Flagged up: Algeria's spending plans
Algiers unveils $63.5bn cash splash
Algeria plans to pump $63.5 billion into its energy sector from now until 2013 to boost gas exports and maintain oil output capacity, Energy & Mines Minister Chakib Khelil said today.
Low oil prices were not stopping the investment, Khelil said, as Algeria was expecting a longer-term price of around $70 to $80 a barrel, Khelil said.
"And we don't need that much for these projects to fly," Reuters quoted him as saying. "We will need $40 to $50."
US oil prices stood at just under $47 a barrel today, down $100 from a peak last July. Producer countries worldwide have stated that lower prices will hamper investment in expanding capacity.
Algeria's investment will allow the third largest supplier of natural gas to the European Union to boost total gas exports by over 60% by 2015, Khelil told a news briefing in Vienna.
Gas exports should rise to 100 billion cubic metres per year by then, from around 62 Bcm now, he said.
Investment in developing new oilfields will compensate decline in older fields and keep the Opec member's production capacity steady at around 1.4 million barrels per day, Khelil said.
Algeria had no plans to sweeten terms for foreign oil and gas companies after seeing little interest for an oil and gas bidding round in December, Khelil said.
The bidding round had simply been poorly timed as the global financial system imploded and dulled appetite for risk among oil companies, he said.
"I still don't consider it a failure if you still achieve $270 million investment in exploration," he said. "It is better to have four big companies than 10 small companies which don't have very deep pockets and end up in problems."
Algeria may hold another bidding round before the end of they year, Khelil said.
BG Group, Eni, E.ON and Gazprom won licences in the last round.
Algeria had discovered four new gas fields in the past two months and was working on verifying another three discoveries, he said.
The country has also approved a $5 billion gas pipeline to link new supplies from three new remote desert projects to the country's gas export syštem, he said.
Algerian officials have previously said the projects would have capacity to produce up to 10 Bcm of gas per year. The $4 billion of ventures involve variously GDF Suez, Total and Repsol YPF.
Two new 120,000 bpd oil projects will help Algeria compensate for declining output elsewhere, Khelil said.
One of them, the El Merk development with ConocoPhillips and Anadarko would cost around $3 billion, he said.