Algeria is important to world energy markets because it is a significant producer and exporter of crude oil and natural gas. Algeria's membership in OPEC and importance as an energy source for Europe also underscore the potential ramifications of the country's ongoing political instability.

To print this report, please download the PDF file and print it from Adobe's Acrobat Reader.

GENERAL BACKGROUND
Algeria continued to experience political and economic uncertainty in 1997, with tensions between the Algerian government and Islamic militants still running high. In November 1996, President Zeroual initiated a number of political reforms in an attempt to avoid repeating the disastrous December 1991 general elections in which the government annulled the election results and imposed a state of emergency after the now banned Islamic Salvation Front (FIS by its French acronym) had won 81 percent of the votes. The reforms began with the adoption of a proportional electoral system to prevent a sweep by one party. Opposition parties would be allowed to continue participating in the political process, but they were forced to eliminate references to religion, ethnicity, language, and regionalism in their platforms. In addition, a new constitution was adopted creating a two-chamber legislative body, a supreme court and a presidency limited to two, five-year terms in office. These reform measures were enacted in preparation for the June 1997 parliamentary elections and the October 1997 regional and local elections.

Parliamentary elections were held in early June 1997. Out of 380 seats in the new legislature, the newly formed National Democratic Rally (RND from French acronym) won 155 seats and the National Liberation Front (FLN) won 64 seats. Two moderate Islamist parties, Movement of Society for Peace (formerly Hamas) and Ennahdha, took 69 seats and 34 seats respectively. Opposition parties, represented mainly by Front des Forces Socialistes (FFS) and Rally for Culture and Democracy (RCD), each won 19 seats. Remaining seats were apportioned between various other small parties. Following the elections, opposition parties complained bitterly about voting irregularities and some UN observers indicated that they did not have free access to all polling stations. Despite the controversy, the Organization of African Unity and the Arab League of Nations gave their stamp of approval to the election results.

Local and regional elections were held on October 23, 1997 with similar results. The winners in these elections were the two pro-government parties, RND and FLN, and the Movement of Society for Peace. President Zeroual's RND party won more than half the seats at stake in the local races and scored similar victories in the regional races. These elections were marred by even more controversy than the parliamentary elections. Pro-government and opposition parties alike protested the results claiming widespread fraud and called for the results to be revised or thrown out. In the aftermath, 30,000 people took to the streets of Algiers on October 30, 1997 in protest, while several political parties tried to shut the country down by calling for a general strike on November 12, 1997. Workers heeded government warnings not to observe the three-hour work stoppage, and Algerian police cut off plans for a national march set for November 13, 1997.

The death toll from the Algerian government's six-year conflict with the FIS and the Armed Islamic Group (GIA) is now estimated at around 75,000. Much of the fighting is centered in Algiers and coastal towns in the country's northern area. The continuing conflict started after the government's annulment of results from the December 1991 general elections. Escalating political violence and terrorism then led to government repression and the imposition of a state of emergency. Both the Algerian government and the FIS have made efforts at various times during the past six years to further the peace process. These efforts have met with some success, including the January 1995 Rome Accord, and the release from jail of Abbasi Madani, the 66-year old leader of the FIS, on July 15, 1997. However, violence and turmoil has been on the rise again in recent months. Following the massacres of nearly 300 civilians on August 28-29, 1997 and Madani's offer to participate in a UN sponsored dialogue for peace, Madani was placed back under arrest on September 1. More recently, 43 people were killed at a fake roadblock in the town of Sig located near the western port of Oran in October 1997, 18 people were injured after two bombs exploded in Algiers in November 1997, and 28 more were killed at another fake police roadblock between the towns of Slissen and Tajmout also in November 1997. No individual or group has claimed responsibility for the recent slayings.

Despite all the violence and political controversies and conflicts, Algeria's economy continues to move in a positive direction. President Zeroual has successfully resumed the IMF-approved macroeconomic stabilization program, originally begun in 1989, that includes devaluation of the dinar, major cuts in state subsidies, a reduction in the budget deficit, and the initiation of a gradual privatization program. In addition, Algeria's state-owned oil and gas company Sonatrach has initiated a $28 billion investment program. The program is designed to transform Sonatrach into a trans-national company with both upstream and downstream ventures overseas and to further develop Algeria's oil and gas resources in conjunction with foreign partners. Although still considered risky due to the resurgent violence, Algeria has continued to attract foreign investments for its oil and gas industries.

