Econostrum | Economic News in the Mediterranean

Eni acquires BP's activities in Algeria

Written by Frédéric Dubessy on Thursday, September 8th 2022 à 14:35 | Read 298 times

BP transfers all its activities in Algeria to Eni (photo: BP)
BP transfers all its activities in Algeria to Eni (photo: BP)
ITALY / ALGERIA. Eni announced on Wednesday, September 7, 2022, the purchase of the activities of British BP in Algeria (BP.L). The Italian group's statement said the transaction includes the gas fields of In Salah and In Amenas in the south of the country. "The companies have informed their partners and the relevant Algerian government entities of their agreement. The transaction is subject to government approvals, partner pre-emption processes and competition clearance processes," the text said.

Operating in Algeria under the BP Africa banner, the British company currently has a direct interest of 45.89% and 33.15% respectively in these important fields representing up to 15% of Algerian gas exports. Jointly operated with Sonatrach and Equinor, their production, started in 2006 and 2004, amounted to a total of 11 billion cubic meters of gas and 12 million barrels of condensate and LPG.

"This acquisition has great strategic value to further contribute to Europe's gas needs and strengthens Eni's presence in Algeria, an important gas producer and a key country for Eni," the Italian group stressed.

BP leaves Algeria after 30 years of presence

"BP has worked successfully with Algeria and our partners for almost thirty years, developing and supporting operations on two major gas projects for the country. We believe this agreement represents a good outcome for BP and Eni and for Algeria," comments Anja-Isabel Dotzenrath, executive vice president of BP gas and low-carbon energy.

"With its significant presence in Algeria and the region, we believe Eni will be well positioned to work with its partners and the government to advance these assets," adds Karim Alaa, BP's senior vice president for Egypt, Algeria and Libya.

With this acquisition, Eni increases its portfolio of assets in the country and, together with the recently signed new contracts for Berkine South and Block 404/208, it opens up new synergistic development opportunities, mainly focused on increasing gas production.

Italy wants to increase Algerian gas imports

At the beginning of 2022, Eni's CEO Claudio Descalzi participated in a trip to Italy by senior officials to sign contracts to increase Algerian gas exports to Italy and thus replace Russian gas. In April 2022, Eni and the Algerian state-owned company Sonatrach signed a new gas agreement.

On Sunday, September 4, 2022, after a telephone conversation with his Italian counterpart Sergio Mattarella, Algerian President Abdelmadjid Tebboune welcomed the "exceptional bilateral relations between the two countries in several areas. In May 2022, during a visit to Italy, he had renewed "the commitment of Algeria to meet all the energy needs of Italy.

The Italians want to obtain the delivery of 10 billion cubic meters of additional gas while in 2021, Algeria has transported, via the trans-Mediterranean pipeline, a total of 22 billion cubic meters.

Present in Algeria since 1981, Eni plans to extract more than 120,000 barrels of oil equivalent per day in 2023. It is the main international energy company operating in Algeria.

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