AL G ERI A CO UNTR Y PRO FI LE

Dhananjay Sharma CORPORATE PLANNING ESSAR OIL LIMITED -----------------OCTOBER 2009

BACKGROUND GEOGRAPHY PEOPLE GOVERNMENT ECONOMY COMMUNICAT ION TRANSPORTATION MILITARY TRANSNAT IONAL I SSUES ALGERIA ENERGY PROFILE- OIL & GAS SOURCE

BACKGROUND
After more than a century of rule by France, Algerians fought through much of the 1950s to achieve independence in 1962. Algeria's primary political party, the National Liberation Front (FLN), has dominated politics ever since. Many Algerians in the subsequent generation were not satisfied, however, and moved to counter the FLN's centrality in Algerian politics. The surprising first round success of the Islamic Salvation Front (FIS) in the December 1991 balloting spurred the Algerian army to intervene and postpone the second round of elections to prevent what the secular elite feared would be an extremist-led government from assuming power. The army began a crackdown on the FIS that spurred FIS supporters to begin attacking government targets. The government later allowed elections featuring pro-government and moderate religiousbased parties, but did not appease the activists who progressively widened their attacks. The fighting escalated into an insurgency, which saw intense fighting between 1992-98 and which resulted in over 100,000 deaths - many attributed to indiscriminate massacres of villagers by extremists. The government gained the upper hand by the late-1990s and FIS's armed wing, the Islamic Salvation Army, disbanded in January 2000. However, small numbers of armed militants persist in confronting government forces and conducting ambushes and occasional attacks on villages. The army placed Abdelaziz BOUTEFLIKA in the presidency in 1999 in a fraudulent election but claimed neutrality in his 2004 landslide reelection victory. Longstanding problems continue to face BOUTEFLIKA in his second term, including large-scale unemployment, a shortage of housing, unreliable electrical and water supplies, government inefficiencies and corruption, and the continuing activities of extremist militants. The Salafist Group for Preaching and Combat (GSPC) in 2006 merged with al-Qaida to form al-Qaida in the Lands of the Islamic Maghreb, which since has launched an ongoing series of kidnappings and bombings - including high-profile, mass-casualty suicide attacks targeted against the Algerian government and Western interests. Algeria must also diversify its petroleum-based economy, which has yielded a large cash reserve but which has not been used to redress Algeria's many social and infrastructure problems.

GEOGRAPHY
Location Geographic coordinates 28 00 N, 3 00 E Map references Africa Area total: 2,381,741 sq km land: 2,381,741 sq km water: 0 sq km slightly less than 3.5 times the size of Texas total: 6,343 km border countries: Libya 982 km, Mali 1,376 km, Mauritania 463 km, Morocco 1,559 km, Niger 956 km, Tunisia 965 km, Western Sahara 42 km 998 km territorial sea: 12 nm exclusive fishing zone: 32-52 nm arid to semiarid; mild, wet winters with hot, dry summers along coast; drier with cold winters and hot summers on high plateau; sirocco is a hot, dust/sand-laden wind Northern Africa, bordering the Mediterranean Sea, between Morocco and Tunisia

Area - comparative Land boundaries

Coastline Maritime claims

Climate

especially common in summer Terrain mostly high plateau and desert; some mountains; narrow, discontinuous coastal plain lowest point: Chott Melrhir -40 m highest point: Tahat 3,003 m petroleum, natural gas, iron ore, phosphates, uranium, lead, zinc arable land: 3.17% permanent crops: 0.28% other: 96.55% (2005) 5,690 sq km (2003) 14.3 cu km (1997) total: 6.07 cu km/yr (22%/13%/65%) per capita: 185 cu m/yr (2000) mountainous areas subject to severe earthquakes; mudslides and floods in rainy season soil erosion from overgrazing and other poor farming practices; desertification; dumping of raw sewage, petroleum refining wastes, and other industrial effluents is leading to the pollution of rivers and coastal waters; Mediterranean Sea, in particular, becoming polluted from oil wastes, soil erosion, and fertilizer runoff; inadequate supplies of potable water

Elevation extremes

Natural resources

Land use

Irrigated land Total renewable water resources Freshwater withdrawal (domestic/industrial/agricultural): Natural hazards

Environment - current issues

Environment - international agreements

party to: Biodiversity, Climate Change, Climate Change-Kyoto Protocol, Desertification, Endangered Species, Environmental Modification, Hazardous Wastes, Law of the Sea, Ozone Layer Protection, Ship Pollution, Wetlands signed, but not ratified: none of the selected agreements second-largest country in Africa (after Sudan)

Geography - note

PEOPLE
Population Age structure 34,178,188 (July 2009 est.) 30 0-14 years: 25.4% (male 4,436,591/female 4,259,729) 15-64 years: 69.5% (male 11,976,965/female 11,777,618) 65 years and over: 5.1% (male 798,576/female 928,709) (2009 est.) total: 26.6 years male: 26.3 years female: 26.8 years (2009 est.) 1.196% (2009 est.) Population growth rate 16.9 births/1,000 population (2009 est.) Birth rate 4.64 deaths/1,000 population (July 2009 est.) Death rate -0.29 migrant(s)/1,000 population (2009 est.) Net migration rate Urbanization urban population: 65% of total population (2008) rate of urbanization: 2.5% annual rate of change (2005-

Median age

10 est.) Sex ratio at birth: 1.05 male(s)/female under 15 years: 1.04 male(s)/female 15-64 years: 1.02 male(s)/female 65 years and over: 0.86 male(s)/female total population: 1.01 male(s)/female (2009 est.) total: 27.73 deaths/1,000 live births country comparison to the world: 80 male: 30.86 deaths/1,000 live births female: 24.45 deaths/1,000 live births (2009 est.) total population: 74.02 years country comparison to the world: 92 male: 72.35 years female: 75.77 years (2009 est.) 1.79 children born/woman (2009 est.) Total fertility rate HIV/AIDS - adult prevalence rate HIV/AIDS - people living with HIV/AIDS HIV/AIDS- Deaths Nationality fewer than 1,000 (2007 est.) noun: Algerian(s) adjective: Algerian Arab-Berber 99%, European less than 1% note: almost all Algerians are Berber in origin, not Arab; the minority who identify themselves as Berber live mostly in the mountainous region of Kabylie east of Algiers; the Berbers are also Muslim but identify with their Berber rather than Arab cultural heritage; Berbers have long agitated, sometimes violently, for autonomy; the government is unlikely to grant autonomy but has offered to begin sponsoring teaching Berber language in schools 0.1%; note - no country specific models provided (2007 est.) 21,000 (2007 est.)

