Oct. 7 (Bloomberg) -- North Africa may be “the next big opportunity” after North America for oil and gas production from shale if drilling costs can be reduced, said Repsol SA Geological Studies Director Eduardo Negri.
“Repsol has conducted a regional study covering the whole Saharan Platform in order to identify prospective areas for shale gas and oil from a geological point of view,” he said by e-mail before an industry conference in Tunisia planned for Oct. 22. “One of the most important things required to consolidate a successful unconventional project is to have clear and stable contractual and fiscal terms specially designed for unconventionals.”
Algeria’s oil and gas output should double in seven to 10 years as it brings on stream fields in under-explored regions and develops reserves of shale and tight gas, Energy Minister Youcef Yousfi said Oct. 1. Algeria, Africa’s largest gas producer, this year decided to ease fiscal terms to attract investment in remote and unconventional deposits. Repsol, based in Madrid, is developing three areas in the country, according to the company’s website.
In neighboring Libya, the state-run National Oil Corp. said on Sept. 11 it may invite specialized companies to assess shale oil and gas reserves and make provisions for their extraction in a petroleum law being drafted. Repsol operates at two blocks in Libya and is exploring for oil and gas in six additional areas, it said on its website.
Algeria is set to become the biggest supplier of tight gas in the Organization of Petroleum Exporting Countries, and Libya the group’s largest source of tight oil, OPEC Secretary-General Abdalla El-Badri said at a conference in Kuwait today. El-Badri also said OPEC’s own crude oil is indispensable to world markets and that U.S. oil shale production will start to decline in 2018.
“The current drilling and completion costs are still high in North Africa,” Repsol’s Negri said. “This is something that can be worked on if service companies take special effort in preliminary evaluation steps in order to show how they can reduce costs, thinking about massive operations in the future.”
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