Al Jazeera: Algeria looks to develop shale gas sector

Algeria has announced plans to drill four shale gas wells by the end of 2014 as it begins assessing the commercial viability of a resource base estimated to be the third-largest in the world.

There are considerable doubts as to whether Algeria can successfully develop a shale gas sector, but it could be critical to maintaining the country's standing as an international gas exporter. Four shale gas wells will be drilled in the Illizi basin in the southeast and the Ahnet basin in the southwest in the next six months, according to a government statement in early July.

The announcement follows a Cabinet decision in May to drill 11 shale gas wells in the next 7 to 13 years.

Foreign Minister Ramtane Lamamra has touted the move as a "strategic decision destined to commercialise Algeria's considerable unconventional resources".

According to a study by the US government's Energy Information Administration, Algeria has 20 trillion cubic metres of recoverable shale gas reserves; only China and Argentina have a larger known resource base.

But only a small proportion of this is likely to be commercially viable. Industry experts estimate that the amount of marketable gas is likely to be in the range of two to four trillion cubic metres, although this would depend on a range of factors, including the extraction cost and the gas market price at the time of sale.

The government has already attracted interest from a range of companies, including ExxonMobil in the US, Italy's Eni and France's Total and GDF Suez. A pilot well was drilled in the Ahnet basin in 2012, and the energy ministry has included 17 shale gas prospects in its latest upstream licensing round, for which bids are due in October. MORE