Infant mortality rate

Life expectancy at birth

Ethnic groups

Religions Languages Literacy

Sunni Muslim (state religion) 99%, Christian and Jewish 1% Arabic (official), French, Berber dialects definition: age 15 and over can read and write total population: 69.9% male: 79.6% female: 60.1% (2002 est.) 5.1% of GDP (1999)

Education expenditures

GOVERNMENT
Country name conventional long form: People's Democratic Republic of Algeria conventional short form: Algeria local long form: Al Jumhuriyah al Jaza'iriyah ad Dimuqratiyah ash Sha'biyah local short form: Al Jaza'ir republic Government type Capital name: Algiers geographic coordinates: 36 45 N, 3 03 E time difference: UTC+1 (6 hours ahead of Washington, DC during Standard Time) 48 provinces (wilayat, singular - wilaya); Adrar, Ain Defla, Ain Temouchent, Alger, Annaba, Batna, Bechar, Bejaia, Biskra, Blida, Bordj Bou Arreridj, Bouira, Boumerdes, Chlef, Constantine, Djelfa, El Bayadh, El Oued, El Tarf, Ghardaia, Guelma, Illizi, Jijel, Khenchela, Laghouat, Mascara, Medea, Mila, Mostaganem, M'Sila, Naama, Oran, Ouargla, Oum el Bouaghi, Relizane, Saida, Setif, Sidi Bel Abbes, Skikda, Souk Ahras, Tamanghasset, Tebessa, Tiaret, Tindouf, Tipaza, Tissemsilt, Tizi Ouzou, Tlemcen

Administrative divisions

5 July 1962 (from France) Independence Revolution Day, 1 November (1954) National holiday Constitution 8 September 1963; revised 19 November 1976; effective 22 November 1976; revised 3 November 1988, 23 February 1989, 28 November 1996, 10 April 2002, and 12 November 2008 socialist, based on French and Islamic law; judicial review of legislative acts in ad hoc Constitutional Council composed of various public officials including several Supreme Court justices; has not accepted compulsory ICJ jurisdiction 18 years of age; universal Suffrage Executive branch chief of state: President Abdelaziz BOUTEFLIKA (since 28 April 1999) head of government: Prime Minister Ahmed OUYAHIA (since 23 June 2008) cabinet: Cabinet of Ministers appointed by the president elections: president elected by popular vote for a five-year term; note - a November 2008 constitutional amendment abolished presidential term limits; election last held 9 April 2009 (next to be held in April 2014); prime minister appointed by the president election results: Abdelaziz BOUTEFLIKA reelected president for third term; percent of vote - Abdelaziz BOUTEFLIKA 90.2%, Louisa HANOUNE 4.2%, Moussa TOUATI 2.3%, Djahid YOUNSI 1.4%, Ali Fawzi REBIANE less than 1%, Mohamed SAID less than 1% bicameral Parliament consists of the Council of Nations (Senate) (144 seats; one-third of the members appointed by the president, two-thirds elected by indirect vote to serve sixyear terms; the constitution requires half the council to be renewed every three years) and the National People's Assembly or Al-Majlis Al-Shabi Al-Watani (389 seats; members elected by popular vote to serve five-year terms) elections: National People's Assembly - last held 17 May 2007 (next to be held in 2012); Council of Nations (Senate) - last held 28 December 2006 (next to be held in 2009)

Legal system

Legislative branch

election results: National People's Assembly - percent of vote by party - NA; seats by party - FLN 136, RND 61, MSP 52, PT 26, RCD 19, FNA 13, other 49, independents 33; Council of Nations - percent of vote by party - NA; seats by party - FLN 29, RND 12, MSP 3, RCD 1, independents 3, presidential appointees (unknown affiliation) 24; note - Council seating reflects the number of replaced council members rather than the whole Council Supreme Court Judicial branch Political leaders parties Ahd 54 [Ali Fauzi REBAINE]; Algerian National Front or FNA and [Moussa TOUATI]; National Democratic Rally (Rassemblement National Democratique) or RND [Ahmed OUYAHIA]; National Liberation Front or FLN [Abdelaziz BELKHADEM, secretary general]; National Reform Movement or Islah (formerly MRN) [Ahmed ABDESLAM]; Rally for Culture and Democracy or RCD [Said SADI]; Renaissance Movement or EnNahda Movement [Fatah RABEI]; Socialist Forces Front or FFS [Hocine Ait AHMED]; Society of Peace Movement or MSP [Boudjerra SOLTANI]; Workers Party or PT [Louisa HANOUNE] note: a law banning political parties based on religion was enacted in March 1997

