• 13 hours Iraq Begins To Rebuild Largest Refinery
  • 17 hours Canadian Producers Struggle To Find Transport Oil Cargo
  • 19 hours Venezuela’s PDVSA Makes $539M Interest Payments On Bonds
  • 20 hours China's CNPC Considers Taking Over South Pars Gas Field
  • 22 hours BP To Invest $200 Million In Solar
  • 23 hours Tesla Opens New Showroom In NYC
  • 24 hours Petrobras CEO Hints At New Partner In Oil-Rich Campos Basin
  • 1 day Venezuela Sells Oil Refinery Stake To Cuba
  • 1 day Tesla Is “Headed For A Brick Wall”
  • 2 days Norwegian Pension Fund Set to Divest From Oil Sands and Coal Ventures
  • 2 days IEA: “2018 Might Not Be Quite So Happy For OPEC Producers”
  • 2 days Goldman Bullish On Oil Markets
  • 2 days OPEC Member Nigeria To Issue Africa’s First Sovereign Green Bond
  • 2 days Nigeria To Spend $1B Of Oil Money Fighting Boko Haram
  • 2 days Syria Aims To Begin Offshore Gas Exploration In 2019
  • 2 days Australian Watchdog Blocks BP Fuel Station Acquisition
  • 2 days Colombia Boosts Oil & Gas Investment
  • 3 days Environmentalists Rev Up Anti-Keystone XL Angst Amongst Landowners
  • 3 days Venezuelan Default Swap Bonds At 19.25 Cents On The Dollar
  • 3 days Aramco On The Hunt For IPO Global Coordinators
  • 3 days ADNOC Distribution Jumps 16% At Market Debut In UAE
  • 3 days India Feels the Pinch As Oil Prices Rise
  • 3 days Aramco Announces $40 Billion Investment Program
  • 3 days Top Insurer Axa To Exit Oil Sands
  • 4 days API Reports Huge Crude Draw
  • 4 days Venezuela “Can’t Even Write A Check For $21.5M Dollars.”
  • 4 days EIA Lowers 2018 Oil Demand Growth Estimates By 40,000 Bpd
  • 4 days Trump Set To Open Atlantic Coast To Oil, Gas Drilling
  • 4 days Norway’s Oil And Gas Investment To Drop For Fourth Consecutive Year
  • 4 days Saudis Plan To Hike Gasoline Prices By 80% In January
  • 4 days Exxon To Start Reporting On Climate Change Effect
  • 5 days US Geological Survey To Reevaluate Bakken Oil Reserves
  • 5 days Brazil Cuts Local Content Requirements to Attract Oil Investors
  • 5 days Forties Pipeline Could Remain Shuttered For Weeks
  • 5 days Desjardins Ends Energy Loan Moratorium
  • 5 days ADNOC Distribution IPO Valuation Could Be Lesson For Aramco
  • 5 days Russia May Turn To Cryptocurrencies For Oil Trade
  • 5 days Iraq-Iran Oil Swap Deal To Run For 1 Year
  • 8 days Venezuelan Crude Exports To U.S. Fall To 15-year Lows
  • 8 days Mexico Blames Brazil For Failing Auction

Breaking News:

Iraq Begins To Rebuild Largest Refinery

Alt Text

Oil Price Boom Keeps Lid On Natural Gas Prices

Natural gas demand remains robust…

Alt Text

Egypt Takes Giant Step Towards Energy Independence

A recently discovered gas field…

Alt Text

Putin Inaugurates $27 Billion LNG Arctic LNG Plant

Russian President Vladimir Putin is…

Europe Hot for Algerian Shale Gas

Europe Hot for Algerian Shale Gas

The Sahara desert is being billed as a potential cure for the European Union’s gas problems, and all eyes are on Algeria’s 321 trillion cubic feet of recoverable shale gas.

In money terms, this is about $2.6 trillion in gas at the current UK prices.

Algeria, for its part, is keen to promote this image and taking serious steps to boost investor confidence. To that end it is offering tax breaks to potential explorers.

Infrastructure is already in place in the form of Mediterranean pipelines connecting Algeria to Spain and Italy.

Algeria’s gas estimates come from the International Energy Agency. 

Where are we with legislation? The newly announced tax breaks still need parliamentary approval, but officials are confident they will get it in a matter of weeks.

Related Article: Let the Fracking Begin in Europe - Very Cautiously

Who’s being lured in by the promise of tax breaks? For starters, ExxonMobil Corp (XOM) is reportedly in talks with the government over shale. A number of majors have already signed exploration agreements, including Eni SpA (ENI), Royal Dutch Shell Plc (RDSA) and Canada’s Talisman Energy Inc. (TLM).

Eni has already begun exploration, and Shell and Talisman will dig their first exploration wells soon.

Algeria plans to outpace its neighbors, and is already working out how to import hydraulic fracturing technology to speed things along.

It could be the answer to the EU’s dilemma. Fracking has been hindered in the EU over environmental concerns. While the EU recently rejected a proposal that would ban fracking, individual EU member countries will still make it difficult if not impossible. But they have no qualms about supporting fracking in Algeria’s deserts as an alternative to Russia’s gas stranglehold.

Related Article: When Trading Natural Gas, Don't Forget This Fund

The potential is that Algeria could double production in the next two decades and might be able to export as much as 110 billion cubic meters by 2030.

So far, investors seem confident, and the new tax package would go a long way to solidify that confidence. Contractual terms are already favorable and the new tax law, if passed, will adjust royalty fees for levels of production. It will also adjust taxes on oil revenues to be proportionate with exploration difficulty and exploration risk. 

But Algeria is just getting off the starting blocks, and commercial viability has yet to be determined. This will require the drilling of more than 400 test wells.

There’s also this: Compared with Libya, Algeria is a model of stability. Even though investors are increasingly foraying into high-risk areas with an unusual amount of bravery, if Algeria’s reserves prove commercially viable on the level predicted, the relative political stability will make it a very attractive venue.

By. Jen Alic of Oilprice.com




Back to homepage


Leave a comment
  • Beatriz on December 11 2012 said:
    the longer term qusiteon is - once we are having to go after the "far" resources - how will they compete in cost to alternative fuels or more efficient use?That is a good point, Larry. But, since we are talking about the long term, infrastructure may not be an issue. If these reserves become economically viable to drill, the infrastructure will (likely) follow. Assuming, of course, someone believes the return on investment is great enough.

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News