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15th International Liquefied Natural Gas Congress (LNG 15) Trans-Saharan Gas Pipeline - A Trans-African and Trans-Mediterranean mega project

Dr. Chakib Khelil in Italy - Galsi Pipeline Sonatrach exports amounted to 54 billion Dollars in 2006 End of April 2007, hydrocarbons exports have generated

17 billion dollars International Conference and exhibition on renewable Energies “CEER” 2007

6th Seminar about Petroleum Geology (SGP6)

14 New hydrocarbons discoveries since january 2007 M. Mohamed Meziane in Peru Sonatrach in the mining sector - Acquisition of mining exploration permits for the iron field of Gara Djebilet (Bechar)

ALNAFT Agency - Approval of the development plan of the field of Menzel Ledjmet-Est, in the Berkine basin

Reception of methaner ship Medmax 1 baptised«Cheikh El Mokrani»

According to an American institute, Sonatrach is ranked among the most important Arab oil companies

Signing of a protocol agreement for the exploitation of an alum mine in Beni-Saf for the amount of 5 billion dollars

Sonatrach/IHI/ITOCHU : Construction of three new LPG trains in Arzew

Signing of a concession convention for hydrocarbons exploration and exploitation in Mali

Sonatrach-SGPS-SA-Caixa Geral De Depositos, SA (Portugal) : Signing of a shareholders agreement

Signing of MOU andan umbrella agreement for LNG psot purchase/sale

Signing of a contract for the construction of crude oil processing unit UBTS - Hassi Mesaoud

Tassili - Bombardier (Canada) : signing a contract for the acquisition of 4 aeroplanes

Signing of a bearing contract realization of new train LNG of Skikda of capacity 4,5 million tons LNG/year

Signing of a partnership agreement between Sonatrach and OCI for creating the societies «Sorfert Algérie» and«Sorfert Marketing»

Reduction of flared gases - A priority for Sonatrach

ENAGEO - Above the Upstream

The 8th Mediterranean Offshore Conference - OMC 2007 Sonatrach International Petroleum Exploration & Production/Incorporation of the office of Sipex Branch, Mali

NEAL - Renewable Energies Development Strategy Tassili Airline - Objective : « Open Public » air transport in 2008

Giant of ksour», a dinosaur named «Chebsaurus Algeriensis» Rehabilitation works of «Notre Dame d’Afrique»

« Sonatrach Magazine » is published bySONATRACH

Edited by the Communication and conceptual Strategy Department

Dépôt Légal : 913-2007ISSN : 1112-7554

Designed and printed byPC.com

Texts which are published do not necessarly represent Sonatrach official positions

Any reproduction of articles or photos must be submittedto approval.

Sonatrach : Djenane El Malik, Hydra, Algiers, AlgeriaTel. : (213) 21 54 62 50Fax. : (213) 21 54 77 00

Web Site : www.sonatrach-dz.comE-mail : sonatrach@sonatrach.dz

Algiersworld capitalof GnL in 2010

Dr. Chakib Khelilin ItalyGalsi pipeline

tSGP : A trans-African and trans-Mediterranean mega project

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International Liquefied Natural Gas Congress ( LNG 15)

M. Khelil, you have recently declared that Algeria is to play a central role in the world LNG industry, in spite of the fact that the current LNG production in our country does not exceed 20 million tons per year. How can this be possible ?

It should be first recalled that Algeria is a pioneer in LNG development. It is our country which, in 1964, with CAMEL in Arzew, exported the first LNG volumes to the British market. Since then, Great Britain has produced LNG and our exports to that part of the world have stopped for some time. However, Great Britain has once again become a consuming country and its market is again a target to develop for Algerian LNG exports. Given that, further to an international bid call, Sonatrach has acquired access to the British LNG terminal of Isle of Green, and this creates huge perspectives in a highly open British gas market, by opposition to the remainder of Europe where numerous rigid situations still exist. But nonetheless, through Sonatrach, Algeria is still, with Indonesia and Qatar, among the leaders in terms of world LNG exports, and particularly in Europe where Sonatrach exports LNG to Turkey, Greece, Italy, France (the greatest importer of Algerian LNG), and Spain. On the other hand, the American market is also one of our most important client, with 20% of the market share. Sonatrach exports are also to Japan where volumes will considerably be increased, specially after the completion of the two major projects which are at their engineering phase. The first project, entered into in association with the Spanish Group

Repsol YPF-Gas Natural, covers the whole LNG chain, from exploration to liquefaction, and expectations of LNG export volumes are about 4.5 million tons per year. The second project, in Skikda, for an annual production estimated to 4.5 million tons, will enable Algeria to be a major LNG exporter by 2011/2012, not to say the very first one as such.

What are the financial means put in place to achieve this ambitious objective ?

There will be no problem because Sonatrach has generated substantial profits over the last years. It has the capacity to pay significant dividends to the State, but also holds a capital which is sufficient enough to invest and fund all ongoing and future projects. Sonatrach has successfully reduced the level of its debt to 500 million $, against revenues of 54 million $. That is a minimum indebtedness level we intend to further reduce. As for the financing method of the company’s projects, most of them are undertaken by cash of Sonatrach, what is referred to as “project connoting”, that is, by means of the project itself. With this method, neither the State nor Sonatrach gets into debts. In fact, the problem is not the financing but rather the availability of the required equipment and materials. Let’s not forget that today the whole world is involved in the development of LNG industry, with works and projects carried out everywhere, Qatar, Egypt, Equatorial Guinea, Peru, and Russia, among many others. This demonstrates the extend to which demand for equipment for all these projects is important.

But, don’t you think that exporting our gas and our LNG by pipelines, today, limit our exports to Europe only, an area to which we are connected ?

Both ways have to be used and it is our policy to do so. The same way we do it with oil, half of which is exported by our own means and half by chartered tankers, so as not to be 100% dependant on others. This is what diversification is, and half of our LNG is also exported through our own gas tankers. However LNG is less profitable than natural gas when it is exported by gas tankers and therefore we have to consider what we generate from LNG versus natural gas.

What are the new directions with respect to new contracts with different foreign partners in the sector ?

20 years ago Algeria was looking for investments to develop its gas reserves. Today, Sonatrach is active in the whole world, is a leader in the LNG business and has financial resources. What we should ask ourselves today, is what we still need to have. Our interest is not to accelerate the depletion of our reserves. If companies have access to Sonatrach reserves, Sonatrach should also have access to reserves in other countries. The new contracts could also induce a transfer of technology and better access to some markets. Those are issues we are most interested in with respect to future partnership relations.

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EvEntsInternational Liquefied Natural Gas Congress ( LNG 15)

Sonatrach is currently renegotiating gas sales contracts with the Spanish company Gas Natural, through the GME. Have far are you in the renegotiation ?

It should be recalled that the renegotiation started 2 years ago and is not connected with any other issue. This renegotiation relates to two contracts for a volume of 9 billion cm per year. Under this renegotiation, our request was for prices to be in adequacy with the average price of gas sold to other companies in the Iberia peninsula. We hope to reach an agreement which would be satisfactory to both parties.

The Gassi-Touil integrated project, awarded to Repsol/GasNnatural, is greatly delayed, in spite of the fact that this consortium holds 80% in the LNG plant to be constructed in Arzew and 65% in the gas field development. What is your opinion on that ?

I hope that this project will be completed in 2009, as committed for by the two companies, and that the Algerian government receives the due tax revenues, including Sonatrach. This one has to get the expected LNG volumes already contracted for by American companies. As for the delay in the implementation of the project, I would like to recall that the project was subject to an international bid call, under specific conditions, and in the event both companies do not comply with the 2009 due term, there will be compensations to be paid to the Algerian part as stated in the contracts. We cannot renegotiate

a project having been subject to a bid call because this would challenge the very principle of the bid call itself which consists in conditions the contractor is bound to comply with.

The memorandum of understanding which has been recently signed between Sonatrach and Gazprom has raised concerns among some consuming countries. Any comment on that ?

This memorandum is not different from those already entered into with companies like Shell or Statoil, and it defines the areas in which both companies can undertake joint projects. It is the translation of a corporate strategy, similar to what already exists over the world and in all sectors with high added value.

What is the current level of revenues generated by LNG sales ?

Natural gas represents about 30% of our hydrocarbons revenues, in which 15% from LNG sales. Those are figures which are bound to evolve in the next few years.

What is the level of national production compared to the world one ?

The world LNG demand is very high, whereas supply is too low. This is due to the levels of development, and therefore of consumption, which are recorded in some emerging countries

and particularly in Asia. Regarding Sonatrach, the company is up to 20% present in the American market which is one of the greatest LNG consumers in the world. We are also present in the European market where we hold about 13% of the market, but we still have no access to the Asian market such as, particularly, Japan, India, China and South Korea. This market is a potential target for our future exports.

What are LNG exports perspectives by 2010 ?

According to our estimates there will be a total natural gas export volume of about 85 billion cm by 2010, in which half will be as LNG. Those are quite realistic estimates, in the light of the importance of projects recorded in the development plan of the national gas industry.

How about our LNG exports to Great Britain and the US western coast ?

We have entered into a number of agreements for that purpose and these markets will be receiving more and more Algerian LNG and gas. However, it should be noted that, since LNG American reserves are in a constant decline, we will be increasing our presence in this market which today is estimated to 20%. As for the western coast, one has to know that receiving terminals are located in the eastern coast, in the Gulf of Mexico and the Massachussetts and Maryland sites.

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International( LNG 15)

at the closing ceremony of the LNG 15, “the torch” passed on to algeria At the closing ceremony of the 15th liquefied natural gas international congress (LNG 15) held in Barcelona April 24 to 27, Algeria was chosen as the next host country in 2010 for the 16th edition of this meeting which is considered as the most important one in this sector worldwide.

Several participants, among whom the Spanish Secretary General of Energy,

Ignansi Nieto, have wished full success to Algeria in the organization of the LNG 16. On this occasion, Sonatrach Vice-President, in charge of downstream activities, M. Abdelhafid Feghouli, has expressed the hydrocarbons national company satisfaction for the results achieved at the LNG 16 as well as for the exhibition laid in parallel to the congress and has declared : «We are greatly satisfied for our participation in this congress and mainly for two reasons: the diversification of our contacts with executives of various present companies and the image Sonatrach has given about Algeria’s current capacities... We have had several contacts with representatives of companies. Many of them are interested

in setting up partnering relations with us in various activities such as development or marketing... Algeria is highly experienced in liquefied natural gas industry. The first LNG production in the world was built in 1964. Today, Sonatrach is the first LNG company». Many companies want to share our know- how and benefit by our experience in the world LNG marketing and participation in regaseification terminals. With respect to the consolidation of the LNG industry in Algeria, M. Feghouli has pointed out that the objective of Sonatrach, which currently produces 20.6 million tons of LNG, is to reach a production volume of 32 million tons in the next years, so as to preserve its leader position in the world market. This objective will be achieved through two LNG units projects to be implemented in Arzew, under the Gassi Touil integrated project, and in Skikda, with a respective capacity of 4 million and 4.5 million, as from end 2011. It will also be made possible on the basis of the optimisation plan worked out for the production of the existing plants. The closing ceremony of LNG 15 took place on Friday April 27 and Spain, as the organizer, has passed on the torch to Algeria, the next venue for LNG-16 in 2010.

