Econostrum | Economic News in the Mediterranean

Algeria increases its hydrocarbon export revenues by 70%

Written by Eric Apim on Tuesday, January 4th 2022 à 16:15 | Read 484 times

Sonatrach realizes a 19% increase in volume of its exports in 2021 (photo: Sonatrach)
Sonatrach realizes a 19% increase in volume of its exports in 2021 (photo: Sonatrach)
ALGERIA. In an interview on the Algerian channel AL24news on Sunday, January 2, 2022, Toufik Hakkar announced that "production (of oil) has increased by 5%, exports by 19% in volume and by 70% in figure." The CEO of Sonatrach stated that he had "finished the year 2021 at $34.5bn and perhaps $35bn (€30.5bn and €30.9bn). In Algeria, our revenues reached $2.5bn".

However, this growth must be put into perspective. Because of the Covid-19 pandemic, the year 2020 was catastrophic for the sector with a 40% drop ($20 billion in revenues) in the amount of oil and gas exports. Transport restrictions (air and sea and border closures) also affected world trade and therefore fuel supply.
The recovery in crude oil prices - with the decision by Opec+ to reduce production (Algeria has gone from 1 million barrels per day to 720,000) - has contributed to this upturn in 2021.

8 billion in investments in 2022

While investments fell by 50% in 2020, Sonatrach will commit $39 billion (€34.5 billion) over the period 2022-2026 in partnership with foreign groups to maintain national capacities. In the current year alone, the Algerian group should devote $8 billion (€7.1 billion) to exploration, production and petrochemicals. Envisioning a barrel of oil at a reference price of $50 (€44.2) in 2022, Toufik Hakkar is preparing the construction of a new refinery in Hassi Messaoud and the extension of the Skikda refinery to "meet local demand for fuel", the CEO said.

He also unveiled the fourth Medgaz turbocharger, which will come into service in January 2022. This installation will ensure the supply of Algerian gas to the Spanish and Portuguese markets.

During this television interview, Toufik Hakkar acknowledged that his company had indeed delivered hydrocarbons to Morocco via the ports of Mohammedia and El Jadida thanks to a tanker. This was despite the Algerian authorities' decision of 31 October 2021 to close the Maghreb-Europe (GME) gas pipeline that passes through Morocco. This blockage had led the Moroccan National Office of Electricity and Drinking Water (ONEE) to sign a contract for the supply of liquefied natural gas (LNG) with the British company Sound Energy in early December 2021.

"These are small quantities of propane and butane that have been transported under previous contracts with Moroccan customers. These contracts expired at the end of 2021 and were not renewed, in accordance with Algeria's sovereign decisions in this area," Toufik Hakkar justified.

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