Abdelmoumen Ould Kaddour, CEO, Sonatrach: Interview

Interview: Abdelmoumen Ould Kaddour

What is Sonatrach’s investment plan in terms of exploration and production for the years to 2022?

ABDELMOUMEN OULD KADDOUR: Sonatrach aims to strengthen Algeria’s energy potential, and fulfil the needs of national and international markets. Sonatrach’s medium-term plan for development outlines total investments of $56bn, of which $44bn will be dedicated to exploration and production. In terms of exploration, we aim to develop Algeria’s underground, which is currently underexplored, having an average density of below 20 wells per 10,000 sq km. Our activities will focus on drilling 80 wells per year and operating seismic surveys to generate qualitative prospects. We are hoping for 8500 km per year of 2D and over 20,000 km per year of 3D seismic surveys. Regarding production, our company is looking to increase investment in natural gas, as we are expecting to commission gas fields located in the south-west. In cooperation with our partners, we are bringing fields on-stream in Touat, Reggane and Timimoun in the short term. Other gas fields in the areas of Tinhert, Hassi Mouina and Hassi Ba Hamou will come on-line before 2022. These projects will increase our production capacity and allow us to maintain our exports around 100 tonnes of oil equivalent while fulfilling growing domestic energy needs.

How can Algeria benefit from its potential offshore and unconventional resources?

OULD KADDOUR: Algeria has potential offshore hydrocarbons resources that have been defined through seismic data, with two main geographical areas determined as priorities. Regarding shale gas, Algeria has the third-largest technically recoverable reserves in the world, with over 707trn cu feet. Algeria’s competitive advantage in shale gas development needs to be built up through more equipment and supply chain investments. We are also seeking to gain know-how by partnering with experienced international companies that are versed in processes such as horizontal drilling and hydraulic fracturing, among others. Ensuring the profitability of such projects will be challenging with current gas prices; therefore, the main benefits will first be job creation and the development of Algeria’s southern regions. Shale gas exploitation will develop logistics, transport and proppant sand production services, as well as support drilling equipment manufacturers.

What are Algeria’s goals in regards to the development of a petrochemicals industry?

OULD KADDOUR: Algeria aims to diversify its downstream portfolio in order to increase feedstock value, and boost the local economy in terms of wealth and job creation. The emergence of a petrochemicals industry is a priority axis for achieving this, as it will enable the country to become a global actor in petrochemicals and will lead the way for the emergence of local industry. In that regard, Sonatrach offers win-win partnerships with interested parties. For the 2018-22 period, eight main projects are being developed, five of which are partnerships to run in Arzew, as an ethane/liquid petroleum gas steam cracker facility, a propane dehydrogenation/ polypropylene facility and a methanol facility; and in Skikda, as a polyester production facility. All of these are planned to be brought on-stream in the medium term.

Where do you see Sonatrach by 2030?

OULD KADDOUR: Our ambitions for 2030 are directly inspired by large-scale changes in our sector, such as the evolution of the competitive environment. Sonatrach must embark on a major transformation to meet existing challenges. To this end, we launched the SH2030 Leading the Change project, which will enable us to define priority initiatives for the coming years. After making strategic choices, we will launch operational improvement projects to strengthen our performance. A diagnosis covering all of the company’s activities has already been carried out. We are now in the process of developing the first steps to be taken.