International Business of Exploration—Algeria Case Study
James J. Emme, Allan F. Driggs, 2000. "International Business of Exploration—Algeria Case Study", International Oil and Gas Ventures: A Business Perspective, George E. Kronman, Don B. Felio, Thomas E. O’Connor, Mindy S. Kronman
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Since 1990 the Anadarko partnership has discovered over 2 BBOE in the Berkine Basin of Algeria. It was a 12-year journey from project inception in 1986 to first production at HBNS Field in 1998. Anadarko entered Algeria in 1986 on the heels of a failed LNG contract between its original parent company Panhandle Eastern, and SONATRACH, the Algerian national oil and gas company. At that time, most foreign companies had exited Algeria due to difficult contracts under a dated petroleum law. Anadarko recognized a rich, underexplored petroleum system in the Berkine Basin where surface dunes and subsurface salt had hindered seismic imaging and drilling. In January 1990, a production-sharing contract was decreed under the new hydrocarbon law enabling Anadarko to explore 5 million ac (2 million ha) in exchange for a $100 million exploration commitment. Anadarko’s first exploration well, BKW-1, was P&A’d as a dry hole in November 1991. Post-appraisal of hydrocarbon migration paths and acquisition of modern 2-D seismic data contributed to the ensuing discovery of nine major fields from 1993–1998 (with individual well flow rates up to 21,395 BOPD). First production since May 1998, at the HBNS Field, has ranged from 30 to 70 thousand barrels of oil per day and should exceed 300 thousand barrels of oil per day gross by 2003, as additional discoveries are developed. Success of the Anadarko partnership can be attributed to management’s vision and willingness to accept risk, recognition of a prolific yet underexplored petroleum system, timing (i.e., entering negotiations in advance of a new, more favorable hydrocarbon law), building relationships with SONATRACH, applying new technologies (seismic and drilling), and making a long-term exploration commitment. Future challenges focus on efficient and timely development of hydrocarbon discoveries to the joint benefit of Algeria and its foreign investors.
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A “one-stop” business view on how to succeed in international exploration and production. Success in the international upstream arena requires more than the technical ability to find oil and gas. Relationships with governments and people, mutually beneficial contracts, workable strategies, and implementation plans are necessary to build strong, mutually beneficial, and profitable ventures. Key components that drive exploration and production in the global environment are examined. Specific topics include negotiating for success, contracts, the role of technology in international strategies, cross-cultural relationships, alliances, and international upstream financing. Authors from around the world, representing industry, governments, national oil companies, consultants, and academia, contributed their perspectives. Views are provided from both sides of the negotiating table, the corporate boardroom, the resident manager, the explorationist, the businessman, and the theoretician. Geoscientists, engineers, and negotiators, who are, or would like to be, involved in the global energy business will find this collection an important reference.