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AfrOil INVESTMENT AfrOil

The Russian company is also eyeing participa- project now means lower risks for dividends in
tion in the EG-27 extraction block in Equatorial the medium term, the bank said. It also noted
Guinea (80% stake possible with 20% reserved that the development of the Sangomar field
for state GEPetrol), as well as the Etinde project alone could have required a substantial capital
on Cameroon’s offshore shelf (37.5% stake). investment outlay from Lukoil of $1.7bn over
“After the planned acquisition was 2020-2023 (over $400mn per year on average).
announced by Lukoil in late July, we had written VTB Capital (VTBC), in turn, on August
that the RSSD project looked to be an interest- 18 suggested that in the absence of large-scale
ing investment opportunity at a fairly low initial acquisitions, Lukoil might be more willing to
cost – and the fact that Woodside exercised its increase the shareholder return.
pre-emptive rights supports our view,” Sberbank Still, VTBC does not expect a tangible mar-
CIB commented on August 18. ket reaction to the news, with Lukoil’s share
For Lukoil, the fact that it will not enter the price showing no immediate reaction. ™

PERFORMANCE
Algerian Energy Minister revises

timeline for drop in gas exports

ALGERIA ALGERIA’S Energy Minister Abdelmajid Attar figure of 64 bcm.
has said that the country’s natural gas exports are The North African state has said it expects
not likely to decline significantly before the end this trend to continue in the long term. This is
of the decade. partly because rising domestic consumption lev-
Attar, the former CEO of the national oil els will reduce the volumes available for export
company (NOC) Sonatrach, told reporters at the and partly because the country is not replacing
beginning of last week that export volumes were its reserves quickly enough to compensate for
set to fall in the near future. Algeria is on track production.
to sell 45bn cubic metres of gas to foreign buyers Declining exports would probably pose a
in 2020, he said, but annual exports will sink to problem for Algeria’s government, which derives
26 bcm in 2025 and remain in the 25-30 bcm fully 95% of its foreign-currency revenues from
per year range in the second half of the decade. crude oil and natural gas sales. They might also
Volumes could then fall further to 20-30 bcm affect Sonatrach’s ability to meet all of its com-
per year after 2030, he added. mitments to foreign customers – including buy-
Later in the week, though, he backtracked, ers of pipeline gas in Italy, Spain and Portugal,
saying that he did not believe exports would as well as buyers of LNG in Spain, France, Italy,
drop into the 25-30 bcm per year range so Greece and Turkey.
quickly. This shift is not likely to occur until 2030 The NOC is pinning its hopes for the future
or later, he stated. on unconventional gas projects. Algeria is
Algeria exported around 40.9 bcm of gas in believed to possess some 20tn cubic metres of
2019, including both pipeline and LNG ship- this hydrocarbon source, and commercial dis-
ments. This marked a 36.1% drop on the 2005 coveries would boost the country’s reserves. ™

Algeria exports gas by pipeline to Europe (Photo: Eni)

P14 www. NEWSBASE .com Week 33 19•August•2020