LNG-16 poster809 proposals have been reviewed

In 2010, in Algiers, Algeria will organize the 16th LNG World Conference (LNG16).

For that purpose a national competition was launched for the elaboration of a logo and a poster which will be the symbol of this important event. Conditions to compete have been published in the national press in July 2006. The committee in charge of opening and validate offers has received 809 proposals, in which 469 logos and 340 posters. These offers have all been reviewed by a jury set up for this purpose. The selected logo and poster have been officially presented at the closing ceremony of the 7th Technical and Scientific Seminar, November 29, 2006, at the Sheraton hotel Oran.

algeria, first gas supplier of gas to italy in 2006

According to SNAM which holds the quasi-monopoly of gas distribution in the peninsula, Algeria has been the first supplier of gas to Italy in 2006. With 3.5% increase against 2005, Algeria has exported 33% of Italian natural gas requirements, compared to 30% from Russia, and 10% from Libya. Italy is the main export market for Algerian natural gas with a volume of 27 billion cm/year. This position should be reinforced as of 2008 with the supply of 6.5 additional billion cm/year, on the basis of the completion of the two contracts and those already concluded with four companies (Edison, Mogest, Begas and World Energy), under the framework of the first extension phase of the Transmed gas pipeline capacity.

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International( LNG 15) Barcelona, april 24 to 27, 2007

The 16th international liquefied natural gas conference to be hosted in Algiers in 2010 will be a new opportunity for Algeria to “reinforce” its role in the

world gas market, in general, and in LNG, most particularly. This is what was stated in Barcelona, April 25, 2007, by Sonatrach C.E.O. M. Mohamed Meziane, who pointed out that the application of Algeria for the organization of LNG 16 has been unanimously supported by the members of the steering committee. According to M. Meziane, this support demonstrates the acknowledgement of the fundamental role of Algeria in the development of the LNG industry as well as its reliability as a partner. M. Meziane d e c l a r e d “Algeria and S o n a t r a c h have been pioneers in LNG. The first LNG plant was constructed in Algeria, Arzew (more than 40 years ago) and we are the second LNG exporter in the world”. He underlined that Algeria is still developing its gas industry both as natural gas and LNG, so as to use its potential in line with the market and demand evolution. He added that Sonatrach is also seeking to be present in new markets which evolve “rapidly and significantly”, such as the American, Asian or north European markets, or new emerging clients such as Poland, the Netherlands and Germany. M. Meziane indicated that the objective of Sonatrach by 2010-

2011 is to export 85 billion cm of gas. This objective is off the ground with the LNG projects and the already launched gas pipelines, Medgaz and Galsi, which will directly connect Algeria to Spain and Italy. With respect to Medgaz, he recalled that contracts have been signed to start the real phase of construction ; in the Algerian portion, operations for the laying of the pipe between Hassi’Rmel and Beni Saf have already started and will be completed in 2008. Concerning the Galsi, he stated that the construction company is created and the pipeline is forecasted to be operational in 2011-2012. As for the trans- Saharan gas pipeline, under the scope of Nepad, M. Meziane said that a meeting

will gather S o n a t r a c h and the N i g e r i a n n a t i o n a l c o m p a n y NLPC, early July in Brussels, to launch its p r o m o t i o n and submit it

to interested companies. “This project is becoming a reality since feasibility studies have been conclusive” as declared by Sonatrach C.E.O. who also underlined its positive impact on the socio-economic development of the transit country, Niger, and its role in the energy supply of southern Europe, via its connection to the Algerian network from In salah, and to the GME and Transmed gas pipelines.” All these projects will enable Algeria to preserve its gas market position and to secure its partners supply”.

M. Mohamed Meziane, Sonatrach C.E.O.

“LNG 16 will reinforce the role of algeria in the gas market”

2.9% increase of the world natural gas production in 2006

With the contribution of countries outside the OECD zone (Organization of Economic

Cooperation & Development), the world natural gas production has recorded 2.9% increase and reached 2.930 billion cm. This is what has been reported by Cedigaz, the natural gas international information centre, in April 26, 2007. In Latin America, the Middle East and Africa, production has strongly increased and ranges between 4 and 9%, a level which translates the dynamic evolution of local markets and exports. Still according to Cedigaz, in the United States, with 2.3% rise for one year, the production reached 523.6 billion cm in 2006, in spite of damages caused by the 2005 hurricanes (Katrina, Rita and Wilma). In the Gulf of Mexico, due to damages caused by the 2005 hurricanes to oil pipelines and production facilities which are not repaired yet, production has declined by 2.9% in 2006, but this decline has largely been counterbalanced by the offshore production rise. In Russia, production has reached 656.2 billion cm in 2006, in which 550.2 billion cm (83.9%) produced by the giant Gazprom, that is an increase of 2.4% against 2005. In Europe (EU25, Norway, Switzerland and Turkey), the marketed production has declined by 2.2% compared to the previous year, that is a bit less than 292 billion cm. The decline was clear in all European countries except Norway where the production recorded a 4% rise, to reach 90.5 billion cm. In Great Britain, where natural gas production is continuously declining, there has been the most important decline (-8.6%). Over the last ten years, gas marketing has recorded a yearly average rise of 5.4%, with the exception of last year during which gas pipelines flows have stagnated. This progression was +2.5%, with a volume of 886 billion cm. Taking into account the volumes progression in Asia and Europe, liquefied natural gas marketing jumped by 11.7% in 2006.

Liquefied Natural Gas Congress

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trans-Saharan Gas pipeline

a trans-african andtrans-Mediterranean mega project

The Algero-Nigerian gas pipeline project, the Trans-Saharan Gas Pipeline (TSGP) which intended to forward 20 to 30 m3 billion of Nigerian gas to Europe, is economically, socially and environmentally viable. This fact has been confirmed last Monday in Brussels during the project’s launch conference.

Chaired by his Excellency Mr. Chekib Khelil, Minister of Energy and Mines in the presence of Mr. Andris

Piebalgs European Commissioner for Energy, the Director of the department of oil resources of Nigeria Mr. Tony Chukwueke, the Minister of Energy and Mines of Niger, Mr. Mohamed Adbullahi, Mr. Mohamed Mezaine, President & CEO of Sonatrach, representatives of the EU, energy companies, financial and banking institutions and the international press media a conference for the promotion of the Trans-Saharan Gas Pipeline mega project was held in Brussels on July 9th, 2007.

The Trans-Saharan Gas Pipeline (TSGP) is one of the mega–projects proposed under the New Partnership for Africa’s Development (NEPAD) ; it aims to forward 20 to 30 m3 billion of natural gas from Nigeria via Niger and Algeria to European markets by 2015.

With a total length of 4128 Km, of which 1037 Km over the Nigerian territory, 841 Km over Niger and the longest part 2310 Km will cross Algeria to reach the Mediterranean shore.

The total cost of the project is estimated at a little over 10 billion $US.

One of the benefits of the project will be to supply desert populations and countries, which are close to the project’s line, with

natural gas, which means that the north of Nigeria, Mali, Burkina Faso and the great desert region of southern Algeria will be concerned.

Many populations still use wood as combustible so with the arrival of natural gas, small areas of wood will remain put, to prevent the progress of the desert ; this is an important point of sustainable development and an environmentally friendly step forward.

In January 2002, a Memorandum of Understanding has been signed between Sonatrach and the Nigerian National Petroleum Company (NNPC) concerning the feasibility study of the TSGP, the achievement of the trans-Saharans highway and fibre optic telecommunication network parallel to the TSGP pipeline.

In May 2005, Sonatrach and NNPC granted the British company Penspen/IPA the feasibility study of the TSGP; and they in return confirmed the viability of the project.

The Trans-Saharan Gas Pipeline is a network that will bring flexibility to the Nigerian Exports ; it will mean new export lines for African natural gas towards Europe; it will secure Europe’s supplies and finally improve the social and economic development of the countries it crosses.

One has to remember that the Niger Delta is twice as close of the centre of Europe as

• Departure terminal : Brass (Niger’s delta)

• Arrival terminal : Beni Saf or El Kala (Northern Algeria)

• Length : 4188 Km

• Algerian segment : 2310 Km

• Niger’s segment : 841 Km

• Nigeria’s section : 1037 Km

• Diameter : 48» or 56»

• Capacity : 20 to 30 billion m3 / year

• Cost : $ US 13 Billion

is west Siberia, which is at the moment an important gas reserve for Russia; and as close as the Norwegian offshore fields.

The achievement of the TSGP will reinforce Algeria’s position; which will become a major transit route for hydrocarbons towards Europe.

Algeria is Europe’s third gas supplier, with more than 55 m3 billion, with the new Medgaz and Galsi pipelines exports could reach over 78.5 m3 billion. Added to which the gas pipeline extension that link’s Algeria to Italy via Tunisia could transport up to 7.5 m3 billion ; that would rank our country at the second position of Europe’s suppliers, very close to Russia being the first one.

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MinisterCommissioner AmbassadorsHonourable guestsLadies and gentlemen,First of all, allow me to welcome you to this promotion conference for a large scale work, which will be the Tran Saharan Gas Pipe.I do appreciate the presence of the commissioner PIELBAGS that confirms the European Union’s interest in the project, which is part of both continents’ concerns. I, also, would like to thank representatives of companies for being present and for their interest in the project which offers actual industrial, technological and trade opportunities.This conference’s first objective is to confirm you the economic viability of the project and to state arguments of its environmental and social attractiveness which, we hope, will arouse our partners’ interest who will come with us in its completion.This conference, which we wanted to be held in Brussels, is thus the first step in the fulfilment of this huge project.Ladies and gentlemenThe obvious advantage of the «Trans Saharan Gas Pipe» project is that it is, now, at the crossroad of Europe and Africa’s potentialities and concerns.

Thereby, there is on the one hand, an important region in Africa which has natural gas resources and a large part of flare gas, is confronting poverty challenge, underdevelopment and environmental degradation. On the other hand, Europe is facing the growing energetic deficit challenge particularly natural gas, the need to diversify the source of supply and to reduce the greenhouse gas discharge.

TSGP develops interests’ convergence between the two parties and reinforces our confidence upon the future of the project.

