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Algeria Invites Oil, Gas Exploration Bids to Check Output Drop

Algeria invited companies to bid for oil and natural-gas exploration rights in 31 plots making up an area the size of Germany, as the North African nation seeks to check a decline in fuel output.

Africa’s largest gas producer set Aug. 6 as the deadline for companies to submit bids in its fourth competitive petroleum exploration tender. Bids will be opened that day in a public ceremony to choose the winners and contracts will be signed Sept. 5, according to an announcement published today on petroleum regulator Alnaft’s website.

“The plots on offer are located in different sedimentary basins that have a high potential in petroleum resources,” Alnaft said. The acreage totals about 350,000 square kilometers (135,135 square miles) in area. Algeria is the largest African and Arab country by size at 2.4 million square kilometers.

The ninth-largest producer of the 12-member Organization of Petroleum Exporting Countries saw its output decline last year to 1.1 million barrels a day, the lowest since 2003. Exploration slowed in the last decade because of higher company taxation and a corruption probe at state-owned oil producer Sonatrach. A terror attack on a BP Plc-operated gas field a year ago further delayed projects to bring new fuel on stream, including the latest bidding round, initially planned for early 2013.

Mandatory Partner

The new round is being held under tax breaks introduced last year to promote exploration in remote areas and tapping of unconventional reserves such as so-called tight gas that’s trapped in rock and harder to extract than supplies in conventional fields. Sonatrach remains a mandatory partner in all exploration projects, with a minimum stake of 51 percent.

The blocks may contain conventional and unconventional reserves, Alnaft Chairman Sid Ali Betata said yesterday.

Algeria, a country of 38 million people that depends on oil and gas sales for two-thirds of government revenue, awarded exploration permits for nine of 36 areas on offer in the prior three bidding rounds from 2008 to 2011. Cia. Espanola de Petroleos SA, or Cepsa, was the only foreign company to bid in the previous round, winning one of 10 blocks offered.

To contact the reporters on this story: Salah Slimani in Algiers at sslimani2@bloomberg.net; Maher Chmaytelli in Dubai at mchmaytelli@bloomberg.net

To contact the editor responsible for this story: Stephen Voss at sev@bloomberg.net

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