Sonatrach
Encyclopedia
Sonatrach is an Algeria
n government-owned company
formed to exploit the hydrocarbon
resources of the country. Its diversified activities cover all aspects of production: exploration, extraction, transport, and refining. It has diversified into petrochemistry
and the desalination of seawater
.
s for a net income
of 175 billion. The company, which employs approximately 120,000 workers, produces 30% of the GNP of Algeria. Annually it produces (as of 2002) 206 million tep, including 11.7 % (24 million tep) for the domestic market. Sonatrach operates the largest oil field in Algeria, Hassi Messaoud, which produced around 440000 oilbbl/d of crude in 2006. Sonatrach also operates the Hassi R'Mel field (north of Hassi Messaoud, south of Algiers), which produces around 180000 oilbbl/d of crude. Other major fields operated by Sonatrach include Tin Fouye Tabankort Ordo, Zarzaitine, Haoud Berkaoui/Ben Kahla, and Ait Kheir.
Sonatrach operates over 2400 miles (3,862.4 km) 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 is expanding the Hassi Messaoud-Azrew pipeline, the longest in the country. The project entails a second, parallel line that will more than double the capacity of the existing line.
Notes:
1.EIA 2007.
interests were as high as 67.5%. After the Arab-Israeli War in June 1967, Algeria decided to nationalize the refining and distribution activities of Mobil
and Esso
, and Sonatrach signed an agreement with Getty Oil on October 19, 1968 receiving 51% of Getty Oil's interests. It gained control over all Algerian petrochemical resources following President Houari Boumedienne's nationalisation of all French oil and gas holdings beginning on February 24, 1971. The old concession system was replaced by a seizure of a 51% share of French petroleum companies. Only Total
agreed to continue its activities; the other companies left Algeria. Beginning on December 10, 1979, a conference on the exploitation of petroleum recommended increasing participation in the research efforts by foreign companies and countries. By a decree published in the Journal Officiel on May 17, 1980, Sonatrach was divided into four enterprises. From 1986, it became possible for foreign hydrocarbon companies to do business in Algeria within a partnership with Sonatrach (this process was simplified in 1991). The Sonatrach-Gaz de France accord, signed on January 12, 1989, allowed the state to set a compromise price of about $2.30 per million BTUs. A total of 9.5 billion cubic meters of natural gas were delivered annually until 1990, and Sonatrach recovered 850 million francs in arrears, since the accord applied retroactively beginning on November 1, 1987. In March 2005, the Algerian parliament adopted the hydrocarbon reform bill, encouraging international oil company (IOC) investment in the hydrocarbon sector, which Sonatrach previously dominated. However, 2006 amendments to the hydrocarbon bill created a windfall tax on IOC profits when oil prices top $30 per barrel. This tax reached up to 50% on some contracts. In addition, the amendments gave Sonatrach rights to a 51% or higher participation option on each newly discovered project.
Sonatrach owns 50% of Numhyd
, a joint venture with Tunisia
's ETAP
, and ALEPCO, a joint venture with Libya
's National Oil Corporation
. In 1998, Sonatrach acquired Naftal
, which is the principal company selling petroleum-based fuels for domestic consumption with about 10,000 gas stations (as of 2005.) Naftec, a subsidiary of Sonatrach, operates Algeria's four refineries, which have combined capacity of 450000 oilbbl/d. The Skikda refinery (300,000 bpd) provides the bulk of Algeria's refined products production. The 30000 oilbbl/d Hassi Messaoud refinery supplies products to southern Algeria, while the 60000 oilbbl/d Algiers refinery processes crude from Hassi Messaoud for consumption in the capital. Finally, the coastal 60000 oilbbl/d Arzew refinery produces products for domestic consumption and export. In July 2006, Sonatrach and the Chinese National Petroleum Corporation (CNPC) brought online the small-13,000 bpd Adrar refinery, which is located near the village of Sbaa 40 km (24.9 mi) north of Adrar
.
reserves, containing 11.8 Goilbbl of proven oil reserves with estimates suggesting that the actual amount is even more. The U.S. Energy Information Administration
reported that in 2005, Algeria had 160 trillion cubic feet (Tcf) of proven natural gas
reserves, the eighth largest in the world. As a result, Sonatrach is very important politically. Most Energy Ministers of Algeria have come from a Sonatrach background.
and Sonatrach have a bond that unites them, which is the air company Tassili Airlines
. The two companies have as a goal to modernize and expand services of Tassili Airlines
. In 2006, Sonatrach gave Tassili Airlines
permission to expand its domestic destinations and for the future opening of international routes.
