Wednesday, October 25, 2017
TOUAT, Algeria, Oct 25 (Reuters) – Algeria will delay the start of the southern Touat gas field until the first quarter of 2018, almost a year later than planned, the head of state energy firm Sonatrach said.
“Of the 21 wells, only 3 are ready to come online,” CEO Abdelmoumene Ould Kaddour told reporters on Tuesday during a visit to the planned field located deep in Algeria’s south.
“I acknowledge that our business in the deep south is very difficult, very complex, but definitely we need to improve our efficiency,” he said.
“We are always late. It is becoming very serious.”
Touat is expected to come online in the first quarter of 2018. It is one of five gas fields Algeria has been developing.
Kaddour said Algeria planned to boost annual gas production to 95 billion cubic metres, of which 42 billion would be for domestic and 53 billion for exports. It had originally eyed boosting exports to 57 billion cubic metres.
“But we will meet 100 percent of our commitments with our clients,” Kaddour said.
Touat will produce 12.8 million cubic metres per day. In the gas project Sonatrach holds a 55 percent share and French Engie 45 percent.
Sonatrach, Algeria’s cash cow and a major gas supplier to Europe, has been shaken by corruption scandals, the frequent departure of top executives and bureaucratic inefficiencies that have hindered development of new oilfields.
The sprawling company has been hit by delays in launching new fields because foreign businesses have been reluctant to invest due to tough contractual terms. Sonatrach has also had seven CEOs in 10 years.
Kaddour, who was appointed in March, has said he would undertake the necessary reforms.
Algeria remains dependent on oil and gas earnings that provide 60 percent of the state budget, with Sonatrach’s performance key to the health of the economy.
The North African OPEC member has sought to address its difficulties attracting oil investment and last year began to take a more flexible approach to bilateral talks with foreign partners.
However, there have been divergent views within Algeria’s ruling elite over how hard to push for foreign investment and domestic economic reform to boost revenue and spur growth.
(Reporting by Lamine Chikhi; Editing by Adrian Croft/David Evans)
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