Return of foreign workers at Algeria’s In Amenas

Almost a year and a half after the unprecedented attack on In Amenas natural gas plant in Algeria, the facility is seeing a return of foreign oil workers, a good omen for the country’s oil and gas industry.

The In Amenas gas facility was attacked by Islamist terrorists on 16 January 2013. After the attack, which reportedly left 40 workers dead including foreigners, several international firms removed their staff from the country in consideration of the political risks.

The Algerian government’s efforts aimed at reassuring foreign partners that they can continue to operate safely in Algeria is clearly yielding result.

“Twelve expatriate workers are already at the gas facility and more are expected,” Reuters quoted a source at Algerian state energy company Sonatrach to have said on Saturday.

Norway’s Statoil and BP, which operate the facility with Sonatrach, had demanded improved security before returning workers.

In Amenas produced about 11.5 percent of Algeria’s natural gas output before the attack and the North African state has been steadily bringing the plant back to full resumption, which frees up more of the fuel for export to Europe.

Algeria is by far the biggest gas exporter in Africa, exporting 34.8 billion cubic metres in 2012. Algeria is also the seventh largest gas exporter in the world by pipeline, with most going to Italy and Spain, according to KPMG’s 2014 Oil and Gas Africa report.

 The outage of the In Amenas gas plant contributed to a 10 percent drop in Algeria’s hydrocarbons production in the first half of 2013, which combined with a slight drop in the oil price led to a 12 percent fall in hydrocarbons revenue over the period.

 The absence of expatriate staff from Algeria also delayed the implementation of planned work on the In Amenas project and the In Salah gas project, which is also operated by a joint venture between BP, Statoil and Sonatrach. A project to maintain pressure in the In Amenas wells had been planned, along with the development of gas reserves in the south of the In Salah concession. The In Salah project has production capacity of about 9 billion cubic metres a year.

 With foreign workers returning to the In Amenas facility, the country’s chances of attracting more foreign oil companies looks set for a boost.

 Algeria will hold a new energy bidding round later this year when it hopes to attract more foreign oil companies to help bolster its stagnant oil and gas production. After the In Amenas attack, security was a major doubt for investors.

Algeria’s shale gas potential is enormous, with a recent study by the Energy Information Administration (EIA) estimating that Algeria has 707 trillion cubic feet (almost 20 trillion cubic metres) of ‘technically recoverable shale gas resources’. This is more than four times the country’s proven conventional gas reserves. The study also shows that Algeria’s potential shale gas resources are the third highest in the world after China and Argentina, and slightly more than the United States.

FEMI ASU