And my country which is largely concerned by gas pipeline achievement has a great experience in gas field which is its success asset. Let me remind here, besides its industrial and commercial experience, Algeria has, for many decades, proved to be a trusty supplier and a credible and a responsible partner.Sonatrach which is one of the main gas suppliers of Europe will make use of its infrastructures and its partnership experience for the development of the Trans border projects to realize TSGP.

allocution ofM. Chakib Khelil, Minister of Energy & Mines of algeria

Ladies and Gentlemen,According to an African outlook, ‘’TSGP’’ project is registered in the programme of the New Partnership for the Development of Africa, NEPAD, thanks to the common volition of the two great African countries, Nigeria and Algeria.The importance of this great regional development project is reinforced by the synergy that is to be created with parallel projects on the same line that is Trans Saharan and optical fiber cable; these are the basic infrastructures necessary for the economic development.These projects are Trans African and Trans Mediterranean. The achievement is a challenging and a promising example for the deployment of the South-South cooperation and will contribute to reinforce this cooperation with countries of the North in the energy fieldI wish to remind here, the repeated engagements of the industrialized countries at the time of the G8 summits, towards Africa and as regards energy. Thus, the very recent joint declaration of the G8 German presidency with huge emerging countries, recognizes “the need for a closer regional and international co-operation, more concrete and centred on results, in the energy sector”.You will agree with me, that the TSGP project is presented today as a concrete opportunity for the European countries, which form the majority of the G8, to implement their engagements.Ladies and Gentlemen,Nigeria and Algeria both of them hold, more than the two thirds (2/3) of the proven natural gas reserves in Africa. That is to say that TSGP gas pipeline will be leaned against important resources. Moreover, in its Northern part it will be reinforced by the synergy induced by the existence of a dense network of huge operational gas pipelines, under construction or project in Algeria.The TSGP gas pipeline was the subject of a study entrusted to an independent department of international fame, which confirmed its economic viability. With more than 4100 km length, the gas pipeline will have a capacity of 20 to 30 billions of cubic meters per year, with a cost estimated at 10 billions dollars. These some figures indicate its large scale.It is not for me to spread out over the persuasive elements of the project feasibility. This aspect being reserved to specialists, who planned for us two technical presentations devoted to the study results, and to the gas resources dedicated to the TSGP. Round tables are also provided in this program, to bring together the interested partners and the current sponsors around some fundamental aspects of the project.Ladies and Gentlemen,The “TSGP” has already aroused an interest with multilateral institutions such as the Economic Commission of the United Nations for Africa (the ECA), and the World Bank. These two institutions consider this project viable, which will allow consolidate the Africa’s position as a strategic supply source for Europe.I am pleased to address directly, today, representatives of: gas industry, European institutions and different financial institutions, as to invite them to commit themselves to the fulfilment of this project, which is a symbol of international cooperation with significant economic results for both regions involved.

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It is up to us, henceforth, to work together in order to fulfil this project which will help to strengthen energy relations between Africa and Europe, through a new supply source represented by a country with a huge potential. I invite upstream actors from Nigeria, the great traders and industrial users to signal their interest in the TSGP by joining present sponsors, Sonatrach and NNPC, being new partners in the development of the second part of the project.A call for bids has also been launched to international community (States, multilateral institutions, companies, banks) in order to fulfil this project.

Ladies and gentlemen To conclude with, allow me to emphasize that it is with enthusiasm, but with realism also, that we, now, comprehend the continuation of the Trans Saharan Gas Pipe development.We are, more than ever, convinced today of the necessity to fulfill this project, not only in regard of its viability but also in regard of its strategic importance in the region.

Thank you for your attention

allocution ofMr. andris piebalgs,European Energy Commissioner

reinforcing theEuro-MediterraneanEnergy CooperationSpeech at the conference to promote trans Saharan Gas pipeline

Dear Ministers, Your Excellencies,

Ladies and Gentlemen,

Let me start by congratulating Minister Khelil for the initiative of this Conference which is aimed at presenting the Trans-Saharan Gas Pipeline project in Europe.

Before I start, I would like to wish you all a warm welcome in Brussels and thank Minister Khelil, Minister Mohamed Abdoulahi from Niger and Mr. Sadiq Mahmood, Permanent Secretary from the Ministry of Petroleum resources from Nigeria, as well as Sonatrach, Nigerian National Petroleum Corporation, all other companies and respective delegations for having travelled to Belgium.

I also would also like to thank the organizers for giving me the opportunity to present the main pillars of the EU energy supply security policy as well as reflecting on EU energy cooperation strategy with Mediterranean and Sub-Sahara African countries.

I will start by saying a few words about where we stand today with respect to European Energy policy, a policy which clearly underlines our energy interdependence and gives us new impetus for further enhanced cooperation in the energy field.

Energy has been at the core of the European cooperation and integration process for more than 50 years and much has been achieved. Today however we are facing new challenging times for the world’s energy sector and for mankind in general.

Energy security and climate change are on the top of the world’s political agenda.

Global demand for energy is set to increase by more than 50% by 2030, global population is expected to grow from 6,6 billion to more than 9 billion. If we continue with «business as usual», such a dramatic increase in energy demand will pose a threat to the global economy and to the climate, as energy consumption will be accompanied by a related rise in CO2 emissions. By 2030, this could mean an increase of CO2 emissions of 110%.

In March this year, the European Union took an unprecedented step by agreeing on an integrated climate and energy policy, backed up by a detailed Action Plan. It aims to respond to the challenges of competitiveness, security of supply and sustainability.

This energy package contains a strategic policy objective : an independent EU commitment to reduce greenhouse gases by at least 20 % by 2020, compared to 1990 levels. This commitment will be extended to 30 % if other developed countries commit themselves to comparable emissions reductions.

The Action Plan included in the energy package contains clear indications about the steps to be undertaken :

a 20% increase in energy efficiency by 2020 by means of a number of concrete measures,

a binding target of 20% for renewable energy in the EU energy mix by 2020,

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boosting the development of low carbon technology,

agreement to further develop a fully integrated single energy market. The aim is to open the way for new investment, new entrants and new choices for customers,

a set of concrete measures strengthening the solidarity between the memberstates,

and, last but not least, developing the external dimension of the EU energy policy. Our strong commitment is to deepen energy partnerships with producers, transit countries and consumers, to build co-operation for our mutual benefit.

Ladies and Gentlemen,

Let me now turn to addressing European energy consumption prospects and recent developments in the external dimension of the EU energy policy.

Fight against climate change is the main driver of the EU energy policy. Emissions trading scheme favours ‘‘cleanest’’ technologies, and that means particularly favourable conditions for use of the natural gas.

The EU gas demand will continue to grow steadily, by 1,7% per year, in particularly as the result of significant increase in the use of gas for electricity generation. The EU gas demand is expected to reach 536 bcm by 2010 and 619 bcm by 2020.

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The combined effect of increasing primary energy demand for natural gas and declining domestic production will result in a significant growth of import dependency. Consequently, natural gas imports are projected to increase sharply, and may reach 85% of EU gas consumption by 2030 compared to 50% in 2000. In concrete numbers, it would mean gas imports of 331 bcm by 2010 and of around 500 bcm by 2020.

The increasing dependency on natural gas imports raises significant concerns as regards the EU security of supply in the long run. The number of suppliers is limited, global demand for gas is increasing and new infrastructures, including for long distance transport as well as LNG terminals, need to be developed.

Diversification of suppliers and routes is therefore a key part of the EU energy supply security strategy. In order to better diversify its energy supplies, the EU has strengthened cooperation with its neighbouring countries and energy producing regions.

Energy cooperation in the existing Euromed framework and through the soon to be launched EU-Africa Energy Partnership are of special interest to us today.

The European Union is also committed to reinforcing the Euro-Mediterranean energy cooperation in general, and with Algeria in particular. Algeria has been a reliable supplier to the EU for more than 30 years, and we are looking forward to deepening our bilateral ties and cooperation.

Thank You.

Dear Ministers, Your Excellencies,

Ladies and Gentlemen,

It is my pleasure and honour to be with you on this memorable event to receive the progress so far made on the 2nd phase of the Trans-Saharan Gas Pipeline Project.

In continuation of previous discussions on ways of promoting economic development of the African Continent and Foster regional cooperation, the governments of Nigeria an Algeria met and directed

the execution of certain landmark bilateral agreements. These agreements provide, amongst others, the implementation of Trans-Saharan High Way, the Fibre Optic Telecommunication System and the Trans-Saharan Gas Pipeline Project (TSGP). The governments initial mandate for the TSGP was for NNPC and its Algerian counterpart, SONATRACH to jointly carry out a comprehensive feasibility study for the purpose of establishing the technical and economic viability of a pipeline that will link Nigerian gas fields through Niger, Algeria enroute European markets. The TSGP is a component of the bilateral cooperation by governments of the sub-region to achieve certain fundamental objectives such as the integration of the economies of the sub-region, creation of wealth, poverty alleviation and the improvement of living standards of the people in the sub-region. It is also the expectation that the implementation of the project will be a major component for the fight against desertification in the transit countries.Tue consultants Messrs PENSPEN/IPA Energy Consulting of UK who completed the feasibility study successfully

allocution of Mr. tony Chukwueke, Director of the department of oil resources of Nigeria

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14

on schedule in May 2006 confirmed the viability of the project. The governments of Nigeria, Niger and Algeria not only accepted the study but directed that the project progress to the second phase which is the Definitional phase. This second phase is critical in the sense that it would provide indices for decision making on all aspects of the project. Agreements on Finance, Commerce, Transportation, interstate issues as well as harmonization of all laws and regulations in the three countries are expected to be well articulated.

THE BENEFITS AND CONSTRAINTS OF THE PROJECT

The project perfectly identifies with the objectives of the New Partnership for African Development (NEPAD) in the sense that it will create wealth, eradicate poverty and improve the living standards of our people.

Ladies and gentlemen, you will agree with me that the project would have immense direct benefits to our people whereby the much needed revenue for social and economic development would be guaranteed in all the countries it traverses.

It is obvious that the funding requirement for a project of this magnitude is well beyond the funding capacity of the member states. It is in this regard that I consider this conference the appropriate forum to invite foreign investors to participate in this laudable project. Investors are reassured of a favourable environment through competitive legal and regulatory framework as well as attractive tax regimes.

THE ENABLING ENVIRONMENT FOR NIGERIA’S GAS

The gas sector reform in Nigeria has resulted in the Downstream Gas Act which aims to create a distinct legislative framework for gas, and the National Gas Fiscal Reform Act (NAGRAFA) would address the limitations of the current fiscal regime in gas.

These two legislations will provide enabling environment for sustainable gas growth. Also a sector based on gas pricing framework has been developed by the government of Algeria. This framework would enable the

growth of a diverse downstream gas sector by ensuring affordability while not compromising the commerciality of supply. The Gas Master-plan will develop an infrastructure blueprint which will guide investment in gas sector such that the strategic objectives are realized.

NIGERIA’S GAS ENDOWNMENT / SECURITY OF SUPPLY SOURCE

- Nigeria’s gas potential is quite enormous and holds tremendous prospect that would meet the supply need of the Trans-Saharan gas project.

