The entry into force of additional “voluntary” Opec+ oil output cuts from 1 May has seen Gulf heavyweights Saudi Arabia and the UAE forgo substantial output and revenue. But for second-tier producer Algeria, the cut – from 1.007mn b/d to 959,000 b/d, coming on the back of a previous 50,000 b/d cut last November – allows the country to rest output at fields that had likely been producing at unsustainably high levels.
A particular feature of Algeria’s upstream is the injection of huge quantities of gas in the country’s ageing oil fields to maintain pressure and thus output. A 15bcm leap in sales gas output to a record 102.8bcm for 2021 (MEES, 25 March 2022) was achieved thanks to a 13bcm cut in reinjection which in turn was enabled by the swingeing Opec+-led crude output cuts from May 2020 which were in large part maintained through 2021 (see chart 1). 2020’s average crude output of 903,000 b/d was down 120,000 b/d on the previous year for an 18-year low, with 2021 only slightly higher at 909,000 b/d. (CONTINUED - 1704 WORDS)
