Algeria close to gas deal with ExxonMobil, Chevron

Algeria is close to concluding an agreement with the US ExxonMobil Corp. and Chevron Corp. to develop gas fields in the country, including shale, the head of the National Agency for the Assessment of Hydrocarbon Resources (ALNAFT) Samir Bekhti said, Report informs via Interfax.

The technical aspects have already been more or less agreed upon, but negotiations on commercial issues are ongoing and will be completed soon," he said.

Algeria is betting heavily on shale production, hoping to support government revenues. Hydrocarbons account for more than 75% of the country's exports. Attempts to diversify the economy are still limited, and growing energy consumption in a country with a population of 47 million makes new investments extremely important. Chevron, in turn, noted the potential for oil and gas production in Algeria.

"Given our experience and capabilities, we are excited about the potential cooperation," the company said.

Algeria's existing gas infrastructure and the country's proximity to Europe are factors that attract foreign companies. However, the high costs of drilling in the desert do not allow for large profits, experts say.