It has been well established that Nigeria has more gas reserves than oil.

With the current reserves of about 184 trillion standard cubic feet, consumers are guaranteed long term availability of gas.

Participants to this conference may also wish to note that the gas sector in Nigeria has witnessed a remarkable reduction in gas flaring from about 85% in 1999 to the current level of 37%. The target for zero gas flaring by the year 2008 is expected to boost the production capacity even further.

I wish to note the concern of the international community on the recent militancy in the Niger Delta Master plan being put in place by the present government also permanently address the incidences of restiveness by the host community through job creation, provision of infrastructure as well as mitigating the environmental impact. We therefore wish to re-assure our potential investors and customers that there is secured source of gas supply in Nigeria.

In summary, the Trans-Saharan Gas Pipeline Project provides a good opportunity for all investors in the gas industry. I wish therefore to extend invitation for cooperation towards achieving the desired goals of TSGP.

Thank You.

allocution of M. Mohamed Meziane, Chief Executive officer of Sonatrach

Mr President

Excellencies Ministers

The European Commissioner to Energy

Honourable Assistance

Partners and Friends

Ladies & Gentlemen

It is with a great pleasure that I welcome you to our conference about this new natural gas transportation work linking Africa to Europe and would like to thank you for being here today.

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It is a new intercontinental gas pipeline called Trans-Saharan-Gas-Pipeline, TSGP, which will link Africa to Europe starting from Nigeria to the Mediterranean coasts and crossing Niger and Algeria. This will create a new route for the transportation of a clean energy.

We are highly honoured by the presence of the honourable Government members of Nigeria, Niger and Algeria.

It is a clear expression of their active and constant support to this important project as well as the concrete institutional support it enjoys on our continent.

Likewise, we highly appreciate the participation of the renowned representatives of the European Union and the support of the Commission for this future endeavour which is most certainly an additional asset for the security of gas supply on the northern shore of the Mediterranean.

Furthermore, I would like to welcome the large number of press and media reporters, and we fully measure their role in spreading the right information and the relevance of the perspective it adds to it.

Ladies & Gentlemen

Let’s now have a look at TSGP and its main characteristics.

It is a work of over 4000 km long, and will link the south of Nigeria, via Niger, to the European seacoasts through the Algerian gas pipeline network crossing the Mediterranean.

Its annual volume of transport capacity ranges from 18 to 25 billion cubic metres of natural gas and it will supply the populations of the north east and centre of Nigeria, and many others in countries like Niger.

It will supply the African regions which it will pass through with clean energy and enable the recovery of a significant volume of the currently flared gases in Nigeria.

It will open up the crossed countries, generate other industrial projects and better secure gas supplies in Europe and other parts of the world.

It will then certainly contribute to the fight against deforestation in Africa, offering the population of the crossed countries the possibility to replace wood, by natural gas, as fuel.

This world scale project fits into the scheme of the structuring and integrating projects of the New Partnership for Africa’s Development (NEPAD) whose energy sector, in particular, offers a rich and strong platform for an African multiform cooperation, interregional and international involving both economic players and national and international institutions.

Honourable Assistance

Sharing with the national Nigerian company NNPC the pride of being one of its promoters, Sonatrach is delighted with the prospects of increasing the number of sponsors and the audience of TSGP.

We are confident with regard to having new partners amongst the players of the international hydrocarbons industry joining us in this great economic adventure, very human in essence, as well as new institutional support within the European Economic Community and the International one.

Sonatrach is an experienced player in international gas marketing and gas transport by pipeline on onshore and offshore distances.

We have built an important network of over 16000 km of hydrocarbons pipelines and have transported over 86 billion cubic metres of natural gas in the past year.

To state as an example, we have for nearly twenty five years been operating the Trans-Mediterranean Pipeline, a transcontinental gas pipeline with an underwater section, which installation represented at that time a depth record and a technological first. We built it and manage it in partnership.

We are currently tackling the final phase of the Medgaz, a direct pipeline link between Algeria and Europe through Spain. Which we strongly wish to complete with respect to its founding principles, within the contractual deadlines and conditions agreed upon by the Spanish, French and Algerian partner companies of the project.

All the signs are that Sonatrach has the ability to create and manage new exportations routes for natural gas toward the European market, since partnership represents its main development lever and its key success factor in Algeria and abroad.

In the course of its history, our company has often carried out and always successfully managed projects of such quality with partners sharing similar visions for the future of our industry.

We are already associated with The Nigerian National Petroleum Corporation, our serious, strong and renowned partner in the TSGP.

We are extremely pleased to be together today and to have the opportunity to promote our project before you.

This pipeline deserves all our support given its genuine usefulness and proven profitability.

A detailed presentation regarding the feasibility study performed by Penspen/IPA Company upon Sonatrach and NNPC’ s request will demonstrate it shortly.

Sonatrach remains attentive to the world energy market’s developments and reasserts its motivation to use all partnership and cooperation possibilities between producers and consumers, industrial operators and institutional players.

We thank you and welcome your questions, suggestions and proposals.

Thank you for your attention.

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In March 26 to 28, 2007, Dr Chakib Khelil, and an important delegation including M. Mohamed Meziane, Sonatrach C.E.O., visited Italy upon invitation by M. pier Bersani, Italian Minister for Economic Development. During this visit, M. Khelil had several contacts with

government authorities of the country, with M. Alessando Ortis, Chairman of the gas and power energy body, M. Antonio Marzano, Chairman of the labour and economy counsel (CNEL), and M. Antonio Catricala, Chairman of the antitrust market and competition body.

Monday March 26, the minister appealed to representatives of Italian companies partners of Sonatrach to increase their involvement towards the materialization of the Galsi ambitious gas pipeline project which will connect the two countries. Considering that this project will be a crossroad for the world energy market, the minister indicated that all technical, legal, fiscal and economic studies relating to the project have been finalized. He appealed to small and medium companies without any link with traditional suppliers to apply for gas marketing, particularly the portion of Sonatrach (4 billion cm) to be exported by the Galsi and the extended Mattei gas pipeline.

During his official visit to Italy in March 26 to 28, 2007, Dr Chakib Khelil had the opportunity to appreciate the increasing interest shown by Italian companies involved in the sector to be partners with Algeria

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March 27, at a press conference, M. chakib Khelil insisted on the constant availability of Algerian gas in the world market and said that even during the worst

period of the nineties which the country has gone through, Sonatrach has never interrupted its gas supplies to its clients throughout the world. He also indicated that the intergovernmental agreement relating to the gas pipeline project connecting Spain to Italy via Sardinia (Galsi) will be signed shortly and that this visit was the opportunity to clarify a few items and accelerate the signing process. He

told journalists that his visit was “productive” and enabled him to clarify several aspects with his Italian counterparts, prior to the signing for the laying of Galsi.

The minister also referred to, on the one hand, the licences and authorizations which are required for the effective operations of the company Sonatrach Gas Italia which will be in charge of marketing Algerian gas in Italy, and on the other hand, issues related to expropriation rights and Italian national and regional laws. “These items need to be clarified and experts groups have been set up for this purpose”.

A productivev i s i t

March 26 to 28, 2007

in Italy

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1�

25% of transport capacity are reserved for Sonatrach, while its investment effort

represents 36%

GALSI : the new route to secure to Italy

In the afternoon of March 26, the Algerian delegation gave a conference attended by some hundred representatives of gas marketing companies operating in Italy. M. Mohamed Meziane, Sonatrach C.E.O.

underlined the importance given by Sonatrach to the Italian market which, with the Galsi project, represents a key factor in Sonatrach gas strategy development. In line with this, M. Chawki M.Rahal, marketing Vice-President, highlighted gas commercial relationships between Sonatrach and Italy. Significant figures do reflect the importance of this partnership: Italy is first in terms of gas exports with 43% of the total exported volume, in which 33% from Sonatrach. M. Rahal clarified the objective and scope of Sonatrach Gas Italy, a subsidiary of Sonatrach in charge of marketing gas in Italy,

At the same conference, M. Chekired, pipeline transport Vice-President, talked about Sonatrach important transport network, a key element in the gas strategy of the company. This network covers

more than 7500 km and includes 12 gas pipelines. M. Chekired provided information about progress made in the different phases of this project which reinforces gas security in Europe, and to Sardinia which will be directly supplied.

The exchanges and debates did show the interest demonstrated by attendees to the development of Algeria’s gas strategy in Italy. In relation to that, M. Khelil indicated that technical, legal, fiscal and economic studies are completed and that Algeria is determined to have the Galsi on stream by the end of 2010, or very beginning of 2011, at the latest.

SONATRACH

25 %25 %

6 %6 %

13 %

25 %

Ascopiave

World Energy

HERA

EDISON ENEL

18 %13.5 %

13.5 %

9 %

5 %5 %

36 %

ENEL

SONATRACH

Wintershall

EDISON

HERA

SFIRSProgemisa

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Galsi technical chartel-Kala - cagliari cagliari - Olbia (sardinia) network of tuscany (italy)

length : 280 kmDepth : 2800 m

length : 300 km length : 120 kmcapacity : 8 BcM/Y

Algerian natural gas network Total length : 7500 km Number of gas pipelines : 12

Nombre de Stations de Compression : 30Number of compression stations : 30Operational capacity : 130 Gcm/year Export capacity : 39 Gcm/year - 11.5Gcm/year through the

Pedro Duran Farell gas pipeline - 27.5 Gcm/year through the Enrico Mattei gas pipeline.To this date, more than 90 Gcm of gas have been exported to Spain via Morrocco, and more than 407 Gcm to Italy via Tunisia.The Enrico Mattei gas pipeline The oldest reliable and flexible route

May 1983 GO1 (549 km*48”), first export transcontinental route from Algeria to Italy (SAIPEM).

June 1987, doubling of the line (GO2) (549km*48”) (SAIPEM)August 1995, reinforcement of the connection between Algeria and Italy with the addition of

the compression station of Ain Naga (Biskra) at PC2 (GO1-GO2) (ABB).End of 2006, more than 407 billion cm of natural gas have been transported and delivered by

the GME since its first gas in 1983.

Next step: Intergovernmental agreementThis agreement is important and necessary.Its objective is :• To confirm the strong commitments of the states to promote and lay the gas pipeline.• To define the legal status of the different portions of the pipeline. • To speed up the issuance of licences and permits ..• To speed up the raising of European funds (trans European Network-Energy).

Sonatrach / Edison - Enel - Hera - Ascopiave -Worldenergy

Signing of five natural gas sale/purchase agreements for the Galsi project

In November 15, 2006, Sonatrach entered into five natural gas sale/purchase agreements for the Galsi project with Edison (2Gcm/year), Enel (2Gcm/year), Hera (1Gcm/year), Ascopiave (0.5 Gcm/year) and Worldenergy (0.5 Gcm/year). The signing ceremony took place on the occasion of the official visit to Algeria of M. Romano Prodi, President of the Italian Council.

