Embassy of Algeria K.Lumpur

HYDROCARBONS GENERAL DIRECTION

Advantages

The upstream sector of the hydrocarbons national industry is mainly characterized by the following factors:

An extreme richness and diversity of the oil and gas potential
An oil potential still to be developed
The existence of sedimentary basins unexplored or under-explored
A clear and flexible legislation offering various advantages to operators.

These quite competitive characteristics, comparatively to other regions in the world containing hydrocarbons resources, are likely to attract and foster investments from national and foreign operators.

Ancillary oil activities and services are, for their part, governed by the common legislation and more particularly the Investments Code.

Moreover, the national and foreign investors in the upstream sector of the hydrocarbons national industry may benefit from a number of incentives and advantages:

the prime quality of hydrocarbons produced (light crudes, without sulfur content),

the sector has accumulated a significant amount of quality data covering the whole national mining field and easily available to investors,

most major international service companies (Schlumberger, Halliburton, Weatherford, Baker,..) are established in Algeria ,

the country has a very wide pipe transportation system of hydrocarbons, many refineries, liquefaction plants, LPG separation units as well as oil ports from which liquid productions can be shipped,

the petroleum legislation provides for a number of royalty and tax allowances applicable in regions with particular difficulties,

the diversity of investment projects proposed is likely to attract both large multinationals and medium sized companies,

investors benefit from guarantees in accordance with the various international agreements and treaties to which Algeria is a party,

the country has a dense industrial base (small and medium industries, various services, consulting, manufacturing, works, construction,..) likely to give a support to oil activities at a competitive cost. The same facilities are currently opened to direct investments or partnerships with national operators,

existence of a skilled and experimented workforce,

the core infrastructure is solid, well distributed throughout the country (airports, roads, rail network,..).

Hydrocarbons exploration

The hydrocarbons mining domain is very wide and covers an area of 1.5 million km 2 representing in fact 60% of the national territory.

It is a very rich and diversified field, both of the Mesozoic / Paleozoic and Cenozoic eras, containing oil potential confirmed by Sonatrach together with foreign partners.

Except some basins where significant hydrocarbon deposits have been discovered, this domain remains unexplored as wide regions only experienced preliminary works to this day.

Even the basins considered as known are currently subject to studies and analyses for the purpose of new programs. It is the case for example, of the Hassi-R'Mel region producing in the Trias, where an exploratory drilling has been located, targeting the Cambrian reservoir.

Sonatrach are currently booting promotion campaigns at the international level and organizing data rooms for foreign oil companies wishing to invest in Algeria in the exploration sector.

A number of blocks are thus periodically offered to the interested companies.

Two call for bids have already been made and resulted in the signature of two R&P partnership agreements through the first call and in five contracts through the second one.

The perimeters where Sonatrach is currently operating alone are also opened to partnership.

Thus, the interested companies may contact:

SONATRACH
Division Exploration
Avenue du 1 er novembre 1954
Immeuble IAP
Boumerdes
Tel : +213-24 81 91 70 / 81 91 79
Fax : 213-24 81 91 75 / 74 84 37

Ministry of Energy and Mines,

Hydrocarbons General Direction, Hydrocarbons Mining Field Direction

Hydrocarbons exploitation

Various investment opportunities are offered in this sector:

Development and exploitation of already discovered fields.
Improvement of the operating fields recovery rate.
Development and exploitation of wet gas fields.
Exploitation of marginal fields.
Partnerships for the development and production of the new gas reserves.

SONATRACH has already concluded many agreements with foreign companies that may only intervene in association with the former. On these grounds, a call for bids for the operation of five fields was introduced during 2001.

The interested companies may contact:

SONATRACH
Chemin du Réservoir
Hydra
Tel : 213-21-60 92 00 / 60 72 44
Fax : 213-21-60 18 95

Ministry of Energy and Mines

Hydrocarbons General Direction

Ancillary oil activities and services

Investment opportunities in this field are quite numerous and varied. They are governed by the Investment Code and benefit from a number of incentives and advantages granted to the sector.

Available niches market are diversified:

Geophysical works,
Drilling and well services
Construction,
Labours
Engineering,
Equipment manufacturing
Consulting,
...etc.

A lot of companies are already operating in these fields and a number of projects about to start.

Such are then the opportunities of investment in Algeria offered to operators who can take profit of. Actually, these are only the major lines of the subject considered, but experience showed that domestic and foreign operators once in Algeria progress rapidly in the targeted niche(s) market and are proposed other investment opportunities with much more interesting development prospects.