Algeria has experienced strong growth in gross domestic product (GDP) over the last few years. For 1997, GDP is expected to expand to 5.5 percent, up from 5.0 in 1996 and 3.5 percent in 1995. A 6.0 percent growth rate is projected for 1998. Although inflation remains in double digits, it has steadily declined since 1995. Inflation is expected to drop to 23.5 percent for 1997, down from 26.6 percent in 1996 and 32.2 percent in 1995. This steady decline is projected to continue in 1998, reaching single digits by 2001. Improved agricultural sector performance and higher oil and gas export revenues helped to boost Algeria's overall economic performance and offset losses by non-hydrocarbon industrial sectors brought about by militant-led sabotage of infrastructure. Oil and natural gas export earnings comprise about 95 percent of total export revenues. However, the government has plans to diversify its export base and boost non-hydrocarbon exports from just over $500 million in 1996 to $2 billion per year by 2000. Unemployment, however, continues to be a problem. The unemployment rate is estimated at 30 percent for 1997.

Oil and Gas Sector Security
Although most of Algeria's political violence involves FIS and GIA attacks on the country's army and police force, foreigners, public officials, and civilians all have been targeted. The country's oil and natural gas industry continues to remain relatively unscathed, due in part to the remote southern location of most oil and gas fields and production facilities. In April 1995, the government created four "exclusion zones" to protect oil and gas facilities and personnel in the producing centers of El Oued, Laghouat, Illizi, and Ouargla. Within these zones, traffic and shipments are regulated by army and police units. Most oil and gas pipelines, though unguarded, are deeply buried and well protected against sabotage. However, the TransMediterranean pipeline, linking Algeria and Italy, experienced a brief disruption in November 1997. A fire caused damage to two valves located about 12 miles from the Tunisia border. The fire was reportedly set by anti-government forces, but a particular group has not been identified.

OIL
Although oil was first discovered in Algeria at the Hassi Messaoud oil field in 1956, Algeria is considered to be under-explored. Algeria's National Council of Energy believes that the country still contains vast hydrocarbon potential. Algeria and state-owned Sonatrach have put forth great efforts in recent years to change this situation. Over the last three years, significant oil and gas discoveries have been made, largely by foreign companies. Under a government program for 1996-2000 launched in April 1996, Sonatrach and its foreign partners will attempt to increase Algeria's crude oil production to 1.4 million bbl/d by 2000. Included in this program are provisions for 300 exploration wells to be drilled between 1996 and 2000, half by Sonatrach and the other half by foreign companies.

Official estimates of Algeria's proven oil reserves remain at 9.2 billion barrels. However, with the recent oil discoveries, plans for more exploration drilling, improved data on existing fields, and use of enhanced oil recovery (EOR) systems, proven oil reserve estimates are expected to be revised upward in coming years. Algeria should also see a sharp increase in crude oil exports over the next few years due to a rapid shift towards domestic natural gas consumption and planned increases in oil production by Sonatrach and its foreign partners. Approximately 90% of Algeria's crude oil exports go to Western Europe, with Italy as the main market followed by Germany and France. The Netherlands, Spain and Britain are other important European markets. The United States makes up a significant portion of the remaining 10% of Algerian crude exports. Algeria's Saharan Blend oil, 45^o API with 0.05% sulfur and negligible metal content, is among the best in the world.

Between 1994 and 2004, Sonatrach plans to invest $20 billion in the development of Algeria's oil and natural gas reserves. This amount is expected to be targeted at exploration ($2.5 billion), enhanced oil recovery (EOR) at mature fields ($5 billion), dry gas field development ($2 billion), wet gas field development ($6 billion), and expansion of the country's pipeline infrastructure ($4.5 billion).

