• Algeria has been carrying out a significant amount of drilling in order to ramp up its production of oil and gas ever since the conflict in Ukraine broke out and it became clear that Europe needed to wean itself off of its reliance on Russia as an energy supplier
• The first find is a gas condensate found in two distinct reservoirs after an exploration well was drilled in the Illizi Basin, the two reservoirs had combined flow rates of gas of 513,000 cubic metres per day
• More recently, Occidental (US), Total Energies (France), and Eni (Italy) came to an agreement worth US$4 billion to develop a site located in the Berkine perimeter and generate 1 billion barrels of oil equivalent

Sonatrach, the state-owned oil firm of Algeria, says three significant oil and gas finds have been made in the Sahara desert.

Algeria has been carrying out a significant amount of drilling to ramp up its oil and gas production ever since the Ukraine conflict broke out, and it became clear that Europe needed to wean itself off of its reliance on Russia as an energy supplier.

The first find is a gas condensate that was found in two distinct reservoirs after an exploration well was drilled in the Illizi Basin, which is situated on the border with Libya. This finding was made following the successful completion of the drilling project.

During the testing phase, the company found that the two reservoirs had gas flow rates of 513,000 cubic metres per day.

In the northern section of the Berkine Basin, another find of crude oil was made thanks to a collaboration between Italian oil major Eni and the Berkine Basin Exploration Company. According to Sonatrach, “during the production test, the well produced 1,300 barrels of oil per day in addition to 51,000 cm/day of associated gas.”

Both of these discoveries can be found in close proximity to established oil and gas infrastructure.

According to Sonatrach, who conducted the study, significant gas production was also reached when testing the formation of one reservoir in the Bechar Basin. This confirmed “a gas potential in this untested reservoir and in a location that is regarded to be a growing area.”

Export expansion

The findings are quite encouraging for Sonatrach and Algeria, both of which have not seen major increases in their hydrocarbon reserves since the middle of the 2000s.

Since the beginning of the year, Algeria has experienced an increase in the amount of oil and gas being exported via pipeline and sea; Algeria has provided Italy with 13.9 billion cubic metres, which is more than 113 per cent of the amounts that were originally expected.

More recently, Occidental (US), Total Energies (France), and Eni (Italy) came to an agreement worth US$4 billion to develop a site located in the Berkine perimeter and generate 1 billion barrels of oil equivalent. The transaction was signed by all three companies.

Sonatrach and other international oil firms can now enter into production-sharing agreements according to a hydrocarbon law passed in 2019, despite the fact that the legislation sparked some street protests. However, it established a legal basis for more investment in Algeria.

The Trans-Saharan Gas Pipeline benefits from Russia’s international isolation.

It is anticipated that Algeria’s renewed attractiveness as an investment destination in the wake of Russia’s isolation will encourage the development of new oil infrastructure, particularly in the Hassi R’Mel gas field, which just one month ago went through one of the most extensive revaluations of its reserves in the past 20 years.

It is anticipated that Hassi R’Mel will serve as a hub for the Trans-Saharan Gas Pipeline project (TSGP). This pipeline project aims to transport gas from Nigeria to Algeria via Niger.

A tripartite ministerial meeting that took place between Algeria, Nigeria, and Niger on the 28th July 2022 prepared the ground for a genuine rebirth of the project, even though it had been dormant for more than ten years. After holding discussions on the operational particulars of the 4,128-kilometer pipeline, the three ministers of energy have agreed to the terms of a memorandum of understanding and signed it.

The initial investment in the project is anticipated to be $10 billion, and its annual capacity is approximately 30 billion cubic metres.

Ukraine war makes Africa’s gas more important than ever

According to a statement made by the European Commission in March 2022, “The EU could import 50 bcm more of LNG on an annual basis.” This goal was increased by the bloc in May 2022 to include 10 billion cubic metres (bcm) of gas to be transported via pipeline.

Because of its political resolve to lessen its dependence on Russia as a form of protest against Moscow’s invasion of Ukraine, the European Union is currently searching desperately for alternate sources of supply.

The Commission called Egypt and West Africa out expressly as two potential sources in the REPowerEU plan, which was made public on March 8th 2022.

Read: Can African oil producers take advantage of the Ukraine crisis?

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