Algeria uncovered the largest new oil field in the country in more than 20 years, officials announced last month.
Sonatrach “discovered a new oilfield with around 1.3 billion barrels in the Amguid Messaoud basin in the north central part of Algeria”, Energy Minister Youcef Yousfi said October 26th.
The site is around one hundred kilometres from Hassi Messaoud, Algeria’s biggest oilfield. The minister said it would be developed over the next three or four years.
This new discovery has rekindled the debate between the Algerian political classes and economists over the economy’s almost total reliance on income from the oil industry.
Rachid Mouni, an Algeria Green Alliance MP, said that the dependence on oil revenues “gives a false impression of the national economy. Economic and financial indicators show Algeria to be in a comfortable position, whereas the reality is quite different, with the economy still vulnerable.”
That vulnerability was clear from the figures issued November 7th by the chairman and managing director of the Algerian export insurance and guarantee company CAGEX, Djilali Tariket.
He said annual receipts from Algerian exports excluding oil and gas were “estimated at just two billion dollars”.
Meanwhile, Mohamed Djemai, an MP for the FLN, suggested taking advantage of the country’s comfortable financial situation resulting from high oil prices to diversify sources of income.
He suggested “providing material and moral support for investors, whilst focusing on the creation of SMEs to stop unemployment in its tracks, to encourage industrial subcontracting, and to train a qualified workforce able to undertake the various development programmes”.
According to experts, Algeria should reduce its oil production in order to conserve its reserves for future generations.
One expert and former energy minister, Nordine Ait-Laoussine, said on November 6th that Algeria “owes it to itself to exploit shale gas to continue to export its target quantities of natural gas”.
“It must choose one or the other. If we do not start to exploit shale gas, then we must start to reduce export capacities to ensure our children can have natural gas,” he pointed out in a statement to APS.
In 2013, Algeria gave the green light for shale gas extraction following an amendment to the law on hydrocarbons.
Algeria has reserves estimated at 600 trillion cubic metres of shale gas. That figure, if confirmed, would be four times Algeria’s current conventional reserves.
Ali Hached, an advisor to the energy minister, claimed that peak oil was “a myth and doesn’t exist”.
“Peak oil does not exist, we shall continue to have it for the next 50 years,” the advisor asserted.
He went on to deny a decline in deposits, stating that Algeria’s reserves were on the whole sufficient to meet its long-term requirements.
“Algeria needs to rebuild a national consensus on energy which will unify Algerians’ views on how to develop this strategic sector, which generates nearly 98% of the country’s revenue,” according to Mohand Amokrane Cherifi, a member of the presidential body of Front of Socialist Forces (FFS).
That consensus, according to Cherifi, must result in “transparent management of this sector, which must make public all the information about the Sonatrach group’s share in the planned production”.