- With Algerian reforms of its oil and gas sector in place, its state-owned company Sonatrach is set to implement far-reaching agreements with Norway's state-owned oil company Statoil. Statoil, which already is involved in three major Algerian gas fields, is to become Sonatrach's main partner in Algeria, while Sonatrach is to get access to Norwegian offshore gas fields and thus new technology.
Algeria and Norway are two of the three major gas suppliers to continental Europe, one controlling the stream from the south, the other submissions from the north. Only Russia can compete with these two suppliers, who now have found the time right to implement a wide-ranging cooperation.
Sonatrach Director Mohammed Méziane this week has received Statoil leaders in Algiers to deepen the cooperation between the two state-owned companies according to agreements made more than one year ago. As Algerian lawmakers are beginning to reform the country's oil and gas legislation, opening the country more for foreign investors, agreements can finally be implemented.
Statoil and Sonatrach have gone far in declaring a joint strategy and effort to conquer new markets. "We want to balance out relationship and do business jointly in the outside world, maybe in Africa" Mr Méziane told the Norwegian daily 'Stavanger Aftenblad' yesterday, after a meeting he had with Statoil leaders and Algerian Energy and Mines Minister Chakib Khelil.
The Sonatrach Director confirmed that Statoil is set to get further contracts on Algerian gas fields in cooperation with the Algerian state company. Algerian leaders however did not reveal to the press which gas fields could be offered the Norwegian state oil company in near future.
Statoil's further expansion in Algeria was connected to a Sonatrach expansion in Norwegian offshore gas fields, which would be the first engagement of an African company in Norway. Statoil was planning to let Sonatrach in on Norwegian offshore gas fields operated by the company and lobby for Sonatrach's participation in new gas fields off the Norwegian coast. Both the operative Kristin filed and the yet-to-produce Tyrihans field were mentioned as possible entrances for Sonatrach in Norway.
For Sonatrach, operations off the Norwegian coast would mean the Algerian company's first engagement in offshore fields ever. It is expected that the move would include important technology transfers from Statoil, which is mainly engaged offshore. This, in turn, could facilitate future oil and gas explorations off the Algerian coast, which so far remains mostly unexplored.
Statoil is already heavily engaged in Algeria. According to Algiers authorities, the Norwegian state company holds the second largest foreign investments in Algeria's oil and gas sector. The Norwegians are engaged in three of Algeria's main gas fields. In two of them - In Salah and In Amenas, located in the Sahara desert - Statoil cooperates with Sonatrach and British BP. In Salah started producing in 2004 while In Amenas is due to come on stream in 2006.
In July 2004, Statoil was also awarded operatorship for the Hassi Mouina gas block. This newly discovered filed covers an area of 23,000 square kilometres in the Timimoun Basin and lies near the large In Salah gas field. Statoil has a 75 percent share of the block, and Sonatrach has the remaining 25 percent.
In addition to joint exploration and exploitation of gas reserves, the cooperation between Sonatrach and Statoil has already taken on other forms. Earlier this month, Statoil reported that Sonatrach had decided to run Statoil's safe behaviour programme adapted to Algerian conditions. "To begin with, the programme will be held for employees in the upstream activities," said Arne Maurits Martinsen of Statoil. "Around 15,000 employees will attend up to 2009, gradually followed by the rest of Sonatrach's staff."
Sonatrach's decision to adopt the Norwegian safe behaviour programme was said to be "an important part" of a memorandum of understanding concluded last year by the two state companies. The agreement, signed by chief executives Mr Méziane and Helge Lund, also entails cooperation on health, safety and the environment. The first workshop on the programme was to be held at the end of November 2006.
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