Bloomberg: Algeria’s Potential OPEC Exit due to Declining Oil Reserves

The American Bloomberg Agency expected Algeria to leave the club of oil-exporting countries, based on the decline in its oil sales abroad to only 290 thousand barrels on January 2021, which is 36% less than it was in December 2020.

Sources also recorded a decline in Algeria’s exports of crude oil and liquefied natural gas (LNG) by about 30% in 2020.

According to the Gas Exporting Countries Forum (GECF), Algeria’s gas production decreased in 2019 to its lowest level in at least a decade,. The decline in foreign investment in the energy sector also played a role in the decline in oil and gas production, due to the hydrocarbons law that limits the dominance of multinational companies over oil fields.

The same source adds that Algeria’s oil production decreased from 1.1 million barrels per day in 2016 to 937 thousand barrels per day in early 2021, in line with the Organization of the Petroleum Exporting Countries (OPEC) agreement to reduce production.

Oil reserves recorded 12.2 billion barrels and 4,500 billion cubic meters of natural gas; this means that Algeria lost more than 47% of its gas reserves and 18% of its oil reserves.

These are the main reasons for the increase in domestic oil consumption, not only in comparison with the rise in population, but also Algeria’s resorting to raising its oil refining capabilities in order to produce fuel and stop its importation from abroad. The percentage of processed oil increased by 7.4%, therefore exceeding 29.1 million tons in 2020 compared to 27.2 million tons in 2019.