The Algerian Human Rights League or LADDH [Hocine Political pressure ZEHOUANE]; SOS Disparus [Nacera DUTOUR] groups and leaders ABEDA, AfDB, AFESD, AMF, AMU, AU, BIS, FAO, G-15, GInternational 24, G-77, IAEA, IBRD, ICAO, ICC, ICCt (signatory), ICRM, IDA, organization IDB, IFAD, IFC, IFRCS, IHO, ILO, IMF, IMO, IMSO, Interpol, participation IOC, IOM, IPU, ISO, ITSO, ITU, ITUC, LAS, MIGA, MONUC, NAM, OAPEC, OAS (observer), OIC, OPCW, OPEC, OSCE (partner), UN, UNCTAD, UNESCO, UNHCR, UNIDO, UNITAR, UNWTO, UPU, WCO, WFTU, WHO, WIPO, WMO, WTO (observer) chief of mission: Ambassador Abdallah BAALI Diplomatic chancery: 2118 Kalorama Road NW, Washington, DC 20008 representation in the telephone: [1] (202) 265-2800 US FAX: [1] (202) 667-2174 Diplomatic chief of mission: Ambassador David D. PEARCE embassy: 05 Chemin Cheikh Bachir, El-Ibrahimi, El-Biar 16000

representation the US

from Algiers mailing address: B. P. 408, Alger-Gare, 16030 Algiers telephone: [213] 770-08-2000 FAX: [213] 21-60-7355

Flag description

two equal vertical bands of green (hoist side) and white; a red, five-pointed star within a red crescent centered over the twocolor boundary; the colors represent Islam (green), purity and peace (white), and liberty (red); the crescent and star are also Islamic symbols, but the crescent is more closed than those of other Muslim countries because the Algerians believe the long crescent horns bring happiness

ECONOMY
Economy overview The hydrocarbons sector is the backbone of the economy, accounting for roughly 60% of budget revenues, 30% of GDP, and over 95% of export earnings. Algeria has the eighthlargest reserves of natural gas in the world and is the fourth-largest gas exporter; it ranks 15th in oil reserves. Sustained high oil prices in recent years have helped improve Algeria's financial and macroeconomic indicators. Algeria is running substantial trade surpluses and building up record foreign exchange reserves. Algeria has decreased its external debt to less than 5% of GDP after repaying its Paris Club and London Club debt in 2006. Real GDP has risen due to higher oil output and increased government spending. The government's continued efforts to diversify the economy by attracting foreign and domestic investment outside the energy sector, however, has had little success in reducing high unemployment and improving living standards. Structural reform within the economy, such as development of the banking sector and the construction of infrastructure, moves ahead slowly hampered by corruption and bureaucratic resistance.

GDP (purchasing power parity)

$232.9 billion (2008 est.) $225.1 billion (2007 est.) $218.3 billion (2006 est.) note: data are in 2008 US dollars

$159.7 billion (2008 est.)

GDP (official exchange rate) GDP - real growth rate

3.5% (2008 est.) 3.1% (2007 est.) 2.1% (2006 est.) $6,900 (2008 est.) $6,700 (2007 est.) $6,600 (2006 est.) agriculture: 8.3% industry: 62.3% services: 29.4% (2008 est.) 9.464 million (2008 est.) agriculture 14%, industry 13.4%, construction and public works 10%, trade 14.6%, government 32%, other 16% (2003 est.)

GDP - per capita (PPP)

GDP - composition by sector

Labor force

Labor force - by occupation

Unemployment rate

12.5% (2008 est.) 11.8% (2007 est.)

Investment (gross fixed)

26.1% of GDP (2008 est.)

Public debt

9.9% of GDP (2008 est.)

Inflation rate (consumer prices)

4.5% (2008 est.) 3.5% (2007 est.) $60.91 billion (31 December 2008) $55.43 billion (31 December 2007)

Stock of money

Stock of quasi money

$30.36 billion (31 December 2008) $28.59 billion (31 December 2007)

Agriculture products

wheat, barley, oats, grapes, olives, citrus, fruits; sheep, cattle

Industries

petroleum, natural gas, light industries, mining, electrical, petrochemical, food processing

Industrial production growth rate

3.2% (2008 est.) 33.12 billion KWh (2006 est.) 26.91 billion KWh (2006 est.) 300 million kWh (2006 est.) 382 million kWh (2006 est.)

Electricity production

Electricity consumption Electricity exports

Electricity imports

Oil production Oil consumption Oil exports Oil imports Oil - proved reserves Natural gas - proved reserves Natural gas - production Natural gas - Consumption Natural gas - Exports Natural gas - Imports Current account balance

2.173 million bbl/day (2007 est.) 279,800 bbl/day (2006 est.) 1.844 million bbl/day (2005 est.) 13,110 bbl/day (2005 est.) 14.79 billion bbl (1 January 2008 est.) 4.502 trillion cu m (1 January 2008 est.) 85.7 billion cu m (2007 est.) 26.3 billion cu m (2007 est.) 59.4 billion cu m (2007 est.) 0 cu m (2007 est.) $34.99 billion (2008 est.) $30.6 billion (2007 est.) $78.23 billion (2008 est.) $60.6 billion (2007 est.) petroleum, natural gas, and petroleum products 97%

Exports

Exports commodities

Exports partners

US 23.9%, Italy 14.9%, Spain 11.1%, Canada 9.6%, France 8.6%, Netherlands 4.5% (2008)

Imports

$39.16 billion (2008 est.) $26.4 billion (2007 est.) capital goods, foodstuffs, consumer goods

Imports commodities

Imports partners

France 19.8%, Italy 10.9%, China 9%, Spain 7.6%, Germany 5.4% (2008)

Reserves of foreign exchange and gold

$143.5 billion (31 December 2008 est.) $110.6 billion (31 December 2007 est.)