This ceremony was a determining step in the project.

It should be stated that these agreements follow up the great cooperation which dates back to three decades between Sonatrach and the Italian companies, and reflect Sonatrach willingness to actively meet the increasing gas requirements of Italy and Europe in general.

supplies

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20

NATURAL GAS A STRONG INTERDEPENDENCY BETWEEN ALGERIA AND ITALY

Natural gas imports of Italy (2006)

Natural gas exports from Algeria (2006)

Breakdown of natural gas exports from Algeria

Algeria : main natural gas supplier of Italy

Other2%

Algeria33%Nigeria

5%

Libya10%

North of Europe

23% Russia27%

Other1.9%UK

2.8%

Rest of EU Countries

6.6%

Turkey6.4%

Italy44.1%

France13.6%

Iberic Countries 24.6%

SONATRACH : A MAJOR SUPPLIER OF EUROPEGas volumes exported in 2006 : 61Gm3,

62% by gas pipelines and 38% by LNG

European countries share of algerian natural gas

USA

UK

Slovenia

Turkey

Italy

France

Portugal

Spain

Belgium

Greece

Asia

Tunisia

Algeria

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In February 18, 2007, Sonatrach has signed two long term natural gas sales agreements for a total volume of 3Gcm/year to be supplied to the Italian market by the Enrico mattei gas pipeline, as from 2008.

The first agreement entered into with Enel provides for a volume of 1 Gcm/year to be added to the 6 Gcm/year of Algerian natural gas already delivered to Enel. Enel is one of the main customers of Sonatrach and this new agreement will reinforce the already existing relationships between the two companies. Sonatrach and Enel are also partners in the Galsi project and, in November 15, 2006, have signed an agreement for the supply of 2 Gcm/year by means of this pipeline. Besides, Sonatrach has secured the direct marketing of 2 Gcm/year by its subsidiary in the Italian market. This is in line with the

strategy to have access to the international gas downstream as already implemented in Great Britain by Sonatrach Gas Marketing subsidiary, and will contribute to secure natural gas supplies to Italy.

With a volume of more than 27 Gcm/year, Italy is the main export market of Sonatrach natural gas. This position should be reinforced in 2008 with the delivery of the additional 6.5 Gcm/year committed for in these two agreements and in the contracts already signed with Edison, Mogest, Begas and World Energy under the first extension phase of the capacity of the Trans Tunisian pipeline company.

With the signing of sales agreements with new operators in the market, Sonatrach has an active role in the opening up of the Italian gas market.

Signing of two natural gas sales agreement for the Italian market

Sonatrach - Enel

EVOLUTION OF ALGERIAN NATURAL GAS ExPORTS TO ITALY AN ACTIVE COOPéRATION BETWEEN THE TWO COUNTRIES

1983 : delivry begin via the GEM

1985 and 1995 : Extention works (second line compression stations)

1997 : LNG supplies to Panigaglia

2000 : first LNG spot sale

2001 : Signing of a new contract with ENEL

LNGPipeline

Since 1983, Algeria has exported more than 407Bm3 of natural gas to Italy, proving its reliability (constant uninterrupted flow) and its competitiveness

SONATRACH : A MAJOR SUPPLIER OF EUROPEGas volumes exported in 2006 : 61Gm3,

62% by gas pipelines and 38% by LNG

European countries share of algerian natural gas

USA

UK

Slovenia

Turkey

Italy

France

Portugal

Spain

Belgium

Greece

Asia

Tunisia

Algeria

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In April 1, 2007, on the occasion of his presence a t the weekly forum organized by El Moudjahid, Dr. Chakib Khelil, Minister of Energy and Mine, highlighted the balance and perspectives of the

sector. Talking about activities, the minister has pointed out the performance of Sonatrach in 2006, when Several hydrocarbons discoveries were made by Sonatrach alone, for a global investment of 7 USD dedicated to the development of the company. This effort enabled Sonatrach to generate 54 billion USD for hydrocarbons exported in 2006. Dr Khelil has also underlined the fact that national requirements for petroleum products

In February 8, 2007, in Algiers and in the presence of executives of the sector, Dr. Chakib Khelil, Minister of Energy and Mines, was made Man of the Year 2006 by the “Organisation Nationale de la Continuité des

Générations”, in recognition of all his efforts to develop

Dr. Chakib Khelil, Man of the Year

2006

Sonatrach exports amounted to

54 billion Dollarsin 2006

the energy and mine sector. On the same occasion, honorary compliments were paid to M. Mohamed Meziane and Noureddine Bouterfa, respectively Sonatrach C.E.O. and Sonelgaz C.E.O.

which amounted to about 37 million toe last year, have totally been met in 2006. With respect to 2007, the minister considers that oil prices will remain rather high, given the increase of the world oil demand. As for the main ongoing projects, the minister did state that the operational start up of the Galsi gas pipeline between Algeria and Italy and which is expected to be operational early 2011, at the latest, will give Sonatrach the possibility to export some 4 billion cm of natural gas to the Italian market : 2 billion cm though the Galsi and 2 other billion by means of the existing gas pipeline.

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On the basis of figures stated end of April 2007, and over a rather short period, Sonatrach hydrocarbons exports amounted to 17 billion dollars. This level of exports

has generated substantial profits during the first four months of this year.

End of April 2007, hydrocarbons

exports have generated

17 billion dollars

This conference - exhibition which was held in Algiers, Hotel El Manar, June 17 to 19, 2007, was attended by more than 350 national and international participants.

During three days, distinguished experts debated about perspectives and challenges of renewable energies in the current environment of deep changes.Given the great potential of Algeria in terms of solar energy, this subject was at the core of the programme which was presented.Other subjects connected with the development of these energies were also discussed. Equally with the contribution of new technologies and the role to be played by industries. The exhibition organized in parallel to the conference and the stalls and presentations by seventeen industrial companies, on the site, did demonstrate the interest shown for a sector which represents a real potential of growth and opportunities. It should be pointed out that this great initiative translates the administration strong political will to develop renewable energy sources. Let us recall that more than 18 villages and 3000 houses located deep south already use solar electricity. In addition, the rural

electrification programme for the period 2005-2009, provides for the electricity connection of 16 villages in isolated zones of Algeria. This is quite a progress made by Algeria. A company, created for that purpose, NEAL (New Energy Algeria) has been entrusted with a huge programme which aims at producing hybrid electricity, gas-solar, with a capacity of 150MW.

International Conference and exhibition on renewable Energies “ CEER” 2007

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seminar about

Exploration and research & Development

This meeting was attended by Sonatrach engineers and researchers, as well as Algerian and internatio nal university members and experts involved in petroleum geology. The opening speech was made

on behalf of the minister of energy and mine by M. Hanifi, Hydrocarbons General Manager, who said that this meeting was “undeniably, a mutually profitable opportunity for university members and the various players in our activities”... “This meeting takes place at the same time as the launching of major projects aimed at extending the scope of the research and development activities to which Sonatrach intends to give their real dimension as a development factor”.

According to M. Hanifi, “the role of Research & Development in the hydrocarbons sector is essential because it is the

very basis for an efficient and sound use and control of new technologies and development processes”.

According to M. Hanifi, this activity “must be an integral part of the global corporate management and strategy”... “Projects and issues have to be diligently dealt with, and particularly those at Sonatrach working sites and operational structures”.

With respect to that, he did indicate that “Sonatrach is being equipped with the appropriate research management tool, with the optimal support of the entire human resources of the company as well as those of national and international university research institutions”.

The 6th international seminar about

“petroleum geology” organized by

the Research and Development

Centre in Algiers, April 15 and 16,

2007, focussed on the assessment of

petroleum research and exploration as

well as progress made over the last

years in the use of new technologies.

th

25

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15-16 avril 2007

Petroleum Geology (SGP6)

Stating that Sonatrach is going through “a crucial step in its evolution”, he declared “being confident” in the capacity of its engineers, researchers and experts to “take advantage of this situation and be able to take up competition challenges”.

“The role of engineers and researchers is indisputable and, provided they are well considered, their contribution is bound to be positive”.

As for M. Mohamed Meziane, Sonatrach C.E.O, he said that “this meeting should give experts and professionals of the sector the possibility to provide their efficient contribution to our industry and open up new perspectives in terms of petroleum geology and geosciences in general”.

M. Meziane considers that hydrocarbons resources are more and more “complex” and that it is “quite normal to focus on concrete problems encountered in the implementation of sciences and techniques in the various blocks and fields, for purposes of being up to the challenges of our environments”.

“The performance and the results achieved as well as our future projections are based on this approach” as stated by M. Meziane who pointed out that 200 exploration wells have been drilled and 38 discoveries made over the last three years.

M. Meziane also dealt with the involvement of Sonatrach in research and exploration abroad.

“Outside a dozen blocks abroad, we are sole operators in 95 blocks and joint-operators in 55 ones, in Algeria”, and the upstream investment forecasted for the next five years exceeds 26 billion dollars.

Participants had different sessions to review exploration strategy, mining potential in Algeria and in the various exploration basins. Focus was made on several aspects such as Hassi Messaoud, quartzite, tight gas, Reggane, the Tell, and the Algerian offshore.

GROUP nEWs

2�

Four new hydrocarbons discoveries in the Berkine and Illizi basinsFour discoveries were jointly made by Sonatrach and partners in the Berkine and Illizi basins.These discoveries are :

A gas discovery in the Berkine basin, well MZLS-2 (Menzel Ledjmet Sud-2), block 405-b, Ledjmet contractual area, in partnership with the Canadian company First Calgary Petroleum. The MZLS-2, in the clayey-sandstone lower Trias (Tagi) has produced 2006 cm/h of gas under a pressure of 499 PSI and a choke of 32/64”.

Two oil and gas discoveries, in partnership with Medex

North Africa Ltd, in the Illizi basin, wells GTTN-1 (Gara Tin Tamelra) and WHD-1 (West Ihansaten D-1) respectively located in the contractual areas of Erg Issaouane (blocks 226/229b) and Bourarhet (block 242). In the Devonian (F2), the GTTN-1 well has produced 2875 cm/h of gas under a pressure of 473 PSI and a choke of 32/64”.In the lower Devonian (F6-C3), the WHD-1 well has produced 3.46 cm/h of oil under a pressure of 30 PSI and a choke of 32/64”.

A gas discovery jointly made with Petroceltic International PLC in the Illizi basin, well HTT-2 (Hassi Tabtab-2) located in the contractual area of Isarene (blocks 228/229a). This well, in the Devonian reservoir (F2), has produced 7905 cm/h of gas under a pressure of 1141 PSI and a choke of 32/64”.

