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Sonatrach to Run Another Auction to Swap Assets

01-29-2008

Algeria’s Sonatrach will look to swap assets in a planned auction of oil and gas exploration blocks in the first quarter of the year, as part of a strategy to gain exposure to new markets.

"We are going to be using this process to get Sonatrach more involved in international operations so we will... be looking for those companies to offer us opportunities," the Algerian Energy Minister Chaki Khelil said.

The auction covers 15 oil and gas blocks, including areas in the Berkine and Ahnet basins. Pre-qualification has already opened and companies including BP, Total, Shell and ExxonMobil have shown interest.

The licensing round, Algeria's seventh, will be the first since it passed a law guaranteeing Sonatrach a 51% stake in all new projects, and as such analysts will be watching closely to see if demand is affected.

The state-owned company also plans to target fresh opportunities abroad.

"We are looking at companies that complement what we don't have, either in petrochemicals, ownership in assets that could provide us exposure in areas we don't have any activities, to give us access to markets," said Khelil.

Sonatrach is already active in other parts of Africa, Latin America and Portugal.

Khelil also confirmed that Sonatrach had taken control of the Gassi Touil liquefied natural gas project, which it had previously been working on with Spanish players Repsol YPF and Gas Natural.

"We had the option to say well, let's look for another partner, and if we had taken that option it would have taken us perhaps another two years and we already have delays of three years," Khelil said.