Debt external

$2.7 billion (31 December 2008 est.) $3.957 billion (31 December 2007 est.) $13.76 billion (31 December 2008 est.) $11.91 billion (31 December 2007 est.) $1.162 billion (31 December 2008 est.) $962 million (31 December 2007 est.) Algerian dinars (DZD) per US dollar 63.25 (2008 est.), 69.9 (2007), 72.647 (2006), 73.276 (2005), 72.061 (2004)

Stock of direct foreign investment - at home Stock of direct foreign investment - at abroad

Exchange rates

COMMUNICAT ION
Telephones - main lines in use Telephones - mobile cellular Telephone system

3.314 million (2008) 27.563 million (2007) general assessment: a weak network of fixed-main lines, which remains low at less than 10 telephones per 100 persons, is partially offset by the rapid increase in mobile cellular subscribership; in 2007, combined fixed-line and mobile telephone density surpassed 90 telephones per 100 persons domestic: privatization of Algeria's telecommunications sector began in 2000; three mobile cellular licenses have been issued and, in 2005, a consortium led by Egypt's Orascom Telecom won a 15-year license to build and operate a fixed-line network in Algeria; the license will allow Orascom to develop high-speed data and other specialized services and contribute to meeting the large unfulfilled demand for basic residential telephony; Internet broadband services began in 2003 with approximately 200,000 subscribers in 2006 international: country code - 213; landing point for the SEA-ME-WE-4 fiber-optic submarine cable system that provides links to Europe, the Middle East, and Asia; microwave radio relay to Italy, France, Spain, Morocco, and Tunisia; coaxial cable to Morocco and Tunisia; participant in Medarabtel; satellite earth stations - 51 (Intelsat, Intersputnik, and Arabsat) (2007)

Radio broadcast stations Television broadcast stations

AM 25, FM 1, shortwave 8 (1999) 46 (plus 216 repeaters) (1995)

)

Internet country code Internet hosts

.dz 477 (2008)

Internet users

3.5 million (2007)

TRANSPORTATION
Airports Airports with paved runways 143 (2009) total: 57 over 3,047 m: 11 2,438 to 3,047 m: 29 1,524 to 2,437 m: 11 914 to 1,523 m: 5 under 914 m: 1 (2009) total: 86 2,438 to 3,047 m: 3 1,524 to 2,437 m: 19 914 to 1,523 m: 41 under 914 m: 23 (2009) 2 (2009) condensate 1,937 km; gas 14,648 km; liquid petroleum gas 2,933 km; oil 7,579 km (2008)

Airports with unpaved runways

Heliports Pipelines

Railways

total: 3,973 km country comparison to the world: 44 standard gauge: 2,888 km 1.435-m gauge (283 km electrified) narrow gauge: 1,085 km 1.055-m gauge (2008) total: 108,302 km country comparison to the world: 39 paved: 76,028 km (includes 645 km of expressways) unpaved: 32,274 km (2004) total: 33 country comparison to the world: 83 by type: bulk carrier 6, cargo 8, chemical tanker 1, liquefied gas 9, passenger/cargo 3, petroleum tanker 4, roll on/roll off 2 foreign-owned: 18 (Jordan 7, UK 11) (2008) Algiers, Annaba, Arzew, Bejaia, Djendjene, Jijel, Mostaganem, Oran, Skikda

Roadways

Merchant marine

Ports and terminals

MILITARY
Military branches

People's National Army (Armee Nationale Populaire, ANP), Land Forces (Forces Terrestres, FT), Navy of the Republic of Algeria (Marine de la Republique Algerienne, MRA), Air Force (Al-Quwwat al-Jawwiya al-Jaza'eriya, QJJ), Territorial Air Defense Force (2009)

Military service age and obligation

19-30 years of age for compulsory military service; conscript service obligation - 18 months (6 months basic training, 12 months civil projects) (2006)

Manpower available for military service

males age 16-49: 9,736,757 females age 16-49: 9,590,978 (2008 est.)

Manpower fit for military service

males age 16-49: 8,317,473 females age 16-49: 8,367,005 (2009 est.)

Manpower reaching militarily significant male: 375,852 age annually female: 362,158 (2009 est.)

Military expenditures

3.3% of GDP (2006)

TRANSNAT IONAL I SSUES

Disputes international Algeria, and many other states, rejects Moroccan administration of Western Sahara; the Polisario Front, exiled in Algeria, represents the Sahrawi Arab Democratic Republic; Algeria's border with Morocco remains an irritant to bilateral relations, each nation accusing the other of harboring militants and arms smuggling; Algeria remains concerned about armed bandits operating throughout the Sahel who sometimes destabilize southern Algerian towns; dormant disputes include Libyan claims of about 32,000 sq km still reflected on its maps of southeastern Algeria and the FLN's

assertions of a claim to Chirac Pastures in southeastern Morocco refugees (country of origin): 90,000 (Western Refugees and internally displaced Saharan Sahrawi, mostly living in Algerianpersons: sponsored camps in the southwestern Algerian town of Tindouf) IDPs: undetermined (civil war during 1990s) (2007) Trafficking in persons: current situation: Algeria is a transit country for men and women trafficked from sub-Saharan Africa to Europe for the purposes of commercial sexual exploitation and involuntary servitude; Algerian children are trafficked internally for the purpose of domestic servitude or street vending tier rating: Tier 3 - Algeria did not report any serious law enforcement actions to punish traffickers who force women into commercial sexual exploitation or men into involuntary servitude in 2007; the government again reported no investigations of trafficking of children for domestic servitude or improvements in protection services available to victims of trafficking; Algeria still lacks victim protection services, and its failure to distinguish between trafficking and illegal migration may result in the punishment of victims of trafficking (2008)

ALGERIA ENERGY PROFILE-OIL

AND

GAS

Algerias hydrocarbon sector accounts for 97 percent of export revenues.