Oil Production
In the first half of 1997, Algeria produced about 842,000 barrels per day (bbl/d) of crude oil, a little more than 90,000 bbl/d above its 1997 OPEC quota of 750,000 bbl/d. In addition, over the same period, Algeria's total oil production included an estimated 430,000 bbl/d of lease condensate and 145,000 bbl/d of natural gas plant liquids, both of which are excluded from the OPEC quota. However, on November 29, 1997 OPEC announced that it would raise its crude production ceiling from 25.003 million bbl/d to 27.5 million bbl/d effective January 1, 1998 for the first half of 1998. All member countries received a quota increase with Algeria's new quota set at 908,500 bbl/d.

Sonatrach controls the majority of Algeria's oil and gas producing fields. In 1996, the company had a crude production capacity of around 750,000 bbl/d. The largest oil field in Algeria is Hassi Messaoud, which produces just under 400,000 bbl/d of 46^o API crude. The Hassi Messaoud area contains an estimated 6.4 billion barrels, or about 70 percent of the country's proven oil reserves. The Hassi Messaoud field contains northern and southern reservoirs, which produced 153,000 bbl/d and 238,500 bbl/d, respectively, in 1995. Sonatrach operates Algeria's other major oil fields, including Tin Fouye Tabankort Ordo (68,400 bbl/d), Zarzaitine (32,500 bbl/d), Haoud Berkaoui/Ben Kahla (33,300 bbl/d), Rhourde el-Baguel (27,000 bbl/d), el-Gassi el-Agreb (30,800 bbl/d), and Ait Kheir (22,000 bbl/d). The Hassi R'Mel gas field also produces around 18,000 bbl/d of 46.1^o API crude.

In January 1997, a joint venture between Lasmo, Anadarko, and Maersk Oil announced the discovery of a new oil field and the successful appraisal of a previous discovery. The El Kheit Et Tessekha No 1 (EKT-1) well, drilled in the northwest corner of block 208 in the Ghadames Basin marked a new oil field discovery. It was the the partnership's seventh discovery in ten wildcat wells drilled through January 1997. The well flowed at sustained rates of 13,568 bbl/d of 48.8 gravity crude oil and 8,800 Mmcf/d of gas. The next step for the joint venture is to drill more wells to deliniate the new field. In the central part of block 208 at the El Meik East (EME) field, the EME-2 well confirmed the EME-1 discovery. It was the first appraisal well at the EME field and drilling tests were done in three zones. The first zone flowed 3,473 bbl/d of condensate and 25 Mmcf/d of gas. The second zone flowed 3,878 bbl/d of condensate and 25 Mmcf/d of gas. The third zone flowed 11,176 bbl/d of oil and 13.9 Mmcf/d of gas. Results from EME-2 are being evaluated, and the partners are considering an additional apppraisal well to further delineate the reservoir. Anadarko estimated that reserves from its Algerian discoveries as of January 1997 total 1.5 billion barrels of oil.

In another joint venture agreement signed in May 1997, Union Texas petroleum acquired a 30% working interest from Phillips Petroleum for the Bordj Messouda blocks 406B and 209 in southeastern Algeria. Phillips serves as the operator on the two blocks and retains the remaining 70% working interest under the agreement. Blocks 406B and 209 comprise a total of about 1.5 million acres of which about 975 miles of 2-D seismic data has already been acquired. Phillips and Union Texas plan to begin drilling one of two exploratory wells by the end of 1997.

Although Algeria has been experiencing a significant influx of foreign investment in recent years, it still has many oil fields in need of additional foreign capital and EOR investment. Hassi Messauod, Algeria's first and largest oil field, is 617 square miles in area and produces 48^o API oil exported through the Bougie terminal. Problems at this field began as early as 1984, and by 1989 the field was producing only about 300,000 bbl/d, down from more than 550,000 bbl/d during the 1970's. In November 1992, Halliburton Services was awarded an eight-year contract to provide EOR services and boost production. Despite Halliburton's efforts, wellhead problems persisted, and experts now predict that under current conditions and current levels of investment, the field will produce only around 380,000 bbl/d through the end of the decade. In order to raise its production capacity back to the 450,000-500,000 bbl/d range, Hassi Messaoud requires a larger scale EOR system plus two more years of additional work. To accomplish this, Halliburton may look to take on a foreign company as a partner. Other oil fields available for further investment include: Tin Fouye/Tabankort, Edjeleh, Mereksen, Guellala, Ben Kahla, Oued Noumer, El Agreb, El Gassi, El Agreb Ouest, Tiguentourine, Zarzaitine, Stah, Rhourde Nouss, and Rhourde Chegga. Without much needed investment, production at these fields will continue to decline.

