Eni Seeks More Opportunity in Algeria
Eni CEO Claudio Descalzi was in Algeria on April 19 and met the country's prime minister Abdelmalek Sellal, energy minister Salah Khebri, and the CEO of its state producer Sonatrach, Amine Mazouzi.
A statement released by Eni said that its CEO outlined further opportunities for the relaunch of activities within the development of gas and oil in existing concessions in Algeria.
Eni said it has been present in Algeria since 1981 and now participates in 32 permits, with a daily production of 100,000 barrels of oil equivalent, making it the largest foreign producer in the country – so second only to Sonatrach.
Descalzi also expressed his hopes for the development of future collaboration in renewable energy.
Algeria is keen to expand in this sector but, even when oil prices were high, had not allocated much of its own investment to it. With oil prices low and revenues down, the government is now looking much more actively at ways to raise capital abroad for its oil, gas and renewable investments. It's possible too, a week after his visit to Iran, that Eni's chief was seeking to reassure Algerian leaders of Eni's continuing commitment to North Africa.
Descalzi last met Algerian leaders on November 3 2015.
On March 18 this year, the Eni chief told journalists in London he was reluctant to say much about latest gas contractual talks with Sonatrach: “We just signed an agreement with the Algerian government on price and volume. We can’t disclose anything about this – it’s very commercial. We’re going to start discussing again, as we do every year. In October we [last] started discussions.”
Eni’s April 19 statement said nothing about such talks.
Imports of Algerian gas into Italy by Eni, Enel and EDF-owned Edison, all of which buy gas from Sonatrach, were at their full long-term contractual level of about 20bn m³/yr level up to mid-2013, but were reduced with Sonatrach’s consent to half that volume for most of the period since. However, volumes have lately increased – possibly in line with a 9% increase in overall Italian gas demand last year. The other possible explanation is that prices paid for Algerian LNG on world markets are lower in some cases than Italian market prices, and that Sonatrach now wants its three big Italian customers again to receive their full take-or-pay volumes.
Mark Smedley