Energy Overview
Proven Oil Reserves (January 1, 2009E) Oil Production (2008E) Oil Consumption (2008E) Crude Oil Distillation Capacity (2009E) Proven Natural Gas Reserves (January 1, 2009E) Natural Gas Production (2007E) Natural Gas Consumption (2007E) Electricity Installed Capacity (2007E) Electricity Production (2007E) Electricity Consumption (2007E) Total Energy Consumption (2007E) Total Per Capita Energy Consumption (2006E) Energy Intensity (2007E) 12.2 billion barrels 2,229 thousand barrels per day 299 thousand barrels per day 450 thousand barrels per day 159 trillion cubic feet 3.03 trillion cubic feet 0.93 trillion cubic feet 6.5 gigawatts 33.1 billion kilowatthours 26.9 billion kilowatthours 1.5 quadrillion Btu* 47.1 million Btu 6,493 Btu per 2000$***

Environmental Overview
Energy-Related Carbon Dioxide Emissions (2007E) Per-Capita, EnergyRelated Carbon Dioxide Emissions (2006E) Carbon Dioxide Intensity (2006E) 93.2 million metric tons 2.8 metric tons 0.4 metric tons per 2000$***

Oil and Gas Industry

Organization Sonatrach State-owned company for exploration, transport and marketing of petroleum, natural gas and related products; Naftec Operates and manages all refineries; Naftel Domestic product distribution; Cogiz Produces natural gas by-products. Arzew (Algerias largest crude oil export port), Skikda, Algiers, Annaba, Oran, Bejaia, plus the Tunisian facility of La Skhirra. Agip, Anadarko, BHP Billiton, BP, Cepsa, Eni, Gaz de France, Gulf Keystone, Maersk, Petronas, Repsol, Rosneft, Statoil, Talisman, Total. Hassi Messaoud, Hassi Berkine, Ourhoud, Bir Hebaa, Gassi El Agreb/Zotti,

Major Oil/Gas Ports Foreign Company Involvement Major Oil Fields

Major Natural Gas Fields Major Crude Oil Export Pipelines Major Refineries (capacity, bbl/d)

Menzel Ledjmet Hassi RMel, Rhourde Nouss, Rourde Nouss Sud-Est, Rhourde Adra, Rhourde Chouff, Rhourde Hamra fields. 498-mile and 511-mile parallel lines Haoud el Hamra-Arzew; 415-mile Haoud el Hamra-Bejaia; 482-mile In Amenas-La Skhirra, Tunisia; 400-mile Haoud el Hamra- Skikda Naftec-Skikda (300,000), Naftec-Algiers (60,000), Naftec-Arzew (60,000), Naftec-Hassi Messaoud (30,000)

* The total energy consumption statistic includes petroleum, dry natural gas, coal, net hydro, nuclear, geothermal, solar, wind, wood and waste electric power. **GDP figures from Global Insight estimates based on purchasing power parity (PPP) exchange rate

Background
Algeria is an important exporter of oil and natural gas and is a member of the Organization of the Petroleum Exporting Countries (OPEC). In 2008, Algeria produced 1.42 million bbl/d of crude oil. Algeria was the fourth largest crude oil producer in Africa after Nigeria (1.94), Angola (1.89), and Libya (1.71) and the largest total oil liquids producer on the continent. As a member of OPEC, Algeria's crude oil production can be constrained by the groups crude production allocations, but Algeria also produced 450,000 bbl/d of condensate and 357,000 bbl/d of natural gas liquids, which are exempt from OPEC quotas, bringing total oil liquids production for the year up to a total of 2.23 million bbl/d. Domestic oil consumption accounted for about 13 percent of total production. Algeria was the sixth largest natural gas producer in the world in 2007 after Russia, the United States, Canada, Iran, and Norway. Algeria produced 3.03 trillion cubic feet of natural gas in 2007, of which 70 percent was exported and 30 percent was consumed domestically.

OIL
Algeria is net oil exporting country and a member of the Organization of Petroleum Exporting Countries (OPEC). According to Oil and Gas Journal (OGJ), Algeria contained an estimated 12.2 billion barrels of proven oil reserves as of January 2009, the third largest in Africa (behind Libya and Nigeria). Algerias largest proven reserves are located in the eastern half of the country. Algerias Saharan Blend oil, 45 API and 0.1 percent sulfur content, is among the highest quality in the world. European countries rely on Algerian oil to help meet increasingly stringent European Union regulations on sulfur content of gasoline and diesel fuel.

Production and Development

Algeria produced an average of 1.42 million barrels per day (bbl/d) of crude oil in 2008. Together with 450,000 bbl/d of condensate and 357,000 bbl/d of natural gas liquids, Algeria averaged 2.23 million bbl/d of total oil liquids production during 2008, up from 2.17 million bbl/d in 2007. State-owned Sonatrach dominates oil and natural gas production in Algeria. Algeria has increasingly allowed greater foreign investment in the sectors, and foreign oil producers have entered into numerous partnership agreements with Sonatrach.