Algeria
Algeria , officially the People's Democratic Republic of Algeria , also formally referred to as the Democratic and Popular Republic of Algeria, is a country in the Maghreb region of Northwest Africa with Algiers as its capital.In terms of land area, it is the largest country in Africa and the Arab...
n government-owned company
Government-owned corporation
A government-owned corporation, state-owned company, state-owned entity, state enterprise, publicly owned corporation, government business enterprise, or parastatal is a legal entity created by a government to undertake commercial activities on behalf of an owner government...
formed to exploit the hydrocarbon
Hydrocarbon
In organic chemistry, a hydrocarbon is an organic compound consisting entirely of hydrogen and carbon. Hydrocarbons from which one hydrogen atom has been removed are functional groups, called hydrocarbyls....
resources of the country. Its diversified activities cover all aspects of production: exploration, extraction, transport, and refining. It has diversified into petrochemistry
Petrochemistry
Petrochemistry is a branch of chemistry that studies the transformation of crude oil and natural gas into useful products or raw materials. These petrochemicals have become an essential part of the chemical industry today.-Origin of Petroleum:...
and the desalination of seawater
Seawater
Seawater is water from a sea or ocean. On average, seawater in the world's oceans has a salinity of about 3.5% . This means that every kilogram of seawater has approximately of dissolved salts . The average density of seawater at the ocean surface is 1.025 g/ml...
.
Overview
Sonatrach is the largest Algerian company and the 11th largest oil consortium in the world. Its gross sales (as of 2002) was 1,530 billion Algerian dinarAlgerian dinar
The dinar is the currency of Algeria and it is subdivided into 100 santeem .-History:The dinar was introduced on 1 April 1964, replacing the Algerian new franc at par.-Coins:...
s for a net income
Net income
Net income is the residual income of a firm after adding total revenue and gains and subtracting all expenses and losses for the reporting period. Net income can be distributed among holders of common stock as a dividend or held by the firm as an addition to retained earnings...
of 175 billion. The company, which employs approximately 120,000 workers, produces 30% of the GNP of Algeria. Annually it produces (as of 2002) 206 million tep, including 11.7 % (24 million tep) for the domestic market. Sonatrach operates the largest oil field in Algeria, Hassi Messaoud, which produced around 440000 oilbbl/d of crude in 2006. Sonatrach also operates the Hassi R'Mel field (north of Hassi Messaoud, south of Algiers), which produces around 180000 oilbbl/d of crude. Other major fields operated by Sonatrach include Tin Fouye Tabankort Ordo, Zarzaitine, Haoud Berkaoui/Ben Kahla, and Ait Kheir.
Sonatrach operates over 2400 miles (3,862.4 km) 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 is expanding the Hassi Messaoud-Azrew pipeline, the longest in the country. The project entails a second, parallel line that will more than double the capacity of the existing line.
Selected Fields
| Field | Basin | Annual Production | Reserves | Discovery | Operator(s) |
|---|---|---|---|---|---|
| Hassi Messaoud field | 440000 oilbbl/d |  Sonatrach |
|||
| Hassi R'Mel gas field Hassi R'Mel gas field The Hassi R'Mel Gas Field is the largest gas field in Algeria and one of the largest gas fields in the world. It is located in the vicinity of Hassi R'Mel village, south of Algiers. The gas field extends from north to south and from east to west.... |
180000 oilbbl/d | Sonatrach |
|||
| Zarzautine field | Sonatrach |
||||
| Ait Kheir | Sonatrach |
||||
| Haoud Berkaoui/Ben Kahla | Sonatrach |
||||
| Tin Fouye Tabankort Ordo | Sonatrach |
||||
Notes:
1.EIA 2007.
History
Sonatrach was founded on December 31, 1963. At the time, however, the Algerian state held only 4.5% of the exploration perimeters, while FrenchFrance
The French Republic , The French Republic , The French Republic , (commonly known as France , is a unitary semi-presidential republic in Western Europe with several overseas territories and islands located on other continents and in the Indian, Pacific, and Atlantic oceans. Metropolitan France...
interests were as high as 67.5%. After the Arab-Israeli War in June 1967, Algeria decided to nationalize the refining and distribution activities of Mobil
Mobil
Mobil, previously known as the Socony-Vacuum Oil Company, was a major American oil company which merged with Exxon in 1999 to form ExxonMobil. Today Mobil continues as a major brand name within the combined company, as well as still being a gas station sometimes paired with their own store or On...
and Esso
Esso
Esso is an international trade name for ExxonMobil and its related companies. Pronounced , it is derived from the initials of the pre-1911 Standard Oil, and as such became the focus of much litigation and regulatory restriction in the United States. In 1972, it was largely replaced in the U.S. by...
