Russia, Algeria agree to boost cooperation in oil, gas sectors

Jul 31, 2015 12:00 AM

Russia and Algeria Friday agreed to expand cooperation in the energy sector.
The move comes as contacts between Russia and other major oil and gas producers have intensified recently against the backdrop of falling oil prices and general volatility in the market.

At present, there is a limited number of joint oil and gas projects between companies from the two countries, and the two have agreed to intensify efforts to expand this cooperation, Russian energy minister Alexander Novak said after a meeting of the Russia-Algeria intergovernmental commission in Moscow.

Russian companies, including oil and gas producers Gazprom Neft, Lukoil, Russneft, and Bashneft, are interested in entering the Algerian market, he said, adding that Russia and Algeria "have great potential to expand collaboration in various sectors of the economy, including oil and gas, agriculture and transportation."

Both Algeria and Russia are key suppliers of gas to Europe and members of the Gas Exporting Countries Forum, a group of key gas producers, including Qatar and Iran, which collectively hold more than 70% of the world's gas reserves.

Algeria is also an OPEC member and aiming to boost its oil and gas production.

"That's why cooperation between Russian companies and Algeria's Sonatrach has been developing historically," Novak said, noting that Gazprom and Sonatrach reported an oil and gas discovery at the El Assel block in Algeria in late 2014.

Russian Rosneft and Stroitransgaz are also continuing to work with Sonatrach on developing oil and gas reserves within the Block 245 South, which includes two oil and one gas field, Novak said.

No talks on coordinated action upstream
Novak said the parties did not touch on the issue of potential coordination on oil or gas markets to support prices during the meeting of the intergovernmental commission, which is co-chaired by Algerian Finance Minister Abderrahmane Benkhalfa.

Russia and Algeria intensified contacts at the end of last year, when oil prices were falling, with former Algeria's oil minister Youcef Yousfi repeatedly calling for OPEC and non-OPEC countries to meet in a bid to agree coordinated action to boost oil prices.

Most recently, Algeria's new oil minister Salah Khebri earlier this month said his country would be prepared to make such a call if necessary given the sustained low oil prices.

OPEC General Secretary Abdalla el-Badri, though, said Thursday no OPEC member had asked for an extraordinary ministerial meeting.

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