In contrast, Algeria's second largest oil field, Rhourde El Baguel, has already received the foreign investment needed to boost its production capacity. Rhourde El Baguel contains about three billion barrels of 42.6^o API oil, of which less than 450 million barrels has been produced since 1963. In February 1996, Atlantic Richfield (Arco) signed a $1.3 billion production sharing agreement (PSA) with Sonatrach to increase production at the field. Under this 25-year agreement, Arco will invest in an EOR system and drill 38 new wells. Arco expects to raise the field's output from its current rate of 27,000 bbl/d to a peak of 125,000 bbl/d by 2000-2002. Sonatrach holds 51% of the joint venture and Arco the remaining 49%.

Refining and Petrochemicals
Algeria has five refineries with combined capacity of 465,000 bbl/d. The country's refining capacity was augmented significantly in 1981, when the 310,000-bbl/d Skikda refinery started operations. In 1993, a 30,000-bbl/d catalytic reformer was added to the Skikda refinery. This improved the plant's production profile and increased light distillate output. Algeria's refineries are capable of meeting almost all of the country's domestic requirements. However, since they lack substantial depth in secondary processes, limited amounts of gasoline and kerosene still are imported. The 27,000-bbl/d Hassi Messaoud plant supplies products to southern Algeria, as does the smaller 7,000-bbl/d In Amenas plant. The el-Djazair refinery processes crude shipped north from Hassi Messaoud. While naphtha production from the refinery is exported, mainly to the United States, the balance of el-Djazair product output is consumed in central Algeria. Finally, the coastal 60,000-bbl/d Arzew refinery, which uses Algerian Saharan blend as feedstock, produces both heavier and light products for domestic consumption and export. In the recent past, Algeria has exported between 400,000-450,000 bbl/d of refined products. In 1996, the United States imported an average of 248,000 bbl/d of Algerian products, a large part of which comprised naphtha for petrochemical feedstock use.

Although Algeria has an extensive petrochemical and fertilizer industry, low capacity utilization rates at the various facilities mean continued reliance on imports from abroad. The majority of Algeria's petrochemical plants are located at Annaba (a 550,000 ton per year -t/y - ammonium phosphate fertilizer plant and ammonium nitrate and nitric acid complex), Arzew (a 365,000 t/y ammonia, 146,000 t/y urea, and 182,500 t/y ammonium nitrate complex), and Skikda (a 130,000 t/y high-density polyethylene unit, 120,000-t/y ethylene cracker, and a substantial aromatics complex). Sonatrach presently is undertaking a number of petrochemical and fertilizer expansion projects, including a new methyl tertiary butyl ether (MTBE) complex, a helium and nitrogen facility, and a polyester resin complex.

Terminals
Algeria has seven coastal terminals for crude oil, refined product, NGL, and liquefied natural gas (LNG) exports. These are located at Algiers, Annaba, Arzew, Bejaia, Oran, Skikda, and La Skhirra. The two ports at Arzew handle about 40 percent of Algeria's total hydrocarbon exports. LNG is shipped from Arzew and Skikda. Additionally, Arzew handles all of Algeria's NGL exports. Algeria uses the Tunisian port of La Skhirra exclusively for crude exports.

NATURAL GAS
Algeria contains 130 trillion cubic feet (Tcf) of proven natural gas reserves, ranking it in the top ten worldwide. Sonatrach estimates that Algeria's ultimate gas potential is around 204 Tcf, of which 135.5 Tcf is recoverable. Algeria's largest gas field is the super-giant Hassi R'Mel, which initially held probable and possible reserves of between 95-105 Tcf and proven reserves of about 85 Tcf. Net dry gas production from Hassi R'Mel is around 1.35 Bcf/d, or about a quarter of Algeria's total production.

