The importance of security in Algeria should not be underestimated. This is a country that plays an extremely crucial role in the global oil and gas market, with some 160 trillion cubic feet of natural gas reserves. In the Arab world, Algeria is the third largest producer of natural gas after Qatar and Saudi Arabia, and its state-owned Sonatrach is the largest gas producer in Europe. To Europe, Algerian gas supplies are critical and the development of shale and tight gas reserves are also being eyed hungrily. Algerian officials recently said the country had between 300 and 500 trillion cubic feet of technically recoverable tight gas and 700 trillion cubic feet of shale gas untapped.
We don’t usually think of Algeria as a major oil play, though, but this should change your perspective. The EIA estimates that Algeria has crude oil reserves of about 12.2 billion barrel, and plenty of analysts out there think that we could see a doubling of Algeria’s oil production in the next decade because the Sahara is relatively unexplored and untapped.
Most of Algeria’s oil reserves have been discovered in the eastern region, and this is where all the production is. But exploration is now taking place in the south-western region, and we’re also looking at the onset of offshore drilling and the development of shale plays. Other, mature basins are also seeing new discovery, deeper down, adding to reserves quickly.