Two oil and condensate gas discoveries in the Berkine basinFurther to two drillings BRH-1 (Bhiret Hamou) and HTZ-3 (Hassi Touaiza-3) respectively located in Zettah (block 405c) and Zemoul El Kbar (block 403d), two new oil and condensate gas were made by Sonatrach alone. The BRH-1 drilling was 4920 m deep, with three potential reservoir levels, the clayey-sandstone lower Trias, the Carboniferous (Viseen) and the lower Devonian (Siegenien). The clayey-sandstone lower Trias (Tagi) has produced 10 cm/h of oil and 4137 cm/h of gas, under a well head pressure of 1420

PSI, and a choke of 32/64”. The Carboniferous (Viseen) has produced 18.27 cm/h of oil and 8636 cm/h of gas, under a well head pressure of 2555 PSI and a choke of 32/64”. The lower Devonian (Siegenien) has produced 6209 cm/h of gas and 1cm/h of condensate under a head pressure of 845 PSI and a choke of 32/64”. In the clayey-sandstone Trias reservoir (Tagi), the HTZ-3 drilling which was 3586 m deep, has produced 07.06 cm/h of oil and 709.3 cm/h of gas under a well head pressure of 1208 PSI and a choke of 32/64”. These two new discoveries are the first ones recorded by Sonatrach alone in 2007.

A gas discovery in the area of In SalahAfter the drilling of TCN-1bis (Tirechoumine nord-1bis), in the contractual area of Ahnet (block 340a), In Salah,

Sonatrach, alone, has made a gas discovery in April 22, 2007. This drilling was 2750 m deep in the Silurien. It has produced 4532 cm/h of gas in the Emsien, under a pressure of 500 PSI (choke of 32/64”) and 2705 cm/h of gas in the Siegenien, under a pressure of 450 PSI (choke of 32/64”).

14 New hydrocarbons discoveries since january 2007

A gas discovery jointly made with partners in TimimounIn May 9, 2007, Sonatrach has announced a gas discovery

jointly made with the consortium Total/Cepsa in the contractual area of Timimoun, south-western part of Algeria. The well Irharene Sud-1(IRS-1), 2730m deep in the Silurien has produced 3960 cm/h of gas in the lower Devonian.

Four hydrocarbons discoveries, two of which made by Sonatrach alone in Berkine and GouraraAs part of its exploration activities alone and with partners, Sonatrach has announced four new hydrocarbons discoveries in the Berkine and Gourara basins.Two of them were made by Sonatrach alone, after the drilling of MLSW-1 (Menzel Ledjmat South-west –1) and RHB-1 (Rhourde El Helba-1), respectively located in the contractual areas of Menzel Ledjmat (block 405a) and Zemoul El Kbar ( block 403d) in the Berkine basin.--The MLSW-1 drilling was 4383 m deep. From the Carboniferous, it has produced 3.70cm/h of condensate, 13 918 cm/h of gas, under a pressure of 2363 psi (a 32/64“ bean), and from the Devonian, 3929 cm/h of gas under a

pressure of 670 psi (a 32/64” bean). The RHB-1 drilling was 3620m deep, with a production

of oil of 9.14 cm/h from the Lower Clayey Trias (TAGI) and 8.27cm/h from the Devonian, under a pressure of 570 psi (a 32/64” bean).Two other discoveries were jointly made with partners after the drilling of BBKS-2 with Anadarko LLC/Eni/Merks, and HTJW-1 with Statoil.

The BBSK-2 well, in the Berkine - El Haiad contractual area (block 404a) was 3552 m deep, in the lower Clayey trias (TAGI), and a production of 6.7 cm/h of oil, under a pressure of 1000 psi ( a 24:64” bean).

The HTJW-1 well (Hassi Tidjerane West-1), in the Hassi Mouina contractual area ( blocks 317b, 319b and 322b) was 2535m deep in the Devonian (Slegenian) and has produced 11277 cm/h of gas under a pressure of 1578 psi (a 32/64” bean).

2�

GROUP nEWs

Two new hydrocarbons discoveries in Hassi Dzabat and Reggane Announcement by Sonatrach of two discoveries, a crude oil one made by Sonatrach alone and a gas one with partners.

The oil discovery, by Sonatrach alone, was made in the Amguid Messaoud basin, following the drilling of HKZ1 (Hassi Khebiza 1) in the contractual area of Hassi Dzabat (blocks 427 and 439), south of Hassi Messaoud. The drilling was 3677 m deep and has produced 6,10 cm of oil in the Ordovician (Hamra Quarts), under a pressure of 855 psi and a bean of 32/64.Considering the neighbouring fields already discovered

over the last years, this new result confirms the high potential of this new petroleum region. The gas discovery made in association with Repsol/RWE-DEA AG/ Edison International, after the deep drilling (5116m) of RG6 ( Reggane - 6) is located in the contractual area of Reggane North (blocks 351 & 352). For the first time in the area, this drilling has produced gas in the Ordovician reservoir.Together with the other reservoirs already discovered, this geological level will further increase gas prospects of this basin where significant exploration and appraisal works are being carried out. So far, fourteen (14) discoveries have been made by Sonatrach, this year, six (6) by Sonatrach alone and eight (8) with partners.

M. Mohamed Meziane in PeruM. Mohamed Meziane in Peru

March 28 to 30, 2007

M. Mohamed Meziane, Sonatrach C.E.O. visited Peru in March 28 to 30, 2007. This visit was made

to reinforce the presence of Sonatrach abroad. On this occasion, M. Meziane had exchanges with M. Cesar Gutierrez, Chief Executive Officer of the Peruvian oil company Petroperu, a partner of Sonatrach in various projects. M. Meziane wanted to assess progress made by the company in

Peru and at the same time take the opportunity to seek means and ways to develop partnering in the hydrocarbons sector.Discussions about ongoing investment projects of the company were held with Sonatrach officers in Peru as well as Peruvian partners who demonstrated a great interest in the reinforcement of partnering relationships between the two parties.

GROUP nEWs

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I n January 6, 2007, in Algiers, and in the presence of M. Chakib Khelil, Minister of energy and mine, Sonatrach and the Agence Nationale du Patrimoine Minier (ANPM) have signed the specifications documents related to the

mining exploration permits of the giant iron field of Gara Djebilet (Bechar). Reserves, discovered more than 40 years ago, are estimated to 4 billion tons of iron ore.

The joint-venture Sonatrach-First Calgary Petroleum Ltd (FCP) has announced the approval by ALNAFT of the development plan of Menzel Ledjmet-Est (MLE-block 405B) located in the Berkine basin. This development

plan includes the construction of a processing plant (CPF), a gathering system and removal lines. It provides for a production level of crude gas around 250 million cubic feet per day. The capacity of the plant could be extended to 400 million cubic feet per day, to take into account possible discoveries in the western part. Initial crude contractual reserves of MLE which are expected to be recovered amount to 1.3 trillion cubic feet gas equivalent (about 230 million barrels oil equivalent). The estimated total cost

for the development of the field, including the additional capacity of processing facilities and the extension of the gas gathering system ranges around 1.3 billion USD for a production scenario of 400 million cubic feet of gas per day. Development expenditures will be made over the period 2007 to 2009 and will be charged up to 75% to FCP and 25% to Sonatrach. The contract related to the initial design and engineering works (FEED) has recently been bidded for and should be awarded during the first semester of 2007. Sonatrach and FCP have recently signed a contract for the marketing of gas, pursuant to which Sonatrach will market the entire production of gas extracted from the contractual area 405b, on behalf of the joint-venture.

Sonatrach in the mining sector

Acquisition of mining exploration permits for the iron field of Gara Djebilet (Bechar)

ALNAFT Agency

Approval of the development plan of the field of Menzel Ledjmet-Est (MLE-block 405B), in the Berkine basin

Sonatrach - Itochu - Mitsui - Hyproc

Reception of methaner ship Medmax I baptised«Cheikh El Mokrani»

The first of the two MEDMAX I and II ships was built and will be exploited in partnership with NIPPON ITOCHU CORPORATION, MITSUI OSK LINES, SONATRACH and HYPROC Shipping Company.

Universal had been selected to build them and Calyon Bank to finance them.

The construction works of the MEDMAX I ship have been launched two and half years ago and the supervision of the works was entrusted to the MOL partner’s specialists and to those of Sonatrach’s subsidiary : the HYPROC Shipping Company.

At this occasion, Mr. Mohamed Meziane CEO of Sonatrach said :«... The ship Cheikh El Mokrani will be dedicated to Algerian LNG transportation between the two Mediterranean coasts.

It is meant to reinforce Sonatrach gas transport capacities and increase the flexibility of our LNG marketing strategy.

It will be exploited within the framework of a charter party signed between MLTC and SONATRACH joint venture.

This J.V, to whom we wish complete success, comes after a first joint subsidiary we have created three years ago with our Japanese friends. It has been a great success from a technical and

performance aspect, as well as operational and relational wise. It fully confirms that the option of a partnership as a development lever of Sonatrach activities on the hydrocarbons chain was right.

We have well combined Sonatrach competencies with those of MOL and ITOCHU, and our subsidiary HYPROC.

We are convinced to achieve the same success with the ship El Mokrani and MLTC Company, and we remain quite confident to count on more commitment from our partners with respect to the transfer of experience and the know how for a better success of this partnership...».

The Baker studies Institute, Texas, has published a comparative assessment study of national oil companies. This study indicates that some Arab ones, such as The Saoudi Aramco, have reached a world

level.

Other companies like Qatar petroleum have well developed in spite of the competition of majors in their countries, whereas the Koweit company has regressed over the last years because of the internal situation and its impact on the decision-making process.

Some occidental parties did try to reduce confidence in the capacity and capability of national oil companies to control new technologies. However, this attempt has failed and national oil companies have demonstrated their capacity to produce a maximum volume, over a long period of time if required, and to increase their production whenever allowed by reserves in place.

The main negative experiences in the region were essentially due to embargo and sanctions decided by the international arena, Irak and Lybia...

Equally to Sonatrach and Qatar Petroleum, the scope of activities of national oil companies (Aramco, the Koweiti company, Adnoc) has extended to the acquisition of refineries abroad and of interest-stakes in international projects. In Koweit, the national oil company has been a pioneer in oil and gas exploration and drilling outside Koweit.

Finally, the economic reforms process in some Arab countries and the emergence of Arab stock exchange institutions have led to the creation of participation companies specialized in the oil sector, such as Sabic Petrochemicals in Saoudi Arabia, Abar for oil investments in Abou Dhabi, Danagaz for gas exploration and marketing in Shariqa and Koweit Energy for exploration and drilling in Koweit.

According to world economic reports,

Sonatrach, this year, has reached very

positive results which put the company among the most

important oil ones in the world.

according to an american institute, Sonatrach is ranked among the most

important arab oil companies

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GROUP nEWs

3 mars 2007 - Consortium Sonatrach/Sonelgaz – Consortium Mubadal/Dubal (EAU)

This protocol agreement was signed in March 3, 2007 by the Algerian consortium Sonatrach-Sonelgaz and the Emirat consortium Mubadal-Dubal and provides for the development of an alum production plant in the new industrial zone of Beni saf.