The remainder of Algeria's gas reserves are located in associated and non-associated fields in the southeast, and in non-associated reservoirs in the In Salah region in southern Algeria. The Rhourde Nouss region holds 13 Tcf of known reserves in the Rhourde Nouss, Rhourde Nouss Sud-Est, Rhourde Adra, Rhourde Chouff, and Rhourde Hamra fields. Smaller gas reserves are located in the In Salah region (5-10 Tcf) as well as at the Tin Fouye Tabankort (TFT)(5.1 Tcf), Alrar (4.7 Tcf), Ouan Dimeta (1.8 Tcf), and Oued Noumer fields.

Algeria hopes to boost its natural gas exports from 3.8 Bcf/d at present to 5.8 Bcf/d by 2000. Through 2000, Italy and France are expected to remain the largest purchasers of Algerian gas, with 47 percent and 20 percent shares respectively. Through 2020, the European Commission has forecast that Algerian exports will not exceed a 25 percent share of the European gas market. In contrast, Europe's two other major gas suppliers, Norway and Russia, each are expected to maintain or expand their 25 percent market shares. In addition, Algeria has had a long standing policy to develop its gas reserves as a source of domestic energy and as a raw material for the petrochemical industry. As of mid-1997, approximately 95% of the country's electricity is generated by gas.

Development of the In Salah region is one of the lynchpins in Algeria's plan to increase its gas exports. In December 1995, British Petroleum (BP) and Sonatrach signed a $3.5-billion deal to develop seven of the twelve existing fields in the In Salah region, including the Garat al-Bafinat, Teguentour, Krechta, Reg, In Salah, Hassi Moumeme, and Gour Mahmoud fields. These fields contain estimated dry gas reserves of 5 Tcf, with a potential for 10 Tcf total. In addition, the joint venture, called In Salah Gas, will appraise existing wells and explore for new gas reserves in the In Salah region. In Salah Gas is the first major gas joint venture between Sonatrach and a foreign partner. Production from the region is expected to come online in 2002, after the drilling of up to 200 production wells and construction of a $1-billion, 48-inch pipeline link to Hassi R'Mel. Under the profit-sharing agreement, project investment is split 65% BP, 35% Sonatrach with BP funding the estimated $100 million cost of the seismic program and a nine well drilling program that includes five appraisal and four exploration wells.

In May 1997, In Salah Gas sealed its first gas sales deal with Italian electricity generator Enel. The deal enables In Salah Gas to take over an existing contract to supply Enel with 141 Bcf/y of gas. The original contract between Sonatrach and Enel was signed in late 1996. Sonatrach will continue supplying the Italian power giant with gas supplies until In Salah is ready to start feeding the contract in 2002. At current prices, the 20-year contract is worth an estimated $300 million per year. The deal represents In Salah's first step towards achieving its sales goal of 318-388 Bcf/y by early next century. Drilling for the nine appraisal and exploration wells is scheduled to begin in 1999.

In a deal announced in October 1997, Greece will begin receiving Algerian gas in 1998. Under the accord - originally signed in 1988 - Greece will purchase 21 Bcf of gas per year until 2015. The contract is valued at $1.5 billion. In another deal, Sonatrach is reportedly about to award a construction contract for four gas compressor stations to US-based Bechtel. The compressor stations are to be built along the 621-mile GR2 gas line between Rhourde Nouss and Hassi R'Mel. Although the award has not been announced officially, the European Investment Bank apparently has approved a $332 million loan for the project.

Liquefied Natural Gas (LNG) Exports
With the start-up of the Arzew GL4Z plant in 1964, Algeria became the world's first LNG producer. Algeria currently has four LNG plants, with a design capacity of 2.95 Bcf/d. In 1994, Algeria accounted for about one-fifth of world LNG exports. Despite its large LNG production potential, Algeria's LNG plants historically have operated well below capacity. Consequently, Sonatrach began a $2.4 billion program in 1989 to debottleneck and upgrade three of its four LNG plants in an effort to displace Indonesia from its status as the world's largest LNG exporter. This refurbishment program focused on the 1-Bcf/d Arzew GL1Z, 1-Bcf/d Arzew GL2Z, and 770-Mmcf/d Skikda GL1K plants. Also, Algeria's original 260-Mmcf/d Arzew GL4Z, or "Camel," plant was slated for decommissioning by 1997. However, Sonatrach is spending $150 million in a refurbishment program to keep the plant operational for reserve purposes until at least 2003. Prior to refurbishment, operational capacity of the Camel plant was 163 Mmcf/d, or 62 percent. Sonatrach's total upgrading program is anticipated to boost the country's LNG capacity to 3.29 Bcf/d.

