Algeria Sticks to Shale-Gas Development, Unfazed by Protests

By African Bulletin on February 9, 2015

Algeria’s state energy company Sonatrach will press ahead with plans to develop shale gas reserves and refuses to yield to protests by local communities and environmental groups, its interim chief executive officer said.

Algeria, Africa’s largest natural gas producer, will need 55 billion cubic meters of gas in 2025 compared with 35 billion cubic meters this year, said Sonatrach Interim CEO Said Sahnoun, according to state-run Algeria Press Service. Residents concerned that shale-gas production may cause pollution and harm their health have protested and fought with police, Algeria Watch, a human-rights monitoring group, said in comments posted on its website.

“Requesting to stop shale-gas drilling means to stop petroleum activity in Algeria,” Sahnoun said Sunday, referring to demonstrations at In Salah, a southern region where the company is drilling two experimental wells. “Sonatrach will never carry out activities that can harm the population’s health or the environment.”

Algeria’s gas exports have declined since their 2005 peak of 65 billion cubic meters, with local consumption rising and production falling. Projects were delayed by a 2010 corruption probe at Sonatrach and a 2013 attack on the In Amenas gas field operated by BP Plc and Statoil ASA. The North African nation supplied 47 billion cubic meters of gas to overseas buyers in 2013, Sonatrach said in December.

Nuclear Plans

In Salah residents have held protests almost every other day for more than a month against plans to develop shale reserves in their region, according to Algeria Watch. Police have clashed with demonstrators there, and people in cities including Ouargla and Oran, the country’s second-largest, have held sit-in protests, according to the website.

The country has estimated recoverable shale gas reserves of 741 trillion cubic feet (21 trillion cubic meters), Abdelhamid Zerguine, Sonatrach’s former CEO, said in November 2013.

“Developing unconventional gas resources is a necessity for Algeria in the long run, from 2020 onward, if it wants to remain an important international gas supplier and meet at the same time its growing electricity consumption,” Francis Perrin, the director of Paris-based energy consultants Stratener, said Monday in an e-mail. “It also has a program to develop renewable sources, and nuclear energy is being considered.”

Algeria plans to start operating its first nuclear power plant in 2025 to help meet electricity demand growing at an annual rate of 14 percent, Energy Minister Youcef Yousfi said last year.

The country also plans to offer additional exploration rights this year for oil and gas, as the previous auction, held in September, garnered takers for four out of 31 available acreages, Yousfi said in November. Some of the blocks offered for exploration last year may contain shale reserves, Sonatrach said at the time.

Algeria needs to exploit its shale resources to “maintain stability in the long term,” Riccardo Fabiani, North Africa analyst at Eurasia Group in London, said Feb. 3 in an e-mail. “Without it, Algeria will have to scale down its export commitments and accept a reduction in oil and gas revenues that could undermine regime stability.”

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