Revenues from hydrocarbon exports for Algeria, one of the key oil and gas producers of Africa, fell more than 40% in 2015, reaching $35.7 billion against $60.3 billion of the previous year, the state news agency, Algerian Press Service (APS), reports citing data provided by the country’s Ministry of Finance.

According to the Ministry’s report, last year Algeria’s total export earnings also saw a decrease by more than 40% and amounted to around $38 billion, while in 2014 the figure exceeded $62 billion. Thus, oil and gas still account for at least 94% of the Republic’s export potential.

Previously, it was reported that by the end of 2015 Sonatrach, Algerian State Oil and Gas Corporation, would increase oil and gas production by 4.1% to 195 million tonnes of oil equivalent by boosting production in the regions of Hassi Rmel, Hassi Messaoud, Berkine and El Merk. By 2017, in accordance with the programme for hydrocarbon production increase, the production volume might reach 224 million tonnes of oil equivalent.

Amid the decline in oil prices, Algeria is facing a dramatic reduction in national income, which relies mostly on energy resource exports.

As stated in the annual report by Oxford Business Group (OBG), an international consultancy specializing in market research in the Middle East, Africa, Asia and Latin America, the Algerian government has begun to prepare an “ambitious plan” to boost oil and natural gas production through use of operating fields and discovery of new hydrocarbon reserves. At the same time, according to OBG, two-thirds of the country remain underexplored.

Speaking of the business environment and attracting foreign investments, the analysts note that Algeria has one of the lowest energy production costs in the world.

Background:

Algeria is a leading natural gas producer and one of the top three oil producers in Africa.

As of 2014, the country’s proved oil reserves were estimated at 12.2 billion barrels of oil equivalent (1.7 billion tonnes) and almost 6 billion barrels (840 million tonnes) of technically recoverable shale oil. Algeria’s proved natural gas reserves are estimated at approximately 4.6 trillion cubic meters, and another 1.4 trillion cubic meters are considered as undiscovered. It is also known that there are over 20 trillion cubic meters of recoverable shale gas resources. Algeria’s main hydrocarbon reserves are concentrated in the central and eastern regions of the country.

Since 2009, Gazprom International (as the operator, with a 49% share) in cooperation with Sonatrach (with a 51% share) has been carrying out a project in the El Assel licence block of the Berkine oil and gas basin, located 150 km southeast of Hassi Messaoud, the oil capital of Algeria. Over the period of joint operation, the partners have discovered three oil and gas fields.