As of 1996, Algeria had contractual commitments to sell 2.5 Bcf/d of LNG to France (0.98), Belgium (0.44), Spain (0.37), Italy (0.19), United States (0.29), Turkey (0.19), and Greece (0.06). In 1995 and 1996, Algerian LNG exports were reduced due to upgrading activities. Gaz de France currently receives about one-third of Algeria's LNG exports. Algerian exports to the United States fell from 0.22 Bcf/d in 1993, to 0.14 Bcf/d in 1994, and 0.05 Bcf/d in 1995.

Natural Gas Pipeline Exports
The 667-mile TransMediterranean (Transmed) pipeline, Algeria's first gas line, links the Hassi R'Mel gas field to Mazzara del Vallo in Sicily. The Transmed line comprises segments through Algeria (342 miles), Tunisia (230 miles), the Mediterranean (96 miles underwater) to Sicily and then on to Slovenia. The Hassi R'Mel-Oued Saf-Saf link to the Tunisia border originally consisted of two parallel 48-inch lines. With the signing of a revised gas supply contract, however, the three international links have been augmented with several 48-inch and 24-inch lines as well as at least four compressor stations. Until recently, the Algerian segment of the Transmed pipeline had a slightly higher capacity than the Tunisia-Italy link, with a throughput potential of 1.5 Bcf/d as compared to 1.15 Bcf/d. In mid-1995, Transmed's total capacity across all segments was raised uniformly to 2.3 Bcf/d. There are plans to add two compressor stations in Algeria and two in Tunisia by 2000. The new compression stations will enable the pipeline to carry up to 1 Tcf/y, its final capacity, to Italy and Slovenia. Most of the gas from this line is taken by Italy's main gas utility Snam, which is under contract to buy 680 Bcf/y from 1997 until 2018. Tunisia purchases about 39 Bcf/y, with 14 Bcf/y committed until 2020 under a deal signed in March 1997, and the rest bought on spot basis and in lieu of transit fees. Slovenia's Sozd Petrol is committed to 21 Bcf/y until 2007 under a contract signed in January 1990.

The $2.3-billion Gazoduc Maghreb-Europe (GME) pipeline began its first gas deliveries in November 1996. The pipeline is made up of five sections: 324 miles from Hassi R'Mel to the Moroccan border, 326 miles from Morocco to the Strait of Gibraltar, 28 miles across the Strait of Gibraltar at a depth of 1,312 feet, 168 miles from the Spanish coast to Cordoba, Spain where it ties into the Spanish transmission network, and 168 miles to Portugal. The section to Portugal came on stream in early March 1997. The Algerian section of the 1,013-mile long pipeline was built by U.S.-based Bechtel and consists of a 48-inch line with a design capacity of 695 Mmcf/d. At the Strait of Gibraltar, the line doubles into two 24-inch segments. By the end of 1998, Algeria is planning to add a compressor station on its link to boost GME's capacity to 935 Mmcf/d. This is needed to accommodate the start of contracted gas shipments to Portugal. In November and December 1996, Spain's Enagas began taking gas from the pipeline, and under a contract signed in June 1992, Enagas will buy 212 Bcf/y and occasionally take additional quantities until 2020. Under a deal signed in April 1994, Transgas of Portugal will purchase 88 Bcf/y of gas also until 2020. In addition, Morocco will begin buying gas from the GME system in 1998. Through a further doubling of capacity with added compression stations, the GME eventually may supply gas to France and Germany.

