Is the West Turning Away from Middle East Energy?

Russian energy company Gazprom said this week it was considering sending a delegation to Algeria to review the prospects for more energy work. The Russian energy giant said it was interested in exploiting the estimated 160 trillion cubic feet of natural gas there. A report published in May warned that Algerian natural gas production was in decline, however, because aging fields were no longer giving up resources. A lack of foreign investments is hurting the situation even further. Though Gazprom is reviewing its options, a warning from the U.N. Security Council suggests it may be awhile before the region?s state of affairs are in order enough to support any major foreign interest.

Viktor Zubkov, chairman of the Gazprom board of directors, welcomed Algerian Ambassador to Russia Smail Chergui to his office in Moscow to discuss bilateral cooperation in the energy sector. Gazprom in 2006 signed a preliminary agreement with Algerian state energy company Sonatrach and in 2010 produced 2.1 million cubic feet of gas from the desert Rhourde Sayah-2 well, its first ever discovery in North Africa.

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?The parties agreed to prepare and hold a business trip of Viktor Zubkov to Algeria before the end of the current year,? Gazprom said.

A May report from the U.S. Energy Department?s analytical arm reported Algeria in 2011 produced 2.1 trillion cubic feet of natural gas. Production has been in decline since 2005, however, because its natural gas fields are depleting. The Algerian government in 2012 started revising national laws to bring in more foreign investments. The May report, however, stated several planned projects have faced setbacks or were repeatedly delayed despite those efforts.

Source: http://wallstcheatsheet.com/stocks/is-the-west-turning-away-from-middle-east-energy.html/

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