Junior executives of Oxy and Chevron, affiliated with the US-Algerian Business Council (USABC) traveled to Algiers on 21 January 2024 as part of a 26-people delegation representing various sectors seeking opportunities in Algeria. Among the most noticeable companies taking part in the trip are two US oil majors, Oxy and Chevron, that have long been supporters of USABC and which are looking for opportunities to engage in oil and gas production activity as demand for Algeria’s gas in Europe remains strong.
Separately, on 9 January 2024 executives from another US oil major, ExxonMobil visited Algeria and held talks with industry leaders in the North African country. Sources in Algeria say both Oxy and Chevron have engaged in talks with Algerian state-owned oil firm Sonatrach. Although the outcome of the talks is unclear, sources within the trade mission indicated that the two parties may have reached some basic agreement paving the way for the two US companies to start work in Algeria.
The visit of the American delegation drew a great deal of fanfare from the local media, essentially creating an expectation of immediate contract signing. But the American companies appeared and still are in a hurry to ink a quickly drawn contract. Given the investments needed to run exploration and production operations, issues of security and the state of regional and global geopolitics, those committing investments have to ensure contracts are written in terms that secure their commitments. On 2 June 2023, an article from a US publication reported on ongoing negotiations between ExxonMobil and Chevron and the Algerians on exploration in the Sahara. The news was immediately magnified by the Algerian press as a fait-accompli, claiming the two parties reached a final deal. The Algerian press even quoted in June 2023 Minister of Energy, Mohamed Arkab, stating agreements between Algeria and the two oil companies “will be completed by the end of 2023.” Fast forward six months later, no contract has been signed yet.
Broadly, though, the Algerian government’s priority appears to be the development of conventional gas resources, with talks with the US companies targeted at both that specific sector as well as shale gas. Algeria is looking to raise production volumes, leveraging its three key pipelines to move products to the European markets, and attempting to contain competition from the United States and Qatar in the liquefied natural gas (LNG) sector.
Specifically, sources say Chevron is said to be interested in three oil and gas basins in the Algerian Sahara: Ahnet in the south; Gourara in the center of the country; Berkine in the east, near the borders with Libya and Tunisia.
Algeria is also looking to start producing hydrocarbons in large areas of the country that have not been exploited thus far. Algeria is reported to be extracting oil and gas on only 47% of the 1.5 million square kilometers of exploitable zone. The remaining 53% territory could fetch more conventional gas, according to Arkab.
