ALGERIA’S CRUDE OIL PRODUCTION IS EXPECTED TO DECLINE BY NEARLY 65% BY 2050, ACCORDING TO A STUDY CARRIED OUT BY THE FRENCH “THINK TANK” “THE SHIFT PROJECT”.
“By 2050, crude oil production is expected to decline by nearly 65% compared to 2019, and represent around 130 million barrels (0.4 million barrels per day),” said the study on European Union (EU) supply outlook, published by Algerian media.
The same source noted that by 2030, Algerian production should fall below the threshold of 240 million barrels produced (i.e. 0.7 million barrels per day) against 380 million barrels in 2019 (1.1 million barrels per day).
Result of the high rate of depletion of reserves (79%) and the poor prospects for renewal, oil production in Algeria should continue to decline sharply, explains the report which noted that since 2007, Algeria has experienced a decline in hydrocarbon production and “the prospects are not very promising”.
This evolution is explained above all by geological reasons: first of all the decline of mature fields already in production, then the lack of new discoveries and new prospecting areas, continued the same source.
As for the evolution of the production of liquid hydrocarbons (crude oil, condensates, and natural gas liquids (NGL), it shows a similar decline, of the order of 60% between 2019 and 2050, note the authors of the study.
Thus, Algerian production would represent a volume of 220 million barrels in 2050 (0.6 million barrels per day), against a level of 540 million barrels in 2019 (1.5 million barrels per day) and a maximum of production of 690 million barrels in 2007 (1.9 million barrels per day).
According to the same source, the slightly less pronounced decline in the total production of liquid hydrocarbons is due to the increase in the share of gas and condensate liquids, which is expected to drop from 29% in 2020 to 37% in 2050.
The experts, who carried out the study, report a 24% decline in the extraction of liquid hydrocarbons since the peak of 2007, asserting that “the multiplication of the production of fields of decreasing size has not had so far made it possible to compensate for the decline of giant mature fields, and to halt the decline in national production since 2007 ”.
According to the document, reserves in Algeria in 2020 represented a volume of nearly 6 billion barrels of crude oil, while the amount of cumulative discoveries stagnated around 27 billion barrels.
“Algeria has therefore exploited since the 1950s about 79% of the total reserves discovered to date. This volume of 6 billion barrels corresponds to 17 years of crude oil production at the rate of 2020 ”, argue these experts.
The difficulty of compensating for the decline of mature fields by putting small fields into production is amplified, it is explained, by the fact that the fields containing more than two-thirds of the reserves to date present a “breakeven point”. ”Estimated very high, well over $ 100 per barrel.
“Almost all of the production as of 2020 comes from fields with a discovery date before 2000,” said the study’s authors. “The production of these fields should decrease by nearly 50% by 2030 and 92% by 2050”, they predict, noting that “Algeria has 25 identified but not yet developed fields located exclusively on land”.
The identified undeveloped fields should not constitute a sufficient production relay to counter the decline of mature fields, they specify.
The prospects for new discoveries are also limited. During the 2010 decade, Algeria ranked 19th in the world in terms of exploration investments.
“The monopoly of the Sonatrach company can, just like the lack of prospects for discoveries, explain this intermediary place”, it is estimated.
