Algeria says it controlled leaks in Hassi Messaoud-Skikda pipeline
ALGIERS – Algerian state energy company Sonatrach said on Friday it had controlled two oil leaks that occurred earlier in the OK1 pipeline due to bad weather.
Sonatrach had said earlier in a statement on Facebook that the pipeline connects Hassi Messaoud to Skikda.
News of leaks come at a time when the oil sector in the country is grappling with a number of troubles.
In late July, Algeria said it expects its oil and gas revenue to fall to $23 billion this year from $33 billion in 2019.
OPEC member Algeria’s revenues from oil and gas sales were at $60 billion in 2014, before a sharp drop in prices.
“We are in a difficult economic situation,” said Abdelmadjid Attar, who took over as Algeria’s new energy minister earlier this year.
Algeria passed a new energy law in November 2019 to make its oil sector more attractive, but has not published the texts to implement it.
Attar said international investors have been awaiting these to decide whether to come to Algeria.
The texts will be published before September, he said. Fifty small oil and gas discoveries have been made that need to be developed, he added.
“Foreign firms are welcome to work with Sonatrach on these fields,” Attar said.
The coronavirus crisis on top of falling oil prices has caused unprecedented damage to Algeria’s economy, including over $1 billion in losses in the public sector alone.
“Algeria is facing an unprecedented difficult economic situation,” said Prime Minister Abdelaziz Djerad in mid-July.
This was due to “the structural crisis inherited from the former government, the fall in hydrocarbon prices and finally, the health crisis” of the novel coronavirus.
The government decided in early May to slash the state budget by half because of the global collapse in oil prices and coronavirus lockdowns.
The North African nation is heavily dependent on oil production, which generates over 90 percent of its export revenues.
The International Monetary Fund forecasts Algeria’s economy will shrink by 5.2 percent this year, and it will have among the highest budget deficits in the region.
President Abdelmadjid Tebboune has ruled out approaching the IMF for loans, saying, “accumulating debt harms national sovereignty.”