Oil and gas
BMI has commented that even though Algeria has substantial hydrocarbons reserves, rapid production decline in the country’s major producing fields weighs on its longer term production outlook. Also, whilst new projects are due online in the coming years they will offer temporary support to production growth and due to this, BMI are growing increasingly bearish towards the end of 2023. The high prospectivity of Algeria’s unconventional and offshore acreage could see this trend reversed, but a poor above ground environment continues to drag on international investment.
The attacks on BP’s In Amenas gas plant have created security concerns for investors in Algeria, however, improvements to security protocols made in recent months could see a normalisation of operations within the coming quarters.
BMI have forecast that total oil production will rise only slightly, from 1.8 million bpd in 2013 to 1.9 million bpd in 2017 as several new projects, located mainly in the Berkine Basin, come online. However, with the acceleration of production decline in the country’s major and maturing producing fields, BMI are forecasting a decline in output from 2018 to reach 1.7 million bpd by 2023. The forecast for the consumption of crude is also predicted to rise by 2023 and will do so broadly inline with the expected GDP growth rate. BMI anticipate that crude consumption will rise from an estimated 341 190 bpd in 2013 to 465 900 bpd in 2023.
When it comes to gas, BMI forecast that production will increase from an estimated 79.2 billion m3 in 2013 to 94.3 billion m3 by 2023 as major new projects, mostly located in the Ahnet, Berkine and Illizi basins come onstream. The Touat projects BMI have said, appear to be on schedule, with a target startup date for 2016. The field could add 4.5 billion m3 of gas to the country’s output at peak, helping offset rapid decline in the country’s producing gas fields.
BMI believes that petrochemicals have major potential as Algeria looks to reduce its reliance on raw commodity prices. Its main value added products are methanol and fertiliser. Petrochemical exports total approximately two thirds of the country’s non-hydrocarbons exports, but hydrocarbons comprise 95% of the country’s total exports. Algeria has the fourth largest oil reserves and second largest gas reserves in Africa, but production has plateaued in recent years.
BMI has said that the country’s petrochemical market is likely to witness a steady improvement in growth this year, driven by domestic demand and public investment activity.
Adapted from report briefs by Claira Lloyd