Sonatrach issued the following announcement on March 25.
Sonatrach's relations with its partners "continue in a normal way," the Vice President of Marketing Activities of the National Oil Company, Ahmed El-Hashemi Mazighi, said in an interview with APS on Monday.
Asked about news recently published by the media about alleged suspensions of signing agreements by Sonatrach's partners, Mazighi said that "all the discussions we are conducting with our partners, whether ExxonMobil or others, are framed by confidentiality agreements. It is therefore impossible to give the press points of regular situations on the progress of the discussions.
This does not prevent us, however, to inform if there are suspensions or offsets.
In this sense, he adds that "my answer is very simple: what is the interest of a company like ExxonMobil to suspend negotiations with Sonatrach? Give a head start to competitors ?! that does not make any sense! ". In addition, adds the vice president of marketing activities Sonatrach, Algeria, it is still the country that holds the third planet resources in shale gas. Do you think a company like ExxonMobil has an interest in suspending discussions? I do not think so.
"Our relationship continues in a normal way. Moreover, in terms of commitments and contractual documents, I was the recipient, as Vice President Marketing Activities, of an endorsement by ExxonMobil last Monday (March 18, 2019), concerning the marketing hydrocarbons. This is concrete proof that these people continue to sign commitments with us, "says the same manager.
No free export of gas to countries
Asked also about media allegations that Algeria exported gas to France for free, Mazighi argues that "it is impossible to export gas or any liquid (hydrocarbon) France or another country ".
"I would like to recall some principles in the area of exports. In order for a hydrocarbon molecule to leave the Algerian soil, there must be a customs declaration. The basis of this statement is to have a measured volume associated with a price. Without declaring price and volume, you can hardly export anything. Historically, there have been two exceptions to this rule: in 2004 when we had to temporarily export our crude to our storage capacity in Korea. The crude, in this case, left Algeria with a temporary bill. The second exception concerns the processing of crude oil that began in 2018: we transfer the title of ownership to a customer and you are accountant of a balance of import of gasoline and diesel by the customs, "says the even responsible.
So, he summarizes, "to the question of whether Algerian gas was exported free to France, the answer is NO".
In addition, Sonatrach's vice-president of marketing activities notes that in the field of natural gas, in order for the contract documents to come into force, they must be approved by the company's corporate bodies and by the public authorities.
"In natural gas, unlike other liquid products, things are locked up. Do you think that the social organs of the company or the authorities can approve a contract or a rider with a price equal to zero? it never happened , "he insists.
Mr. Mazighi also notes that under Law 05/07, "Sonatrach is required to defer export prices for natural gas, LPG, crude or refined products on a monthly basis. If there is any doubt about prices, there is always a way to audit Sonatrach through the regular reports submitted to the National Agency for the Development of Hydrocarbon Resources (Alnaft).
Regarding the relations of Algeria with the French partner in gas, "we must first know that what we are exporting to him is LNG. This relationship dates back to 1976. This is the subject of four contracts: three of these contracts were signed in 1976 and the fourth was signed in 1991. Of the four contracts, two expired in December 2013. At present , only two contracts remain in force: the first deals with the export of 3.5 billion m3 / year until 2020, while the second concerns a volume of 2 billion m3 / year until 2020 also, "heexplains.
Thus, "since 1976, we have had four contracts with France that have allowed to export, up to now, 390 billion m3 of LNG, the equivalent of (7) seven years of gas export". 2017 as the base year, he argues.
According to him, the volume of gas exported to France represents 10% of Sonatrach's overall gas exports portfolio, adding that "there is not a single drop that has not been indexed at the price of Brent. All the gas first reflected the value of the crude.
Explanations on the decline of hydrocarbons exports in January
The 40 percent drop in Algeria's hydrocarbon exports in January 2019 (exports of $ 2.14 billion versus $ 3.6 billion in January 2018) is due to several factors, Mazighi said.
According to him, in January 2019, "there was a lot of port logging because of bad weather. So a lot of shipments of crude oil, refined products or LNG / LPG went from January to February.
"So we should not consider the January figures alone, because all the liquid products that were to be sent by port during this month (January 2019) slipped to February 2019 due to the closure of the ports" for meteorological reasons, he explains.
In this regard, he said that over the two months of January and February 2019 accumulated, Algeria exported $ 6,086 billion against $ 6,630 billion during the same period of 2018.
"So we have an 8% decline that reflects the decline in the average prices of our export achievements: in the first two months of 2018, this price was 68 dollars / ton of oil equivalent (toe) before falling to 62 , 7 dollars / toe in January-February 2019. The price of Brent, which guides the prices of all the hydrocarbons we export, has just dropped slightly, " explains the same manager.
Mazighi continues, "we have actually seen a decline in gas exports by pipeline. It should be known that our gas is 95% destined to the European market which is very seasonal.
Generally, the largest harvest is during the winter, when we have experienced an exceptional winter season that has been colder than usual in southern Europe. As a result, our customers have dramatically reduced their monthly, weekly and daily orders. We even felt this phenomenon on the national market. We were then forced to reinject a part, more and more important, of the gas at the level of Hassi R'mel field.
In the first two months of 2019, the volume of gas pipeline exports fell by 23% compared to the same period in 2018, due to the drop in demand from European customers, he argues.
In addition, says the same manager, "refined products and crude oil play the role of communicating vessels. In the first two months of 2019, we exported more crude compared to the same period of 2018. And at the same time, as our production is subject to commitments with OPEC, it turns out that the production of refined products has shrunk.
The other factor cited by Mazighi is that in the 2019 budget, "we had planned the start of production of the new refinery in Algiers a little earlier than February 21 (effective date of inauguration). This is a gap compared to our export forecasts. But this less refined products exported was more exported crude oil. (APS)
Original source: https://sonatrach.com/actualites/sonatrach-les-relations-avec-les-partenaires-se-poursuivent-normalement/