Sonatrach operates the largest oil field in Algeria, Hassi Messaoud. Located southeast of Algiers, Hassi Messaoud produced around 400,000 bbl/d of crude in 2008. Sonatrach has recently awarded new contracts to increase production over the next few years by developing new areas of the field and by adding a new LPG treatment plant. Other major fields operated by Sonatrach include: Tin Fouye Tabankort Ordo, Zarzaitine, Haoud Berkaoui/Ben Kahla, and Ait Kheir. Algeria is taking steps toward maintaining its oil production capacity by developing new oilfields to compensate for the decline in older fields. In an interview in Vienna in March 2009, Energy Minister Khelil said that some of the new capacity would replace declines in older fields, and that Algeria's long-term target was to maintain crude oil production capacity at its current level. Foreign oil operators have steadily increased their share of Algeria's oil production. The largest foreign oil producer is Anadarko, with total production capacity of more than 500,000 bbl/d, from its operation at the combined Hassi Berkine South and Ourhound fields in eastern Algeria. As of the fourth quarter of 2008, Anadarko had gross oil production of 422,000 bbl/d from the project. Anadarko is developing seven new oil and natural gas fields in Block 208 of the Berkine Basin; with output projected to reach 150,000 bbl/d of crude oil and condensate. Eni operates (among others) the Rhourde Oulad Djemma (ROD) project in southeastern Algeria, a series of six satellite fields. Eni's equity production at the end of 2008 was 84,000 bbl/d. Additional foreign investors include: BG Group, BP, Cepsa, Conoco-Phillips, Eni, Gazprom, Repsol, Ruhrgaz, Shell, Statoil and Total. In December 2008, Algeria held a licensing round for foreign development of oil and natural gas reserves. This licensing round was the first to be held under the 2006 law that gives Algerian state-owned Sonatrach a mandatory minimum 51% share in every oil and gas exploration contract awarded to foreign companies. Only four foreign firms won oil and gas exploration permits in December, and 11 zones attracted no bids. Algerian Energy and Mines Minister Chakib Khelil blamed the weak global economy for the mixed results of the 2008 licensing round during a signing ceremony for the four winning bidders, ENI, Ruhrgas, Gazprom, and BG Group PLC on January 17, 2009. Many of Algeria's latest discoveries are being made in basins near In Salah in the southwest, where reservoirs appear to be relatively small, and pipelines still lacking.

Exports
Algeria is a large oil exporter. Algeria's domestic oil consumption was 299,000 bbl/d in 2008 and estimated net oil exports (including all liquids) reached 1.93 million bbl/d. EIA estimates that the United States imported 547,000 bbl/d from Algeria, or 4 percent of total U.S. oil imports in 2008. This was 28 percent of Algeria's oil exports during 2008. According to the International Energy Agency (IEA), 34 percent of Algerias 2007 oil exports to the Organization for Economic Cooperation and Development (OECD) countries went to European countries, including the Netherlands (8 percent), France (6 percent), Spain (5 percent), and Germany and the United Kingdom (4 percent each).

Downstream
In 2009, Algeria had total refining capacity of 450,000 bbl/d. Naftec, a subsidiary of Sonatrach, operates Algeria's four refineries. The Skikda refinery (300,000 bbl/d) provides the bulk of Algeria's refined products production. The 30,000-bbl/d Hassi Messaoud refinery supplies products to southern Algeria, While the 60,000-bbl/d Algiers refinery processes crude from Hassi Messaoud for consumption in the capital. The coastal 60,000-bbl/d Arzew refinery produces products for domestic consumption and export.

A new refinery is projected at Tiaret, to be completed in 2013. Sonatrach said in November 2008 that companies interested in building this refinery had been shortlisted and tenders would be issued in July or August of 2009.

Pipelines and Export Terminals

Algeria uses seven coastal terminals to export crude oil, refined products, liquefied petroleum gas (LPG) and natural gas liquids (NGL). These facilities are located at Arzew, Skikda, Algiers, Annaba, Oran, Bejaia, and La Skhirra in Tunisia. Arzew handles about 40 percent of Algeria's total hydrocarbon exports, including all of its NGL, LPG, and oil condensate exports. Algeria's oil pipeline network facilitates the transfer of oil from interior production fields to the export terminals. Sonatrach operates over 2,400 miles of crude oil pipelines in the country. The most important pipelines carry crude oil from the Hassi Messaoud field to export terminals. Sonatrach also operates oil condensate and LPG pipeline networks that link Hassi R'mel and other fields to Arzew. Sonatrach has expanded the Hassi Messaoud-Arzew pipeline, the longest in the country, to include a second, parallel line that more than doubles the capacity of the existing line. Sonatrach announced in 2008 that US$5.5 billion would be spent by 2012 on renovating and extending its domestic oil and gas pipelines. Algeria's major crude oil export pipelines are: the 498-mile Haoud el Hamra to Arzew pipeline, the parrallel 511mile Haoud el Hamra to Arzew pipeline, the 415-mile Haoud el Hamra to Bejaia line, the 482-mile In Amenas to La Skhirra, Tunisia, pipeline, and the 400-mile Haoud el Hamra to Skikda pipeline.

Algeria- Net Oil Export Revenues

Nominal ($B) Country Algeria Angola Ecuador Iran Iraq Kuwait Libya Nigeria Qatar Saudi Arabia UAE Venezuel a OPEC 2008 $69 $68 $10 $82 $60 $80 $57 $70 $38 $288 $89 $59 $971 2009 NA NA NA NA NA NA NA NA NA NA NA NA $559 2010 NA NA NA NA NA NA NA NA NA NA NA NA $675 Jan-Aug 2009 $25 $25 $4 $32 $23 $29 $21 $26 $14 $92 $31 $19 $340 2008 $56 $55 $8 $67 $49 $65 $46 $56 $31 $233 $72 $48 $786 Real (2000$B) 2009 NA NA NA NA NA NA NA NA NA NA NA NA $445 2010 NA NA NA NA NA NA NA NA NA NA NA NA $529 Jan-Aug 2009 $20 $20 $3 $26 $18 $23 $17 $21 $11 $74 $25 $15 $271

Algeria- Per Capita Net Oil Export Revenues

Nominal ($) Country Algeria Angola Ecuador Iran Iraq Kuwait Libya Nigeria Qatar Saudi Arabia UAE Venezuel a OPEC 2008 $2,035 $5,404 $735 $1,253 $2,143 $30,952 $9,228 $505 $41,028 $10,242 $19,304 $2,244 $2,688 2009 NA NA NA NA NA NA NA NA NA NA NA NA $1,516 2010 NA NA NA NA NA NA NA NA NA NA NA NA $1,797 Jan-Aug 2009 $719 $1,940 $264 $483 $795 $10,803 $3,324 $182 $14,922 $3,226 $6,516 $705 $926 2008 $1,647 $4,374 $595 $1,014 $1,735 $25,052 $7,469 $409 $33,202 $8,290 $15,624 $1,816 $2,176 Real (2000$) 2009 NA NA NA NA NA NA NA NA NA NA NA NA $1,207 2010 NA NA NA NA NA NA NA NA NA NA NA NA $1,411 Jan-Aug 2009 $574 $1,548 $211 $385 $634 $8,620 $2,653 $145 $11,908 $2,574 $5,199 $563 $739