, and Sonatrach signed an agreement with Getty Oil on October 19, 1968 receiving 51% of Getty Oil's interests. It gained control over all Algerian petrochemical resources following President Houari Boumedienne's nationalisation of all French oil and gas holdings beginning on February 24, 1971. The old concession system was replaced by a seizure of a 51% share of French petroleum companies. Only Total
Total S.A.
Total S.A. is a French multinational oil company and one of the six "Supermajor" oil companies in the world.Its businesses cover the entire oil and gas chain, from crude oil and natural gas exploration and production to power generation, transportation, refining, petroleum product marketing, and...
agreed to continue its activities; the other companies left Algeria. Beginning on December 10, 1979, a conference on the exploitation of petroleum recommended increasing participation in the research efforts by foreign companies and countries. By a decree published in the Journal Officiel on May 17, 1980, Sonatrach was divided into four enterprises. From 1986, it became possible for foreign hydrocarbon companies to do business in Algeria within a partnership with Sonatrach (this process was simplified in 1991). The Sonatrach-Gaz de France accord, signed on January 12, 1989, allowed the state to set a compromise price of about $2.30 per million BTUs. A total of 9.5 billion cubic meters of natural gas were delivered annually until 1990, and Sonatrach recovered 850 million francs in arrears, since the accord applied retroactively beginning on November 1, 1987. In March 2005, the Algerian parliament adopted the hydrocarbon reform bill, encouraging international oil company (IOC) investment in the hydrocarbon sector, which Sonatrach previously dominated. However, 2006 amendments to the hydrocarbon bill created a windfall tax on IOC profits when oil prices top $30 per barrel. This tax reached up to 50% on some contracts. In addition, the amendments gave Sonatrach rights to a 51% or higher participation option on each newly discovered project.
Subsidiaries and Joint Ventures
Numhyd
Numhyd is an oil company founded on 4 April 2003, jointly owned and managed by Algeria's SONATRACH and Tunisia's ETAP, who each own 50%. It is registered in Jersey, with offices in Algiers and Tunis. Its operations include oil fields in the Illizi basin and the Kaboudia area offshore in Tunisia...
, a joint venture with Tunisia
Tunisia
Tunisia , officially the Tunisian RepublicThe long name of Tunisia in other languages used in the country is: , is the northernmost country in Africa. It is a Maghreb country and is bordered by Algeria to the west, Libya to the southeast, and the Mediterranean Sea to the north and east. Its area...
's ETAP
Entreprise Tunisienne d'Activites Petroliere
Entreprise Tunisienne d'Activités Pétrolières is a state-owned industrial and commercial company in Tunisia directly in charge of the petroleum sector as well as the state's partnerships with foreign exploration and production operators.-Overview:...
, and ALEPCO, a joint venture with Libya
Libya
Libya is an African country in the Maghreb region of North Africa bordered by the Mediterranean Sea to the north, Egypt to the east, Sudan to the southeast, Chad and Niger to the south, and Algeria and Tunisia to the west....
's National Oil Corporation
National Oil Corporation
The National Oil Corporation is the national oil company of Libya. It dominates Libya's oil industry, along with a number of smaller subsidiaries, which combined account for around 70% the country's oil output...
. In 1998, Sonatrach acquired Naftal
Naftal
Naftal is the principal company selling petroleum-based fuels for domestic consumption in Algeria; its gas stations are a familiar sight throughout the country. Founded in 1982 by government decree, it was responsible for refining and distribution until 1987. In 1998, it became a subsidiary of...
