Sonatrachannounced on 6 December the award of five licences for oil and gas permits as part of the fourth international licensing round. The five-year appraisal and exploration licences, awarded just hours after bids were opened, call on international oil companies (IOCs) to invest over $100 million.

The selected IOCs are:

China National Petroleum Company (CNPC) - the 8,666-square-kilometre oil block 350 in the Oued Mya basin and oil and gas blocks 102a/112 covering an area of 9,923 square kilometres in the Cheliff basin;

Calgary-based Petro-Canada- the oil block 431b in the Amguid Messaoud basin with a total area of 2,806 square kilometres;

a consortium comprising Spain's Repsol, RWE DEA of Germany and Italy's Edison - the10,580-square-kilometre gas blocks 332a, 341a3, 339a and 337a1 in the Ahnet basin;

a consortium made up of France's Totaland Cepsaof Spain - gas blocks 309b, 310b1, 311b1 and 319b1 covering an area of 13,775 square kilometres in the Bechar basin.

All the licences will be signed on 22 December.

For the first time, licences for two virgin offshore blocks covering 15,798 square kilometres in the Bejaia and Arzew basins were tendered, but failed to attract bidders. Foreign companies can only hold a maximum of 49 per cent of Algerian offshore operations at present and it is understood that IOCs are waiting for a new investment law, under consideration by Algiers, to permit foreign control of up to 75 per cent in offshore operations.

Five other licences were not awarded under the fourth exploration round as they either did not meet specifications or did not receive bids. These onshore permits with a total acreage of 26,064 square kilometres ranged from blocks in well-known producing basins to frontier areas with no exploration wells and only limited seismic data.

Sonatrach chief executive Mohamed Meziane said at the award ceremony that permits not awarded in the fourth round will be retendered in a fifth round along with several new concessions.

Sonatrach has held three previous international licensing rounds, which resulted in 17 exploration contracts. The bid rounds replaced the previous system of often protracted bilateral negotiations (MEED 9:5:03).

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