Sandwiched between two of Africa’s largest oil producers - Algeria to the west and Libya to the east - Tunisia’s state-owned oil company, Entreprise Tunisienne d’Activites Petrolieres (Etap), has to make what it can from the fringes of North Africa’s great hydrocarbons producers. Analysis of Etap’s future always begins with the same thought: there is not enough oil and gas.

Company	Entreprise Tunisienne d’Activites Petrolieres (Etap)
Oil Reserves	600 million barrels
Oil Production2007	98,000 barrels a day*
Gas Reserves	2.3 trillion cubic feet
Gas Production 2007	Not available
*includes NGLs. Source: BP Statistical Review 2008; MEED

“Since the beginning of the decade, Tunisia’s oil resources have not been enough to cover national demand,” admitted Khaled Becheikh, head of Etap, when introducing the company at the Maghreb-Mediterranean Oil & Gas Summit in Tunis in mid-June.

The predicament, he said, had forced the company to adopt a “new energy strategy”, involving “the reinforcement of exploration activity inside and outside the country and development of Tunisian gas resources”.

Etap’s domestic partners are generally “little companies doing little projects”, says one seasoned industry observer.

But thanks to Etap’s open approach to international partnership, particularly in com-parison with Libya’s National Oil Corporation and Algeria’s Sonatrach, the country is attracting serious attention. “There is an inverse relationship between IOC participation and resource potential,” says Charles Fordham, business development manager for Chevron North Africa.

The evidence for this is compelling. There are currently 59 oil companies exploring 50 blocks in the country and, according to Jalel Smaoui, Etap’s deputy manager for exploration and promotion, total upstream investment in 2007 was $280m.

Becheikh says Etap is happy to enter into either exploration and production-sharing agreements or joint ventures with companies, and that he “sees potential in both”. Either way, the terms are generous, particularly in comparison with Algeria and Libya. Further incentives were introduced in the February 2008 oil law, which included a new option for foreign oil companies to set up a tax-deductible fund for reinvestment in exploration.

Etap has also developed a gas sector strategy, which Becheikh says is to “focus on new prospective formations and to work on the development of a gas transmission network”.

Tunisia has one of the more developed domestic gas markets in the region. The price is commercial, and the share of gas in total energy consumption has increased to 40 per cent from 6 per cent in 1980.

As well as some large offshore developments, Etap has set up the South Tunisian Gas Project, a new company responsible for engineering, construction and operation of the network that will deliver gas from the onshore Ghadames basin fields in the south to existing markets in the north. According to Becheikh, possible scenarios include exporting the gas through the Transmed pipeline to Italy via Algeria, or using it to supply a small-scale LNG plant, “depending on the scale of resources discovered”.

Etap is also turning its attention to overseas opportunities. The company has already negotiated some foreign deals, including a joint exploration agreement with Sonatrach and an exploration protocol with the Mauritanian Hydrocarbons Company. Becheikh says formalities for establishing Etap International, a hydrocarbons exploration development and production subsidiary based outside Tunisia, should be completed by the end of the year.