COUNTRY OVERVIEW
President: Liamine Zeroual
Prime Minister: Ahmed Ouyahia
Independence: July 5, 1962 (from France)
Population (1997E): 30.2 million
Location/Size: North Africa/919,595 sq. miles, more than one- quarter the size of the United States
Major Cities: Algiers (capital), Constantine, Annaba, Arzew, Skikda, Oran, Ghardaia, Bechar, Ouargla, Touggourt
Languages: Arabic (official), French, Berber dialects
Ethnic Groups: Arab-Berber 99%, European less than 1%
Religions: Sunni Islam (state religion) 99%, Christianity and Judaism 1%
Defense (1997): Army (107,000), Navy (6,700), Air Force (10,000), Paramilitary Forces (41,200)

ECONOMIC OVERVIEW
Currency: Algerian Dinar (AD)
Market Exchange Rate (8/97E): US$1 = AD62.44
Gross Domestic Product (GDP)(constant 1990 dollars-1997E): $73.06 billion
Real GDP Growth Rate (1997E): 5.5%
Inflation Rate (consumer prices - 1997E): 23.5%
Unemployment Rate (1997E): 30%
Current Account Balance (1997E): $0.5 billion
Major Trading Partners: Italy, France, United States, Germany, Spain
Merchandise Exports (1997E): $14.77 billion
Merchandise Imports (1997E): $10.67 billion
Major Export Products: Petroleum and natural gas
Major Import Products: Industrial equipment, intermediate goods, food, consumer goods
Total Hydrocarbon Export Revenues/Total Export Revenues (1996E): 95%
Total Reserves (non-gold) (1996E): $2.1 billion
Total External Debt (1/96E): $31.6 billion

ENERGY OVERVIEW
Energy Minister: Youcef Yousfi
Hydrocarbon Production (% of total)(1995): Natural gas (65%), crude oil and condensate (32%), natural gas plant liquids (3%)
Proven Oil Reserves (1/1/97): 9.2 billion barrels
Oil Production (1997 1st Half E): 1.42 million barrels per day (bbl/d), of which 842,000 bbl/d is crude oil, 430,000 bbl/d is lease condensate, and 145,000 bbl/d is natural gas plant liquids
Oil Production Capacity (1997E): 1.45 million bbl/d, of which 850,000 bbl/d is crude oil
OPEC Crude Oil Production Quota (1997): 750,000 bbl/d; On January 1, 1998 the quota will increase to 908,500 bbl/d
Oil Consumption (1996E): 235,000 bbl/d
Crude Oil Refining Capacity (1/1/97): 465,000 bbl/d
Net Oil Exports (1995E): 1.1 million bbl/d
Oil Exports to the United States (1996): Crude (8,000 bbl/d), refined products (56,000 bbl/d)
Natural Gas Reserves (1/1/97): 130 trillion cubic feet (Tcf)
Natural Gas Production (1996E): 2.2 Tcf
Natural Gas Consumption (1996E): 0.8 Tcf
Natural Gas Exports (1996E): 1.4 Tcf (world's second largest)
Liquefied Natural Gas (LNG) Customers (1996E): France (38%), Belgium, Spain, United States, Italy, Turkey, Greece
Liquefied Natural Gas (LNG) Exports to the United States (1995): 17.9 billion cubic feet
Natural Gas Pipeline Customers (1996E): Italy (69%), Spain, Portugal, Tunisia, Morocco, Slovenia
Natural Gas Export Capacity (1996E): 1.6 Tcf (0.85 Tcf via pipelines and 0.75 Tcf through LNG tankers)
Recoverable Coal Reserves (12/31/93): 47 million short tons
Electric Generation Capacity (1/1/96): 6.0 gigawatts
Electricity Generation (1996E): 18.4 billion kilowatthours

ENVIRONMENT OVERVIEW
Total Energy Consumption (1995E): 1.3 quadrillion Btu
Energy Consumption per Capita (1995E): 44.1 million Btu (vs. 345.9 million Btu in U.S.)
Energy Consumption per $1987 of GDP (1995E): 18.1 thousand Btu (vs. 16.7 in U.S.)
Energy-related Carbon Emissions (1995E): 23.2 million metric tons (0.4% of world carbon emissions)
Carbon Emissions per Capita (1995E): 0.81 metric tons (vs. 5.4 tons in U.S.)
Carbon Emissions per $1987 of GDP (1995E): 0.33 metric tons (vs. 0.26 in U.S.)
Major Environmental Issues: Land degradation, water scarcity, and widespread pollution

