Algeria national energy firm Sonatrach is working to introduce new technologies to offset declining production decline and optimize output, as the company lags in deploying the latest technologies in its fields.
Speaking at the opening ceremony of Sonatrach’s Scientific and Technical Days (JST11) event, which took place April 16-19 in Oran, Algeria, Sonatrach CEO Abdelmoumene Ould Kaddour said the company is looking to use technology to improve efficiency and boost production. Algeria must “find solutions for raising its reserves, including using technologies to reduce costs and optimize its output,” Ould Kaddour told conference attendees.
Sonatrach is intensifying efforts to deploy technologies at its brownfields and greenfields, Ould Kaddour said, as the company aims to raise stagnant output in both oil and gas, which make up 97% of state income. He also said partnerships with major technology developers is crucial to achieving this objective, given technical challenges the company faces.
Algeria’s reservoirs, which require EOR techniques, have a recovery factor of less than 20%, compared to 34% in Egypt. In terms of exploration, Algeria is underexplored, with less than 20 wells per 10,000 sq km. The company plans to drill 80 wells annually and conduct seismic surveys to generate prospects. Sonatrach hopes for 8,500 km per year of 2-D and over 20,000 km per year of 3-D seismic surveys by 2022.
In addition Ould Kaddour said the company is seeking to double its oil and gas production capacity over the next 10 years as part of Sonatrach’s new development strategy for 2030. “We are trying to become independent from oil price volatility and dependent on the volume,” said Ould Kaddour, adding the oil market “is unpredictable, hence the need to work day to day to cope with fluctuations.”
Sonatrach plans to unveil details of its new strategy, called Project SH2030before the end of this month. The new strategy, which outlines the company’s priorities and objectives for the next decade, seeks to reform the state-owned firm and give it a long-term strategy. The CEO’s vision is to turn Sonatrach into an integrated energy company by 2030, with clear objectives and an implementation plan. The strategy, he added, will also examine ways to diversify the company’s business, including whether renewables such as solar energy should be part of the plan.
A key component of the new strategy, said the CEO, is the digital transformation. “We want our people to be innovative in doing business, instead of relying on administrative and bureaucratic procedures,” the Algerian Press Agency quoted Ould Kaddour as saying earlier.
Since taking the helm of the company in March 2017, Ould Kaddour has actively worked on promoting the company as a reliable partner for its foreign investors.
Following a decade of negative news mainly related to corruption, red tape and delays or cancelations of project, Sonatrach managed to improve the situation and move to the next chapter. The company amicably solved disputes with foreign partners and signed new deals.
During JST11 in Oran, Sonatrach and Italian firm Eni signed a series of agreements aimed at strengthening the two companies’ relationship in jointly operated activities in Algeria. The two firms have also signed agreements to continue their R&D collaboration, after the agreements ended in November 2016.
Plus, Sonatrach signed a cooperation agreement with the Algerian Space Agency (ASAL) to provide Sonatrach with space data and images as well as satellite communication systems. “This agreement is part of our drive to strengthen our technology acquisition and to boost coordination between the two parties through the exploitation of space technologies,” Ould Kaddour said.
On the sidelines of JST11, Sonatrach also signed a collaboration agreement with the Iraqi oil ministry, regarding the state energy firm’s possible participation in developing Iraq’s Nassiriya oil field.
This comes as the Sonatrach and Baker Hughes, a GE company, work to build a manufacturing facility in Algeria aiming to strengthen country’s position in the upstream oil and gas market and to meet local demand. The two announced the plan in November 2017. The new facility is set to be operational in December 2019. A new company formed by the two will provide manufacturing, assembly and maintenance for various types of oilfield equipment, including wellheads, christmas trees, BOPs and valves, establishing a major base to fulfill Algeria’s increased domestic upstream requirements with the potential for future exports.