Algeria’s state-run energy producer plans to boost crude oil output by 14% in the four years to 2019 and invest billions of dollars in exploration projects.
Sonatrach Group expects to invest $9 billion from 2017 to 2021 in its search for new deposits of oil and natural gas, said Farid Djettou, head of the company’s associations division, which is responsible for foreign contracts. Sonatrach will drill an average of 100 wells annually over the same five years and plans to invest more than $50 billion in all of its operations during this period, Djettou said Wednesday in an interview in the coastal city of Oran.
Algeria is Africa’s biggest gas producer and a member of OPEC, and Sonatrach’s exports generate more than half of the government’s budget revenue. The country’s oil output has declined since August 2008, and its production of 1.04 MMbpd in February was at the lowest level since 2002, according to data compiled by Bloomberg. The government appointed a new chief executive officer for Sonatrach on Monday, bringing in the company’s sixth leader since 2010.
Sonatrach’s annual production will exceed 230 million tons of oil equivalent by 2021, with foreign companies increasing their yearly output by 10 million tons of oil equivalent, Djettou said in the interview at the North Africa Petroleum Exhibition and Conference in Oran.
Algeria championed a historic deal to curb production when it hosted its fellow members of the Organization of Petroleum Exporting Countries in September in the capital Algiers. Together with oil producers outside the group, OPEC subsequently agreed to cut output by a combined 1.8 MMbpd for at least six months starting in January. An increase in Sonatrach’s output could complicate efforts to curb a global glut and prop up crude prices.