OIL AND GAS INDUSTRIES
Organization: Enterprise Nationale pour la Recherche, la Production, le Transport, la Transformation et la Commercialisation des Hydrocarbons (Sonatrach) - State­owned company for exploration, transport and marketing of petroleum, natural gas and related products; Enterprise Nationale de Raddinage des Produits Petroliers (Naftec) - Operates and manages all refineries; Enterprise Nationale de Commercialisation et de Distribution des Produits Petroliers (Naftel) - Domestic product distribution.
Terminals: Algiers, Annaba, Arzew (LNG)(condensate), Bejaia, Oran, Skikda (LNG), La Skhirra (Tunisia)(crude)
Major Oil (o) and Condensate (c) Fields (production-bbl/d) (1995): Hassi R'Mel (273,000)(c)/(18,000)(o), Hassi Messaoud South (238,500)(o), Hassi Messaoud North (153,000)(o), Tin Fouye Tabankort Ordo (68,400)(o), Rhourde Nouss (43,300)(c), Zarzaitine (32,500)(o), Haoud Berkaoui/Ben Kahla (33,300)(o), Alrar (29,900)(c), Rhourde el-Baguel (27,000)(o), el-Gassi el-Agreb (30,800)(o)
Major Oil (o) and Condensate (c) Pipelines (capacity-bbl/d) (1996): Haoud El Hamra-Arzew (434,000)(o), Haoud El Hamra-Skikda (363,000)(o), Ohanet-Haoud El Hamra (363,000)(o), Mesdar-Haoud El Hamra (242,000)(o), Hassi R'Mel-Arzew (424,000)(c), Haoud El Hamra-Bejaia (343,000)(c)
Natural Gas Export Pipelines: TransMed (Hassi R'Mel- Tunisia-Sicily-Italy (Minerbo)), Gazoduc Maghreb-Europe (GME)(Hassi R'Mel-Morocco-Spain (Cordoba)-Portugal (Leiria)
Crude Oil Refineries (capacity-bbl/d)(1996E): Skikda (310,000), Arzew (60,000), el-Djazair (58,000), Hassi Messaoud (30,000), In Amenas (7,000)
LNG Facilities (Design/Refurbished Capacity - million cubic feet per year) (1994): Arzew GL4Z (76.7), Arzew GL1Z (380), Arzew GL2Z (341.3), Skikda GL1K (265)
Selected Foreign Oil Company Involvement: Agip, Anadarko, Arco, British Petroleum, BHP, Cepsa, Daewoo, Exxon, Lasmo, Louisiana, Maersk, Mobil, Neste Oy, Oryx, PetroCanada, Phillips, Ranger, Repsol, Sasol, Samsung, Sun Oil, Talisman, Total, Wintershall, YPF

For more information from EIA on Algeriat, please see:
EIA - Country Information on Algeria

Links to other sites:
CIA 1997 World Factbook - Algeria
U.S. State Department Consular Information Sheet on Algeria

The following links are provided solely as a service to our customers, and therefore should not be construed as advocating or reflecting any position of the Energy Information Administration (EIA) or the United States Government. In addition, EIA does not guarantee the content or accuracy of any information presented in linked sites.

The Center for Middle Eastern Studies - Algeria
Information on Algeria from Arabia On-Line
Information on Algeria from ArabNet

If you liked this Country Analysis Brief or any of our many other Country Analysis Briefs, you can be automatically notified via e-mail of updates. Simply click here, put in your e-mail address, and check the box labeled "Country Analysis Briefs" on the list of products. You will then be notified within an hour of any updates to our Country Analysis Briefs.

Return to Country Analysis Briefs home page

File last modified: December 5, 1997

Contact:

Erik Kreil
ekreil@eia.doe.gov
Phone: (202)586-6573
Fax: (202)586-9753

URL: http://www.eia.doe.gov/emeu/cabs/algeria.htm