Algeria to Ramp Up Gas Output While Putting Shale on Backburner

ALGIERS, Capital Markets in Africa: Algeria plans to raise natural-gas production almost 30 percent by the end of the decade though won’t tap its vast shale reserves for now.

The North African country aims to pump 122 billion cubic meters of gas by 2020, up from 96 billion cubic meters currently, Energy Minister Noureddine Boutarfa said in an interview in Algiers. Conventional production, rather than shale, is the “immediate priority,” he said.

Africa’s largest gas producer has seen output decline over the past decade due to a combination of aging fields, laws that deter outside investors and security fears following a 2013 terrorist attack that killed foreign workers. State energy company Sonatrach has said Algeria should drill its shale-gas reserves — estimated at 20.3 trillion cubic meters by the U.S. Energy Administration — yet development plans have been met with local protests.

“Is shale gas an immediate priority? No,” Boutarfa said on Sunday. “We just need to get ready, develop the most adapted technologies and mostly assess what the profitability of this shale gas is.”

Subsidy Cuts
Boutarfa, sworn in as minister of energy and mines in June, is an advocate of higher domestic energy prices to help counter declining export revenue. Keeping prices low has been costly for the government and encouraged consumption.

Algerians can expect more energy-subsidy cuts, which must “go hand-in-hand with improved purchasing power for households and industries,” Boutarfa said in the interview. The government will aim to reduce subsidies as part of an “overall reform of the economy,” he said.

Algeria, a member of the Organization of Petroleum Exporting Countries and the host of this week’s informal OPEC talks, also plans to raise crude-oil output. The nation targets annual production of as much as 52 million metric tons (1.04 million barrels a day) by the end of the year, according to the minister. That compares with 49 million tons in 2015.

Source: Bloomberg Business News