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Algeria to rejuvenate aging oil wells to boost output

Algeria has launched a programme to rejuvenate its ageing oil and gas wells and boost production as part of efforts to address a crash in oil earnings, a senior Sonatrach manager told Reuters.

Low prices have slashed the OPEC member’s energy earnings roughly in half, with revenues expected at about $35 billion in 2016 compared with more than $60 billion in 2014.

“We must recover every single scrap of oil or gas, this is why we have decided to rejuvenate our wells,” Sonatrach’s vice president for exploration and development Salah Mekmouche told Reuters during a visit to Rhourd Nouss, some 1,200 km (745 miles) southeast of the capital, Algiers.

He said the programme included Sonatrach using for the first time inexpensive techniques such as Early Production Facilities (EPF) and Central Processing Facilities (CPF) in order to boost wells.

Six EPFs have already been installed around the giant oil field of Hassi Messaoud, about 400 km from Rhourd Nouss, which produces more than 400,000 barrels per day (bpd).

The Rhourd Nouss area, in the vast dunes of the Targui district, includes El Hamra gas field, Algeria’s second biggest after Hassi Rmel. El Hamra produces some 24 billion cubic meters (bcm) per year.

Mekmouche said the oil price crash had pushed Sonatrach’s management to innovate and find the cheapest solutions to boost production.

“We need to do more with less, this is our challenge at Sonatrach today,” Mekmouche told journalists at Rhourd Nouss gas facility, which processes 10 million cubic meters per day, and 2,000 meter cubic condensate per day.

He said $9 billion would be invested every year in development and exploration until 2019.

Oil output is expected to reach 69 million tonnes of oil equivalent in 2016, slightly up from 67 million tonnes last year. Gas production is forecast to rise to 132.2 billion cubic meters (bcm) from 128.3 bcm in 2015 and 130.9 bcm in 2014, according to Sonatrach projections from earlier this year.