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Book Chapter

International Business of Exploration—Algeria Case Study

By
James J. Emme
James J. Emme
Anadarko Petroleum Corporation Houston, Texas, U.S.A.
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Allan F. Driggs
Allan F. Driggs
Anadarko Petroleum Corporation Houston, Texas, U.S.A.
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Published:
January 01, 2000

Abstract

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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Contents

International Oil and Gas Ventures: A Business Perspective

George E. Kronman
George E. Kronman
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Don B. Felio
Don B. Felio
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Thomas E. O’Connor
Thomas E. O’Connor
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Mindy S. Kronman
Mindy S. Kronman
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American Association of Petroleum Geologists
ISBN electronic:
9781629810683
Publication date:
January 01, 2000

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