Lukoil with Sonatrach in Algerian hydrocarbons

Nov 23, 1996 01:00 AM

Russian Lukoil and Algerian Sonatrach have signed a protocol of intent to tap Algeria's large hydrocarbon reserves. No details have yet been provided on which fields the two sides are likely to develop. Nor have details been revealed about the time period over which the fields will be developed, or the cost involved.Lukoil's strategic partner in the deal is US Arco, which owns an 8% stake. Arco has an agreement with Sonatrach to boost production five-fold in an enhanced oil recovery project at Algeria's 3 bnb Rhourde el Baguel field. Lukoil and Arco have an agreement to spend $3 bn on joint projects in Russia and overseas, with most of the financing to come from Arco. Lukoil is also co-operating with Agip of Italy in both Russia and North Africa.Meanwhile, the Algerian-Belgian Projects Committee met Nov. 19 and Nov. 22 to prepare for the countries' next joint commission, due at the beginning of 1997. During the talks, officials examined the mode of enforcement regarding around 50 co-operation projects, for which Brussels has agreed to contribute $30 million in financing. The meeting follows the visit to Algeria of a Belgian business delegation led by Willy Monfils, president of the Belgian, Luxembourg/Arab countries Chamber of Commerce. Monfils, noted that the current "operation of privatisation in Algeria requires important financial resources, which could be brought by Belgian operators." He announced that the Belgian insurance firm Ducroire would soon revise upwards by $100 mm to $150 mm the amount of guaranteed credits towards Algeria, which so far had reached $800 mm. Algeria, which supplies Belgium with around 40 % of its gas, remains a major economic partner of the country. It is its second most important trading source after Saudi Arabia, at an Arab-African level. Belgium is also the fifth most important European customer of Algeria and its sixth leading supplier. In 1995, Algeria's exports to Belgium were valued at $366 mm, while its imports from Belgium reached $236 mm.

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