Even before last week’s terrorist outrage at the In Aménas gasfield, Algeria was a fading star of the oil and gas industry. The country used to be the darling of the majors. Its energy infrastructure was developed by companies such as Shell, BP, Statoil and Anadarko Petroleum. During the past decade, however, arbitrary fiscal changes, crippling bureaucracy and the resource nationalism of Sonatrach, the national energy company, have made foreign investors wince. Algiers is seeking to relaunch the industry this year; there is talk of a new fiscal regime. That task has suddenly become harder.
Existing projects are likely to continue despite the disruption. Oil and gas account for almost 100 per cent of Algeria’s exports, and neither Sonatrach nor the operators will want to interrupt that. The country is no minnow – it is ranked fifth among net exporters of natural gas and seventh of oil products in the International Energy Agency’s league tables for 2012. The bigger the operator, moreover, the more able it is, arguably, to weather the security scare. BP, Total, Statoil and others have been through this before.
Things could be trickier for Petroceltic, which only a few weeks ago won approval to develop the Ain Tsila gasfield, 140km west of In Aménas. With an estimated 2tn cubic feet of gas, Ain Tsila is the Dublin-based explorer’s main asset, though it is at a much earlier stage of development than In Aménas, with the first gas not due until 2017. Petroceltic is looking to farm out an 18 per cent stake (it owns 57 per cent alongside Sonatrach and Italy’s Enel). Security concerns may now loom larger in any deal.