Algeria has launched a licensing round for 10 oil and gas contract areas, according to a Reuters report, setting the stage for a new test of whether the OPEC member can revive lacklustre foreign interest in its energy sector. In the previous two bid rounds, many of the contract areas on offer went unclaimed, with some international energy firms saying the financial terms were too tough and the prospects were not attractive enough.
Algeria, which supplies about a fifth of Europe’s gas, needs foreign know-how to meet its targets for raising energy exports, and some analysts say the country risks falling behind if it does not quickly bring in more foreign partners. ALNAFT, the government agency which adminsters licensing rounds, said the deadline for companies to submit their bids was 3 March, 2011. The contract areas on offer are said to ‘present high potential in terms of petroleum resources’.
Out of the 10 contract areas on offer, eight have not been included in the two previous licensing rounds. The bid round includes three contract areas in the Illizi basin, on Algeria’s border with Libya, where both BP and Irish firm Petroceltic have reported commercial discoveries. The licensing round will be the first since Chakib Khelil, energy minister for a decade, was removed from his post in a government reshuffle in May and replaced by industry veteran Youcef Yousfi. In the previous licensing round, completed in December last year, only three out of 10 permits on offer were awarded. In the round before that, contracts were awarded for only four of the 16 licences that were initially offered. Algerian officials have blamed the lack of interest on the effect of the global economic downturn. Yousfi has not given any indication of whether he plans to change the terms for the next licensing round to make them more attractive to investors.Companies pre-qualified by ALNAFT as operator and/or investor have been invited to express interest to participate in the licensing round for the contract areas (see table).
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