As part of efforts to boost energy revenue, Algeria signed a new supply agreement with Italy to provide 10 billion cubic meters of natural gas each year. This is coming after Sonatrach and Eni signed several agreements in Rome, both in the upstream and downstream sector during the weekend to strengthen a long-term partnership.

According to reports, under the agreement, the North African country will provide Italy with 10 Bcm of natural gas every year through the Transmed pipeline. Algeria is making efforts to end the revenue shortfall caused by the decline in global crude oil prices.

“At current prices we won’t be able to survive two years. There are some billions in foreign reserves but they risk to melt like snow in eight to 10 months if the price of the barrel stays as it is,” Mohamed Said Beghoul, a former director of Sonatrach, told Forbes news.

For some years now, the country has tried to sustain and boost oil and gas production amidst ongoing corruption investigation, management rearrangements at Sonatrach, falling global prices and declining confidence among key foreign production partners.

Earlier this month, the OPEC member made moves to increase its natural gas output to 9 billion cubic meters per year by bringing three delayed projects back on stream.

“The three projects will come online on time, the outcome will reinforce our position as a reliable gas exporter to Europe. No delays, the projects will be delivered in 2017,” a Sonatrach source said.

Anita Fatunji