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    Sonatrach in Shale Pitch to Houston Investors

Summary

Sonatrach and its less fortunate neighbour Libyan NOC have been pitching this week for foreign investment or support.

by: Mark Smedley

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Natural Gas News, Africa, Corporate, Exploration & Production, Investments, Shale Gas , Political, Ministries, News By Country, Algeria, Libya, United States

Sonatrach in Shale Pitch to Houston Investors

Two key North African state oil and gas producers, Sonatrach and its less fortunate neighbour Libyan NOC, have been pitching this week for foreign investment or support.

Algerian state Sonatrach CEO Abdelmoumen Ould Kaddour spoke in Houston January 29 about the company’s revamped strategy to diversify into offshore exploration and (onshore) shale gas.  According to state news agency APS, he told the second Algerian-US Energy Forum that Sonatrach had a plan to invest $56bn over the next five years, details of which would be disclosed in February.

Deputy assistant secretary at the US State Dept’s Bureau of Energy Resources, Sandra Oudkirk, told the same forum that the US was interested in non-conventional development in Algeria, citing how such resources had transformed the US energy landscape, according to APS. Pro-shale sentiments however are not universally held in Algeria: a previous shale gas exploration push in 2015 was put on hold following widespread protests by desert communities anxious that scarce water resources might be rationed or polluted by fracking and worried by a lack of transparency from officials and Sonatrach itself. Algeria’s unproven technically recoverable wet shale gas reserves were estimated at 706.9 trillion ft3 (20 trillion m3) by the US Energy Information Administration in its latest 2013 figures.

Libya’s National Oil Corporation chairman Mustafa Sanalla meanwhile told an event in London January 30: “NOC is the foundation from which Libya can be regenerated. If NOC is lost, Libya will take a long time to be put back together.” Libya has withstood seven years of war and decades of dictatorship, whereas autocratic Algeria has enjoyed 16 years of calm, albeit also largely economic stagnation, since an estimated 200,000 people were killed between 1992 and 2002 in conflicts between the military and Islamists.

Sanalla told the Chatham House (RIIA) event that Libya faces three great challenges, all related: state capture, lack of economic justice, and lack of security.

He called on Libya’s government and Central Bank to declare how oil revenues are spent, saying the current lack of transparency is a threat to the survival of the country.  Much of the criminality in Libya, including smuggling and blockades of oil exports, is “the result of perceptions of unfairness, amplified by perceptions of corruption at the center, and an almost complete lack of transparency about the way the benefits of the state are distributed”.