Repsol signed
yesterday a contract for the development and exploitation of a giant gas field
called Tin Fouye Tabenkort, in the Algerian desert, in association with the
French company Total and the Algerian state-owned company, Sonatrach. This
contract is pending final approval from the Algerian government.
The
three shareholders are as follows: Repsol (30%), Sonatrach (35%) and Total
(35%).
Company activities will be carried out by a joint body of the
three shareholders, each of which will contribute their own personnel to control
and execute the work.
A total investment of around 850 million dollars
(some 103 billion pesetas) will be made in developing the field, and this will
be divided up proportionally between the shareholders, according to the stake
held by each.
The contract is of the production sharing type. Repsol and
Total will receive their respective production share-outs at a coastal terminal
in condensates, propane and butane gas and will send their proportion of gas
production to Sonatrach, receiving in its place an amount to the same value of
additional condensates, propane and butane. It is also possible that, at some
time in the future, they may market gas jointly.
The Tin Fouye Tabenkort
gas field is some 900 Km. to the south-east of Algiers. Its contractual limits
border on another concession operated by Repsol since 1991, where it is
currently undertaking delineation tasks on recent oil discoveries. The Tin Fouye
Tabenkort field is one of the largest still unexploited in Algeria, with a
surface area of over 900 Km2. Recoverable reserves of gas and
associated liquids amount to almost 1,000 million barrels of oil
equivalent.
According to the programme for its exploitation, a production
of some 120 billion cubic metres of gas, approximately 14 million tonnes of
condensates and 13 million tonnes of liquid gases (propane and butane), will be
obtained over a period of 20 years, starting in 1999. The rate of production
will be 18 million cubic metres of gas per day and over 1.7 million tonnes of
associated liquids per annum.
The field's development has already been
designed and will begin immediately. This phase contemplates the construction of
a natural gas treating plant with a capacity for 21 million cubic metres a day
and its connection to the Algerian gas and pipeline grid for shipment of the
various products to their respective export terminals. Here, production is due
to start at the beginning of 1999.
This project involves high figures.
The company will invest a net amount of 32 billion pesetas in developing the
field. Signature of this contract will have raised Repsol's net proved reserves
by some 150 million barrels of oil equivalent, which amounts to 25% of current
reserves. Furthermore, own production of hydrocarbons outside the Arabian Gulf
will increase by over 25%.
Through this operation, Repsol strengthens its
upstream integration in the gas sector, thus boosting the overall importance of
natural gas in its activities and consolidating the strategy for expansion in
North Africa followed by the company in recent years.
Indeed, for some
time now Repsol has enjoyed a strong position in Egypt, where it is currently
the third largest oil company, with a net production of over 30,000 barrels per
day. More recently, in the last quarter of 1994, Repsol signed a comprehensive
agreement to develop three oil fields in the Murzuk region, in Lybia, which are
due to go into production in mid 1996. Repsol will act as operator on this
project and production is estimated to reach some 200,000 barrels per
day.
As far as Repsol's gas activity is concerned and apart from the
contract that has just been signed in Algeria, in December 1995, a 20% stake was
acquired in Atlantic LNG, which is a company promoting and exploiting the
project to build an LNG plant in Trinidad and Tobago. This plant will produce
three million tonnes of liquified natural gas per year and is expected to go on
stream during the first half of 1999.
One of the main consumers of
Algerian and Trinidad and Tobago gas is Enagas, in which Repsol holds an
interest through the 45.3% stake owned by Gas Natural
SDG.
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