Natural Gas
Algeria is a significant producer of natural gas and liquefied natural gas (LNG). According to Oil and Gas Journal (OGJ), Algeria had 159 trillion cubic feet (Tcf) of proven natural gas reserves (the eighth-largest natural gas reserves in the world) as of January 2009. Algeria's largest gas field is Hassi R'Mel, discovered in 1956 and holding proven reserves of about 85 Tcf. Hassi R'Mel accounts for about a quarter of Algeria's total dry natural gas production. The remainder of Algeria's natural gas reserves come from associated (they occur alongside crude oil reserves) and non-associated fields in the south and southeast regions of the country.

The country produced 3.03 Tcf of dry natural gas in 2007, and is the sixth-largest natural gas producer in the world and the second largest among OPEC-member countries after Iran. Algeria consumed 0.93 Tcf of dry natural gas in 2007. The remaining natural gas is exported, much of it going to Europe and some to the United States. The Algerian government has encouraged the domestic use of natural gas, which represented 60 percent of the country's total energy consumption in 2007. State-owned Sonatrach dominates natural gas production and wholesale distribution in Algeria, while state-owned Sonelgaz controls retail distribution. Algeria has increasingly allowed greater foreign investment in the sector, and foreign gas producers, including BHP-Billiton, BP, Eni, Repsol, Statoil and Total, have entered into numerous partnership agreements with Sonatrach. There are also plans to allow foreign participation in the retail natural gas sector.

Domestic Pipelines
Algeria's domestic pipeline system centers on the Hassi R'Mel natural gas field. The largest pipeline systems connect Hassi R'Mel to liquefied natural gas (LNG) export terminals along the Mediterranean Sea. A 315-mile, 4.38-billion-cubic-feet-per-day (Bcf/d) system connects Hassi R'Mel to Arzew, while a 360-mile, 1.98-Bcf/d system connects Hassi R'Mel to Skikda. A smaller pipeline (270 miles, 690 MMcfd/d) also runs between Hassi R'Mel and Isser, near Algiers. Hassi R'Mel is the hub of Algeria's entire natural gas transport network, so pipelines connect to it from the country's major natural gas-producing regions.

Exports
Algeria's dry natural gas exports totaled 2.10 Tcf in 2007, down slightly from 2.17 Tcf in 2006. Almost two-thirds of Algeria's total natural gas exports currently move through two natural gas pipeline connections operating between Algeria and Europe; the remaining one-third of total natural gas exports is exported in the form of LNG. The 670-mile, 2.32Bcf/d Trans-Mediterranean (Transmed, also called Enrico Mattei) line runs from Hassi R'Mel, via Tunisia and Sicily, to mainland Italy. Completed in 1983 and doubled in 1994, there are plans to construct an additional compressor station along the Transmed that could increase capacity to 3.48-Bcf/d. An international consortium, led by Spain's Enagas, Morocco's SNPP, and Sonatrach, operates the 1,000-mile, 820-Mmcf/d Maghreb-Europe Gas pipeline (MEG, also called Pedro Duran Farell), completed in 1996, which connects Hassi R'mel via Morocco with Cordoba, Spain, where it ties into the Spanish and Portuguese natural gas transmission networks.

There are three new pipelines under construction or in planning: Medgaz Pipeline The 120-mile Medgaz will link Beni Saf, Algeria to Almeria, Spain, with an eventual extension to France. The US$1.2 billion Medgaz is expected to be operating by September 2009, with an initial capacity of 390 MMcfd/d, increasing to 1.55 Bcf/d. Galsi Pipeline The 560-mile Galsi pipeline will run from Gassi R'Mel to El Kal, Algeria, underwater to Cagliari, Sardinia, overland to Olbia, Sardinia, and then underwater to Piombino, Italy, where it will be connected to the Italian national transfer network. The Galsi pipeline, currently under construction, will have initial capacity of 770-990 MMcfd/d and is expected to be completed by 2012. Trans-Saharan Pipeline Sonatrach and the Nigerian National Petroleum Corporation aim to construct a 2,800mile natural gas pipeline from Warri, Nigeria to Hassi R'Mel, via Niger. The pipeline would utilize the proposed Medgaz and existing Transmed pipelines to carry Nigerian natural gas to European markets. In February 2009, it was reported that representatives of Sonatrach and the Nigerian National Petroleum Corp. (NNPC) met in Lagos and disclosed they were close to finalizing plans for the $12 billion project. However, the immense length and possible sabotage are two deterrent risks to the project moving forward.

Liquefied Natural Gas

Algeria's LNG exports currently make up about one-third of the country's total natural gas exports and are expected to increase in the mid-term, when the Skikda plant comes back online. About 898 Bcf of LNG was exported in 2007, compared with 844 Bcf in 2006. Most of Algeria's LNG exports go to Europe: about 729 Bcf in 2007 compared with 800 Bcf in 2006. With the start-up of the Arzew GL4Z plant in 1964, Algeria became the world's first producer of liquefied natural gas (LNG). Algeria is the fourth largest exporter of LNG (behind Indonesia, Malaysia and Qatar), exporting around 11 percent of the world's total in 2006. Primary customers are France, Spain, and Turkey. Sonatrach has LNG export contracts with Gaz de France, Belgium's Distrigaz, Spain's Enagas, Turkey's Botas, Italy's Snam, and Greece's DEPA. In 2007, Algeria supplied 13 percent of OECD Europe's LNG imports. Also in 2007, Algeria exported 77 Bcf of LNG to the United States, some 10 percent of total U.S. LNG imports for that year. Algeria's largest LNG export terminal is the Arzew facility, whose three facilities combined produced an estimated 1,183 Bcf of re-gasified LNG in 2007. Other important terminals include Skikda and Algiers. However, the Skikda LNG plant is being rebuilt after an explosion in 2004 and is not expected to come back online until 2013.

