In a previous article on Algeria, Dr A. Mebtoul wrote on the meeting of May 24th, 2016 between the EU and Algeria on energy strategies that should go beyond the strict framework of energy supplies. In effect, officials from Algeria, the European Union and energy firms met as planned in Algiers so as to try and get an energy cooperation going and possibly see if there were ways to increase the current supplies levels. Most are however aware that this will be a first step on the long and winding road to better cooperation.
The reasons are as all say that Algeria has problems that did hamper it over the past decades. Most reckon that these fundamentally come from a “combination of a glacial bureaucracy, tough contract terms, security worries, delayed projects and turmoil at state oil company SONATRACH.”
Reuters today produced this UPDATE 1- of an article that is reproduced here.
European Union and energy firms court Algerian gas cooperation . . .
.Written by Patrick Markey and Hamid Ould Ahmed and published on May 24th, 2016.
ALGIERS May 24 (Reuters) – European Union officials and energy firms urged Algeria on Tuesday to adapt to more competitive energy markets so as to attract the investment needed to pump more gas north again after years of dwindling exports.
Algeria is seen as a natural partner for the European Union as it looks to diversify energy supplies after the Ukraine conflict again exposed the risks of relying too much on the bloc’s top gas supplier, Russia.
The North African country is the EU’s third biggest gas supplier behind Russia and Norway, yet its export capacity through three pipelines and LNG shipments across the Mediterranean Sea is widely underused.
Declining European demand has cut into Algerian exports, but the amount of gas for export has also been hit by a combination of slowing production from mature fields, low investment and Algeria’s own rapidly expanding need for gas to generate power.
“Algeria needs to bring in more investment if it is to maintain its exports to the EU in the long term,” EU Climate and Energy Commissioner Miguel Arias Canete told a business forum in Algiers on Tuesday. “If this continues in the long term, then Algeria’s position as a key supplier may be compromised.”
Algeria’s long-term gas contracts to Europe are due to expire through 2021 and European companies are pushing for more flexible deals given the more competitive gas market, though Algerian officials appear committed to long-term arrangements.
Algeria has dozens of projects, mostly in its southern Sahara, that the government expects to generate new production and help keep its flow of gas exports to Europe stable. But it has failed to attract the investment needed to discover and develop new fields and maintain old ones.