Third exploration round launched

22 February 2002

International oil and gas companies seeking further exploration opportunities in Algeria are gearing up to bid for several blocks located in seven basins across the country. Interested firms have until 30 June to submit proposals under Algeria's third international licensing round which was launched by state energy company Sonatrachand the Energy & Mines Ministry in early February.

A total of 10 areas are available under the latest bid round. Four of these are in the prolific oil-producing Berkine basin, and two others are close to existing oil infrastructure in the Illizi basin. Other blocks on offer are in little-explored or frontier areas, including some in the Oued Mya and Reggane basins, where Sonatrach has made small discoveries in recent years.

A meeting will be held in Algiers on 27 February during which technical information about the blocks and the main contractual terms will be presented, and the data room will be open from 16 March-1 May. Companies may request changes to the model contract until 31 May, after which they have one month to submit their proposals. The bids will be opened publicly on 1 July, and awards will be made on the same day. The client intends to sign the contracts within 15 days of the opening ceremony.

The tender reconfirms Algeria's commitment to the speedy and transparent allocation of exploration, development and production licences. The method is a far cry from the protracted, bilateral negotiations that previously preceeded a licence award. The new method has been championed by Energy & Mines Minister Chakib Khelil, who was appointed to head the ministry in 1999.

Sonatrach and the ministry have already launched two international licensing rounds for exploration blocks which have had mixed results. In the first, one year ago, bids were submitted for only three of the six areas on offer, with international companies shunning those blocks with complex geology. The turnout for the second auction was also lower than expected, and once again there were no bidders for the high-risk or frontier areas (MEED 12:10:01; 2:3:01).

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