The signing ceremony took place at Sonatrach headquarters in the presence of M. Chakib Khelil, Minister of Energy and Mine, M. Abdelhamid Temmar, Minister of Participations and Investments

Promotion, Sonatrach and Sonelgaz executives, as well as M. Al Mubarak Khaldoon Khalifa, C.E.O. of Mubadala Development Company and M. Abdullah Kalban, C.E.O. of Dubal.

The project is estimated at 5 billion USD, with 30% stake for the Algerian consortium (75% for Sonatrach and 25% for Sonelgaz). It is the most important direct foreign investment in our country. It will be implemented in an area 400 hectares large in Beni saf and will produce about 700 000 tons of aluminium per year which will mainly be dedicated to export. The aluminium foundry will have two plotlines using the “DX” optimal modern technology, a 2000 MW power generation station and a deep water quay for purposes of raw materials import and export of the end-product.

In the words of M. Mubarak Khaldoon, “The UAE and Algeria have always been keen to develop their relationships in the area and this new project will further reinforce our exceptional partnership. Mubadala is already investing in Algeria in projects related to electricity, oil and gas. I am delighted to see that the

In spite of being quite new in the foundry industry, Dubal is a driver in that sector, in the UAE. It is an important supplier of foundry alloy to the Far East automotive industry. It is a significant supplier of extrusion billet to construction markets and a recognized supplier of high quality primary aluminium in use in the electronic industry.

GENERAL INFORMATIONMain exploitation site (residential area), 480 ha of first pot put on stream • October 31 1979 : potline 4 is put on stream• October 1990 : potline 5 is put on stream • September 7 1996 : potline 6 is put on stream • May 31 1999 : potline 9 is put on stream • September 1 2003 : potline 7 is put on streamLABOUR3240 employees, among which 24% are expatriates.

Dubal in figures

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signing of a protocol agreement for the

exploitation of an alum mine in Beni-saf, for the

amount of5 billion dollars

UAE are still contributing to the implementation of facilities in the country and to economic development”. Talking about the impact of this alum plant, M. Mubarak said : “this investment is necessary to face the world increasing aluminium demand. Besides, due to the growing energy cost, old aluminium foundries are now obsolete and costly. Therefore ? this is a real opportunity to be seized by Algeria which can push investments in a sector bound to have an unlimited growth in the future”.

M. Abdullah Kalban, Dubal C.E.O. talked about the expertise which his company can provide to achieve a successful project : “over more than 25 years, Dubal has been more and

more successful in the production of aluminium. We have developed our own technology, DX, which will be used at the foundry of Beni Saf, and Dubal will provide the required technical support and resources for the guarantee of its success. We will make sure that state of art technologies will be applied at each step of the project, in accordance with the highest environmental standards”. The pre-feasibility study has been completed.The detailed feasibility study will be started shortly and will include an impact social and environmental survey. Great attention will be given to the implementation of the best applications during the design, construction and operations phases.

Mubadala Development Company is an investment company 100% held by the government of Abu Dhabi Emirate. It was created in October 2002. It is a state-owned company, incorporated pursuant to the decree no 12/2002 issued by the the royal prince of Abu Dhabi. Its activity is mainly to set up new companies and to acquire strategic interest stakes in the existing ones, both in the UAE and abroad. Mubadala is specialized in the creation of added

value, on the basis of a strict selection of business companies and in partnership with local, regional and international investors. Mubadala invests in strategic sectors ranging from energy to utilities, real estate, state and private associations, base industries and services. Its objective is to diversify and develop the growing industry of Abu Dhabi, while generating substantial returns on its investments.

Mubadala in brief

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Purpose : The construction of an industrial aluminium production plant

Location : Beni Saf (Ain Temouchent) Algeria

Promoters of the project :

• DUBAL and MUBADALA (United Arab Emirates)

• SONATRACH and SONELGAZ (Algeria)

Scope of the project :

• A primary aluminium production unit of 700 000 tons per year

• A combined cycle thermic power generation station with a capacity of 2000 MW, coupled with a sea water desalination unit,

• A harbour with a receiving capacity of 1 750 000 tons per year.

Applied Process : electrolysis based on the Hall-Heroult process

Technology : DX of DUBAL

Structure of the project : Partnership between Dubal/Mubadala and Sonatrach/Sonelgaz

Setting up of the project companies (JVP&JVC) :

Once the feasibility study is completed :

• Creation by Sonatrach, Sonelgaz and Dubal/mubadala of the Aluminium Production Company which will be in charge of :

• Constructing the plant

• Operating the plant, either by its own means or by means of an intermediate Operations and Maintenance Operator

• Selling aluminium to the marketing company

• Creation by SONATRACH, DUBAL and MUBADALA of a Marketing Company in charge of selling aluminium.

Development phases of the project :

• Pre-feasibility study (completed)

• Term : 05 months

• Start up date : August 1, 2006

• August 1, 2006 : December 31, 2006

• Signing of the Protocol Agreement for the implementation of the project : March 3, 2007

• Term assigned to the feasibility study and the execution of contracts : 17 months

• Funds structuring :

• Timing : 20 months

• Construction :

• Timing : 33 months

Financing :

• Undertaken as a “project financing”

Benefits for Algeria :

• Creation of jobs :

10 000 employees at the highest step of the construction phase,

• Opportunities for new industries in the downstream processing sector

• Experience gained in the aluminium industry and its marketing in international markets

• economic development in the wilaya of Ain temouchent

TEChniCAL ChArT

ThE BEni SAf ALUMiniUM projECT

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Dubal is one of the most important producer of aluminium in the world and Mubadala a great investment company. Both of them are owned by the government of Abu Dhabi Emirate. In February 11, 2007 they entered into a joint-venture for the development of aluminium in the Emirates (EMAL). This joint-venture agreement contemplates the construction and the operating of a world class aluminium

foundry. The financing is structured in two phases : 5 billion USD for the first phase and about 3 billion USD for the second phase . The total production capacity amounts to 1.4 million tons per year to be delivered to the port of Khalifa and the industrial zone of Abu Dhabi. This joint-venture will turn them into the largest aluminium founder in the world.

Over a surface of 61.30 square km, the territory of Beni Saf includes the agricultural areas of El Bradj, Rachgoun and Ouled Boudjemaâ in which 92% of the population are concentrated. With the exception of its eastern part, the administrative boundaries of this region are limited by :

• The Mediterranean Sea in the north • The Sbaâ Chioukh mountains in the south • The Tafna river in the west • The river of Sidi Ahmed (confluent of the Sidi Djelloul river) represents the eastern boundary.

Historic record of theMubadala-Dubal joint-venture

Beni Saf in brief

Description of the harbour of Beni Saf

Basin acreage : 17 hectares. The harbour was built in an old lagoon, at the junction of the rivers Ahmed and Boukourdan. It is located at the bottom of a very wide bay between the island of Rachgoun and the cape of Figalo.

The piers : the western pier is 875 m long and bends at right angle. The eastern pier is 300 m long and is used business operations. The entry pass between the two piers is 160 m long. Given its privileged geographical situation, this harbour is an important fishing centre, both in terms of sea fauna as well numbers of ships.

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This Engineering Procurement & Construction contract (EPC), for the construction of three LPG separation trains in Arzew, was signed in April 22, 2007, in Algiers, by Sonatrach Downstream Activity and the Japanese group IHI- ITOCHU.

The ceremony was attended by his Excellency the Ambassador of Japan, the President of IHI operations and environment, the Vice-President of Itochu, the Secretary General of the Ministry of Energy and Mine, Sonatrach Chief Executive Officer, Sonatrach

downstream Vice-President, as well as executive managers of Sonatrach. With an investment of 1 billion 099 million USD, the contract provides for the construction of three LPG separation trains, each one with a capacity of 1 million metric tons per year, and two low temperature storage tanks, each one with a capacity of 70 000 cm. With a total capacity of three million metric tons per year of commercial propane and butane, these trains which will be integrated to GP1/Z will be supplied from the LPG terminal of Bethioua.

In his address, Sonatrach C.E.O. talked about the good partnership relations between Sonatrach and the Japanese group IHI-Itochu and underlined the scope of this contract : “these new trains will enable us to reach very high levels in our LPG total production, 10 million tons per year by 2010. This will considerably reinforce the position of Sonatrach as world LPG leader, and will help acquiring new shares of the market”. The quality of the partnership with the Japanese group was also referred to by M. Abdelhafid Feghouli, downstream Vice-President, who said : “Our partnership is strongly involved in various joint projects, such as for example, the construction of two boilers at GL1/Z and GL12/Z in Arzew, and the revamping project of GP2/Z in Arzew”. Those are projects which will help consolidating our position in a more and more difficult LPG world market. “Sonatrach is planning to increase its production

capacity to be up to international competition. 50% of the 1.5 billion USD allocated by Sonatrach to its mid-term HSE programme are dedicated to the revamping and reliable use of units of the group”.

In his address, M. Sumitaka Fujita, Vice-President and Chairman of Itochu also stressed on the intense partnership with Sonatrach and said : “Algeria, Sonatrach and Itochu share the same strategy which aims at developing a strong long-term partnership based on risk and profit sharing. It is on this basis that Itochu got involved in the development of the Ohanet field and has set up joint companies between Sonatrach Hyproc and the Japanese Mol for the acquisition and the operating of gas tankers”. M. Mitsui Maruyama, President for Environment and Operations of IHI, reminded everyone of the long existing partnership between IHI and Sonatrach and said : “IHI has been involved with Sonatrach since the seventies in the LPG complex of Arzew and Skikda, particularly phases 1 and 2 of the LPG Jumbo, and in the sea water desalination project which was entered into last year with Kahrama. This, as you see, shows the great satisfaction we are having in our participation to this new project”.

The provisional reception of works is expected September 2010.

Construction of three new LpG trains in Arzew

Signing ceremony Sonatrach/ihi/iToChU

Technical information about the project

Purpose : Construction of three (3) new identical LPG separation trains, with a unit capacity of 1.0 MTA, and the construction of two (2) low temperature products storing tanks with a capacity of 70 000 cm for each one of them.

Production capacity : Three million metric tons per year (3.0 MTA) of commercial propane and butane.

Location : trains integrated to the GP1/Z complex.

Feedstock : A mixture of various LPG from the LPG terminal of Betioua.

Financial source : Sonatrach equity.

Contract signature date : April 22, 2007

Provisional effective date of the contract : June 2007.

Provisional reception date of the first part : February 2010.

Provisional reception date of the first part : March 2010.

Provisional reception date of the first part : April 2010.

(Provisional) reception date of works : September 2010.

