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News Extra: Foreign oil workers return to In Amenas gas plant in Algeria

15 July 2014

At the end of June, Reuters reported that the first foreign oil workers had returned to work at Algeria's In Amenas gas plant nearly a year and a half after the Islamist terrorist attack that killed 40 people. Citing an unidentified source at Sonatrach, the Algerian state energy company, the report said twelve expatriate workers were working at the gas facility and this number would expand progressively  in the future.

Statoil and BP, which operate the facility with Sonatrach, had demanded improved security before its workers could return. All but one of the 40 killed in the January 2013 incident were expatriates.

According to the Economist Intelligence Unit, the Algerian government refused initial requests from BP and Statoil to provide their own security at the plant, but all parties subsequently agreed on key elements of security arrangements for the return of expatriate workers to the In Amenas facility.

The EIU reports local sources saying a fundamental part of the new security structure is a new airstrip at the facility, to which expatriate workers would fly into every day from their overnight base at the Algerian oil & gas hub at Hassi Messaoud.

After withdrawing most of their staff from Algeria after the attack, both Statoil and BP returned staff on a permanent basis to Hassi Messaoud in late 2013.

In Amenas produced about 11.5% of Algeria's natural gas output before the attack and the North African state has been steadily bringing the plant back to full resumption, which frees up more of the fuel for export to Europe.

The first of the gas plant's three processing trains was brought back on stream at the end of February last year, and the second also began operating last year. The energy minister, Youcef Yousfi, and Sonatrach had both stated that the third train would be brought back into production by the end of 2013, but it is still subject to a damage assessment and could take some time before it comes on stream, according to BP. The field has capacity of about 8.5bn cubic metres a year of gas, most of which is exported.

The absence of expatriate staff from Algeria has also delayed the implementation of planned work on the In Amenas project and the In Salah gas project, which is also operated by a joint venture between BP, Statoil and Sonatrach. A project to maintain pressure in the In Amenas wells had been planned, along with the development of gas reserves in the south of the In Salah concession. The In Salah project has production capacity of about 9 bn cu metres a year. The outage of the In Amenas gas plant contributed to a 10% drop in Algeria's hydrocarbons production in the first half of 2013, which combined with a slight drop in the oil price led to a 12% fall in hydrocarbons revenue over the period.

The EIU says the Algerian government's efforts to improve security for overseas workers will go some way to restoring confidence among international firms about operating in Algeria. The country is planning a new exploration licensing round, which would be the first under the provisions of a slightly more liberal hydrocarbons law.

Meanwhile, Algerian authorities said they had decided to evacuate Sonatrach's employees from neighbouring Libya due to the deteriorating security situation there. The Algerian company is exploiting oil fields in the Ghadames basin in southern Libya, near the Algerian border.

This follows the late-June evacuation of Algerian diplomats from Libya in response to what the Foreign Ministry said was a "clear and present" threat.

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