, which is the principal company selling petroleum-based fuels for domestic consumption with about 10,000 gas stations (as of 2005.) Naftec, a subsidiary of Sonatrach, operates Algeria's four refineries, which have combined capacity of 450000 oilbbl/d. The Skikda refinery (300,000 bpd) provides the bulk of Algeria's refined products production. The 30000 oilbbl/d Hassi Messaoud refinery supplies products to southern Algeria, while the 60000 oilbbl/d Algiers refinery processes crude from Hassi Messaoud for consumption in the capital. Finally, the coastal 60000 oilbbl/d Arzew refinery produces products for domestic consumption and export. In July 2006, Sonatrach and the Chinese National Petroleum Corporation (CNPC) brought online the small-13,000 bpd Adrar refinery, which is located near the village of Sbaa 40 km (24.9 mi) north of Adrar
Adrar, Algeria
Adrar is a town and commune in Algeria, based around an oasis of the Sahara Desert and the administrative capital of the second largest province in Algeria: Adrar Province....
.
Algerian Hydrocarbon Sector
Hydrocarbons play a crucial role in Algeria's economy, accounting for roughly 60% of budget revenues and over 95% of export earnings. The country ranks fourteenth in petroleumPetroleum
Petroleum or crude oil is a naturally occurring, flammable liquid consisting of a complex mixture of hydrocarbons of various molecular weights and other liquid organic compounds, that are found in geologic formations beneath the Earth's surface. Petroleum is recovered mostly through oil drilling...
reserves, containing 11.8 Goilbbl of proven oil reserves with estimates suggesting that the actual amount is even more. The U.S. Energy Information Administration
Energy Information Administration
The U.S. Energy Information Administration is the statistical and analytical agency within the U.S. Department of Energy. EIA collects, analyzes, and disseminates independent and impartial energy information to promote sound policymaking, efficient markets, and public understanding of energy and...
reported that in 2005, Algeria had 160 trillion cubic feet (Tcf) of proven natural gas
Natural gas
Natural gas is a naturally occurring gas mixture consisting primarily of methane, typically with 0–20% higher hydrocarbons . It is found associated with other hydrocarbon fuel, in coal beds, as methane clathrates, and is an important fuel source and a major feedstock for fertilizers.Most natural...
reserves, the eighth largest in the world. As a result, Sonatrach is very important politically. Most Energy Ministers of Algeria have come from a Sonatrach background.
Air Algérie and Sonatrach
Air AlgérieAir Algérie
Air Algérie SpA is the national flag carrier airline of Algeria, with its head office in the Immeuble El-Djazair in Algiers. With flights operating from Houari Boumedienne Airport, Air Algérie operates scheduled international services to 39 destinations in 28 countries in Europe, North America,...
and Sonatrach have a bond that unites them, which is the air company Tassili Airlines
Tassili Airlines
Tassili Airlines is a passenger airline based in Algiers, Algeria. It provides scheduled domestic services out of Houari Boumedienne Airport, as well as charter flights on behalf of the Algerian oil industry.-History:...
. The two companies have as a goal to modernize and expand services of Tassili Airlines
Tassili Airlines
Tassili Airlines is a passenger airline based in Algiers, Algeria. It provides scheduled domestic services out of Houari Boumedienne Airport, as well as charter flights on behalf of the Algerian oil industry.-History:...
. In 2006, Sonatrach gave Tassili Airlines
Tassili Airlines
Tassili Airlines is a passenger airline based in Algiers, Algeria. It provides scheduled domestic services out of Houari Boumedienne Airport, as well as charter flights on behalf of the Algerian oil industry.-History:...
permission to expand its domestic destinations and for the future opening of international routes.
- 51% Sonatrach.
- 49% Air Algérie.
Presidents
- List incomplete.
- Sid Ahmed GhozaliSid Ahmed GhozaliSid Ahmed Ghozali is an Algerian politician. He was a member of the National Liberation Front party and an ally of former President Houari Boumedienne, under whom he served as head of Sonatrach from 1966 to 1977, when he became Minister of Energy and Industry...
(1966–1977) - Yousef Yousfi (1985–1988)
- Sadek Boussena (1988–1990)
- Abdelhak Bouhafs (1990–1995)
- Nazim Zouioueche (March 1995-1997)
- Abdelmadjid Attar (July 1997-1999)
- Abdelhak Bouhafs (December 1999-2001)
- Chakib KhelilChakib KhelilChakib Khelil is Algeria's Minister for Energy and Mines.He was born in Oujda on August 8, 1939, received a doctorate in petroleum engineering from Texas A&M University in 1968. After working in the United States for a few years, he joined Sonatrach in 1971, and became president of the Valhyd...
(March 2001-2003) - Mohamed Meziane (September 2003-2010)
- Nordine Cherouati (May 2010 – present)
- Sid Ahmed Ghozali