Polymer Demand - (2007-08)

Product LDPE LLDPE HDPE PP Demand Production 80 55 21 21 120 95 60 0 Imports 25 0 25 60

Polymer Sectors of Algeria

LLDPE HDPE

Others 26% Film 74%

BM 19%

OTHER 21%

Film 44%

IM 16%

PP
Film 16%

OTHER 18% IM 19%

RAFFIA 47%

Polymer growth in Algeria is about 6-7% per annum. Films and injection molding are the major the major sectors of polymer consumption in Algeria. Consumption base is small but Algeria plans for big investments in the polymer production. Algeria is very strategic for polymer production as cheaper feedstock is available and the proximity to European market makes it all the more attractive. Volumes produced or consumed in Algeria is very low, there are not very established trades operating in Algeria. Few European and Egyptian based traders are operating in Algeria. Emerude Chemie, France and PPP Chemicals, Egypt are active in Algeria.

Fertilizer in Algeria
There is no fertilizer production in Algeria. However, with strong gas base and exploration, many foreign companies have shown interest and are planning to invest in Algerian, Ammonia and Urea production.

2012
Company Algerian-Omani Fertilizer Co Alzofert Fertalge Fertial Fertiberia SA Sofert Algerie Grand Total Ammonia 1400000 660000 330000 1200000 1400000 4990000 Urea 2450000 420000 MTA 3850000 660000 420000 330000 1200000 2540000 9000000

1140000 4010000

Investments are been done by the above companies (in table) and will target the exports market from Algeria. Sorfert Algerie has commissioned Uhde in the supply of services

for a major fertilizer complex in Arzew, Algeria. The company is investing $2 bn in the complex, which will comprise two 2200 tonnes/day ammonia plants and a 3450 tonnes/day urea plant. There will be numerous other facilities. Completion is due in 2011. Sorfert Algerie will use urea output of over 1.1 M tonnes/y and the ammonia surplus of 750,000 tonnes/y to mainly for the supply export markets.

India-Algeria Economic and Commercial Relations

Hydrocarbon remains the backbone of the Algerian economy. Majority of the hydrocarbon products are exported to EU countries and the US. Algeria imports almost all its basic requirements. France, Italy, Spain and some other European countries and the US dominate the Algerian market. India has opportunities in almost all sectors of economy as the market is price sensitive Bilateral economic and commercial ties between India and Algeria are steadily improving but they are still below potentials. The basket of Indian exports to Algeria is slowly diversifying from the traditional agricultural exports to automobiles, iron & steel, pumps, light engineering items, pharmaceuticals, textiles, plastic material, etc.

2006- $ 677 Mn

Trade Movement Algeria- India

2006- $ 28.43 Mn

At present there are no joint venture projects between India and Algeria. However, there are companies which are helping Algerian entrepreneurs in setting up projects by supplying equipment, technical inputs, know-how, training manpower etc in fields like automobiles, two wheelers, electronic items, pharmaceuticals telecommunications etc. A healthy trend of India's export to Algeria is that high value items like automobiles, steel pipes, automotive parts and pharmaceuticals form a good part of exports. In the light of the improved situation in Algeria and in view of the vast potential in this country Indian industries should have greater interaction with Algeria and make use of the opportunities.

Indian Companies investment in Algeria

There is no direct investment by any Indian company in Algeria. IOC
IOC, Indian Oil Corporation was keen in investing in refinery and downstream in Algerian, the only Indian company with took some steps forward for investing in Algeria however, they have abandoned their plan to invest in the 15-million-tonne Greenfield refinery in Algeria, being commissioned by Algerian state-owned Sonatrach. IOC is not willing to join hands with Sonatrach as a minority shareholder in the project, a company source said. Earlier, Indian Oil had expressed its interest to pick up equity in Sonatrachs new grassroots refinery project in Algeria. It was also interested in partnering with the Algerian firm as a long-term operator and service provider for its refinery project. IOC was shortlisted as one of the qualified bidders for Sonatrachs refinery project. The company (IOC) did not participate in the subsequent bidding process as Sonatrach was offering it a minority stake in the project. It was indicated that IOC would get only 35% equity stake in the project. It is understood that IOC may review its decision if Sonatrach accepts its demand. IOC was also interested in the grassroots LAB refinery project in Algeria, but globally surplus capacity situation make the investment unviable. IOC is, however, interested in setting up a gas-based cracker and associated polymer complex in Algeria in a joint venture with Sonatrach. Due to availability of gas, the project is economically viable.

Arcelor Mittal Steel

Mittal steel has invested in steel plant in Algeria. They are further expanding the capacities in Algeria.

LIST

OF OIL COMPANIES IN Aabar ABB Group Aker Kvaerner Subsea Boots and coots BP Amoco Corporation Edison Enel First Calgary Petroleums Ltd Gas de France Gazprom

ALGERIA

Gulf Keystone Halliburton John Wood Group Lukoil Medgaz Mitsui Patch International Petroceltic PetroChina PTTEP RAK Petroleum Repsol YPF SA Saipem Sasol Schlumberger Oilfield Services Shell Oil Company Sonatrach Statoil Talisman Energy Inc TotalFinaElf XPD8

SOURCE
Africa Energy Intelligence Africa Oil and Gas CIA World Factbook International Monetary Fund Oil and Gas Journal Petroleum Intelligence Weekly Platts Oilgram News Reuters News Service U.S. Energy Information Administration World Bank OPEC