(Ecofin Agency) - PetroVietnam Exploration Production Corporation (PVEP) has announced that the Bir Sheba oilfield in Algeria has seen its first flow of commercial oil.

The Bir Seba oilfield lies in the Hassi Messaoud province in the Sahara Desert, over 600km from the country’s capital to the South.

This project, is a joint venture between PVEP, Thailand’s PTT Exploration and Production Company (PTTEP) and Algeria’s Sonatrach with 40%, 35% and 25% stake respectively. Operated by Groupement Bir Seba, the joint venture was inaugurated in 2009 and has an overall capital of $1.26 billion.

According to Vietnam’s Prime Minister, Nguyen Tan Dung, this first flow of commercial oil is as a result of long-term struggle between PVEP and Sonatrach, which has contributed to development of the bilateral traditional friendship and cooperation between the two countries. He noted that it has also created a new drive to extend partnership past traditional areas.

However, the Director of PVEP-Algeria, Hoang Ngoc Dong, stated that the Bir Sheba joint venture, as of November 4, 2015, has drilled 16 wells, drawn approximately 20,000 bpd as well as one million barrels. However, the phase 2 of the project is to begin soon thereby increasing the overall production to 40,000 bpd in early 2020.

Algeria is the third leading oil producer in the region with an overall output of approximately 38 billion barrels, a per day output of 1.2 million barrels, and also ranking 12th in terms of production and 9th in exports. With 4.500 billion cubic meters in reserve, which is capable of producing 60 billion cubic meters annually, the country is also the major natural gas producer in Africa, the second biggest gas supplier to Europe and the fourth largest supplier in the world, Energy-pedia reports.