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In April 11, 2007, Sonatrach, on the one hand, and the Portuguese participation holding Parpublica Participaçoes publicas, SGPS, SA,

as well as the Portuguese deposit bank Caixa Geral De Depositos, SA, on the other hand, have signed a shareholding agreement on the basis of which

Sonatrach will have a seat within the General Surveillance Counsel of the Portuguese energy group “Energia de Portugal” (EDP). Sonatrach has announced the acquisition, in the Portuguese stock market, of an interest-stake of 2.05% in the capital of EDP Groups. For the first time Sonatrach

becomes a shareholder in a European energy company and holds 74000 shares. This acquisition was successfully completed in March 26, 2007. Other acquisitions in the capital of downstream companies are also planned.

Signing of a shareholders agreement

Sonatrach - parpublica participaçoes publicas, SGpS, SA-Caixa Geral De Depositos, SA (portugal)

In April 11, 2007, a Memorandum of Understanding was signed by Sonatrach and the energy Portuguese group Energias de

Portugal (EDP SA) for the setting up of a strategic partnership in the fields of natural gas and electricity in the Iberia Peninsula.

This strategic partnership is based on the following objectives :

- A maximum contractual volume of 2 billion cm of natural gas supplied by sonatrach to EDP, most of which to be dedicated to joint projects undertaken by Sonatrach and EDP.

- The setting up of a natural gas Marketing Joint-Venture (50%-50%)

- Up to 25% participation of Sonatrach in the investments related to power generation stations of CCGT and EDP

in Spain and Portugal and which will be supplied with Algerian gas. The purpose of this partnership is also to develop new opportunities in the gas Mid-Stream. By July 31, 2007, Sonatrach and EDP should be completing the negotiation of contracts required for the implementation of said strategic partnership which will enable Sonatrach to make a long step forward its international activities.

Signing of a Memorandum of UnderstandingSonatrach - Energias de portugal (EDp S.A)

These two contracts were signed in January 6, 2007. The first one by Sonatrach (35%), Goldim (subsidiary of the

Algerian mining and geological research office : ORGM (14%) and the Chinese partner Shaolin (51%). They relate to the exploration and development

of the zinc-lead contractual areas of Boukhdema, kef Semmah and Ain Sedjra, wilaya of Setif. The second one (2 million USD) signed by Sonatrach (35%), Goldim (12%) and Shaolin (53%) provides for the exploration and development of gold-bearing contractual areas of Isselfene South 1, Isselfene South 2, Seldrar and

Idereski, wilaya of Tamanrasset. These contracts represent a real guarantee for investors and will give Sonatrach the possibility to be active in the mining sector and increase its portfolio of activities, beyond hydrocarbons.

Signing of two partnership contracts related to exploration of gold-bearing and zinc-lead fields

in Setif and Tamanrasset

Sonatrach - Golden - Shaolin

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Sonatrach-petrobras (Brazil)

Signing of a Memorandum of Understanding(MoU) and an umbrella agreement for

LnG spot purchase/sale

At Sonatrach headquarters, May 26, 2007, and in the presence of Dr Chakib Khelil, Minister of Energy and Mines, M. Mohamed Meziane, Sonatrach C.E.O. and M. Jose Sergio

Gabrielli de Azavedo, Petrobras C.E.O. have signed a Memorandum of Understanding to extend cooperation to several energy aspects as well as an umbrella agreement for the supply of Algerian LNG to Brazil.

The MOU includes research and exploitation of liquid and gaseous hydrocarbons, onshore and offshore, refining, petrochemicals and training. The umbrella agreement contemplates the sale of Algerian LNG to the Brazilian market.

Pursuant to this agreement, Petrobras envisages to start importing LNG in 2008, by means of two floating regazeification terminal projects (FSRU) which will be located in Guanabara (Rio de Janeiro) and Pecem (Ceara), and essentially dedicated to power generation. The LNG umbrella agreement was signed by M. Chawki Rahal Sonatrach Marketing Vice-president and M. Ildo Luis Sauer, Petrobras energy and gas Manager.

After the signing ceremony, Dr Khelil said that “this MOU sets the scope of the relationships in any field connected with energy, development, exploration, marketing, whether in Algeria or in Brazil... More than other world companies, Petrobras has a great experience in offshore activities as well as an advanced technology”. The Minister did point out that “most of the future projects will be carried out in deep seas, whereas onshore fields are extensively exploited by oil companies including Sonatrach. Given that, several companies will now turn to offshore fields”. The Minister did also underline the fact that Sonatrach and Petrobras are complementary to one another. Whereas Sonatrach expertise is more oriented towards onshore fields, gas and LNG marketing,

Petrobras has an offshore experience worldwide. “It is active in 300 offshore blocks in the Gulf of Mexico, to such an extend that major companies in the world wish to take advantage of the experience it has developed”. Therefore, in the view of the Minister, “the objective is to share experiences in order to undertake operations in Brazil, Algeria or any other country. In addition to that, marketing oil, petroleum products and gas could be another opportunity to seize”.

According to M. Mohamed Meziane, Sonatrach C.E.O. “this agreement will enable Sonatrach to diversify its LNG sales and to take advantage of all market opportunities, particularly in the Atlantic basin. The target of these two agreements is to set the bases of a productive partnership in the two countries and elsewhere in the world, in line with the two groups respective interests and strategies”.

Sonatrach C.E.O. has also talked about its company’s long presence in hydrocarbons international markets and its rich parnership relations with major international companies and stressed on the fact that “these

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Sonatrach-Consortium Saipem & Lead Contracting

Signing of a contract for the construction

of the crude oil processing unit

UBTS,hassi Messaoud

I n May 27, 2007 in Algiers and in the presence of M. Mohamed Meziane, Sonatrach C.E.O., Sonatrach and the Consortium of Saipem and Lead Contracting have signed a contract for the construction of the Crude Oil

Processing and Stabilization unit (UBTS) in Hassi Messaoud. The UBTS to be constructed in a period of 37 months includes a stabilization unit with three (3) trains, each one with production a capacity of 100 000 b/d, a maintenance unit, four (4) storage tanks with a respective capacity of 50 000 cm, a 45 km pipeline for the removal of oil, water and gas. The purpose of the project is to improve the crude oil quality, to secure installations and increase the production. With this construction, Sonatrach maintains its objective to optimise the development of Hassi Messaoud, and better take into account the considerable volume of its reserves, the quality of its hydrocarbons and the complexity of its reservoirs. In his address, M. Mohamed Meziane said : “The contract we are signing today enables us to pursue our objective to optimise the development of Hassi Messaoud which is our

most important field. Indeed, we pay great attention to the evolution of this field and our target is to put in place all conditions to develop its potential and reach our mid-term production objectives while bearing in mind a long-term perspective”. “This field has been exploited for half a century and yet it is still young. It accounts for about 30% of the crude oil national production and more than 60% of Sonatrach production”. As for the selection of the Group lead by Saipem for the project, Sonatrach C.E.O. said : “We are familiar with Saipem and its worldwide credited technological references. It is already present in Algeria for several projects with the Algerian hydrocarbons industry, Sonatrach and our partners who have quite often appreciated its contribution and its managerial and technical capacity in several construction works, particularly hydrocarbons installations and transport”.

Once operational, the UTBS unit will improve the crude oil quality, will secure installations and will increase production in the oil area of Hassi Messaoud.

profitable aspects will be in favour of the cooperation Sonatrach wants to commit to and develop with Petrobras”.

Petrobras C.E.O. referred to Sonatrach as “an important partner” and declared that the agreements signed “will open up other cooperation opportunities between the two companies”.

In his opinion, “Algeria needs to benefit by the offshore technological experience” which Brazil has developed

and reminded that Petrobras is already active in fields located in Turkey and Portugal.

According to M. Gabrielli, Petrobras is the second oil company in latin America and the 14th one in the world. It produces 2.3 million barrels of oil per year and has a refining capacity of 2 million barrels per day.

Besides, Petrobras is planning to invest 87 billion dollars by 2010 all over the world. In 2006, it has reached a cash flow of 140 billion dollars.

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Sonatrach - orascom Construction industries

Signing of the by-laws of “SorfErT”

In June 10, 2007, in Algiers, Sonatrach and the Egyptian Group Orascom Construction Constructions (OCI) have signed the by-laws of the company in charge of constructing and operating the future urea and ammoniac complex of Arzew. These by-laws

were initialled by M. Abdelhafid Feghouli, Sonatrach Downstream Vice-president and M. Oussama Bishai, General Manager of Orascom Construction Industries. After the signing ceremony, the first meeting of the Board of Directors was held and M. Oussama Bishai was designated as Chief Executive Officer of SORFERT. As a reminder, this complex , over an acreage of 33.73 hectares, is located in the industrial zone of Arzew. Its natural gas supplies are up to 02 billion cm/year. It includes three modules, two for the production of ammonia with a respective capacity of 2000t/y, 50% of which used for the production of urea. The third module with a capacity of 3250 t/y is exclusively dedicated to the production of urea.

This convention was signed by Sipex in Bamako, February 9, 2007.

It was signed by M. Ahmed Diane Semega, Minister of Energy and Water of Mali and M. Mohamed Benhamou, Executive Manager in charge of

Sonatrach International Activities, in the presence of the Malian Minister in charge of investments promotion and small and medium companies. Sipex, a subsidiary of

Sonatrach for international exploration and development projects, undertakes to carry out geological and geophysical works over an initial period of time of four (4) years and to drill a well, for a minimum amount of 11.6 million USD. Block 20 with a total acreage of 118 000 square km, is located in the Taoudenni basin, neighbouring the Algerian border where Sonatrach is already operator under a prospection contract in the contractual

area of Chenachene. This new acquisition, added to other participations of Sipex, particularly in Mali with ENI and Baraka in blocks 1,2,3,4 & 9 (up to 25% for Sipex), and in Niger in the kafra contractual area (Sipex 100%), as well as other maturing projects in Niger and Mauritania, enable Sonatrach to confirm its active role in the Sahel region.

Signing of a concession convention for hydrocarbons exploration and exploitation in block

20 of the Taoudenni basin, Mali

Sonatrach international petroleum Exploration & production (Sipex)

The delivery schedule of these planes is expected to start in June 2008, one plane per month, and to be completed in September of the same year. These new acquisitions will reinforce the fleet

of Tassili Airlines, in charge of transporting personnel of production units located deep south. It should be recalled that Sonatrach has already committed for 4 Q400 planes (70 seats) with the same manufacturer and their delivery is expected in July 2007. Tassili Airlines will then have a new, modern and homogeneous fleet which will help contributing in the development of the national air transport.

A contract for the acquisition of 4 aeroplanesTassili - Bombardier (Canada)

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The document bearing shareholding agreement for the setting up of the company “Sorfert” in charge of constructing and operating

the future ammonia and urea complex of Arzew was executed in March 19, 2007 in Oran, by Sonatrach and the Egyptian group OCI (Orascom Construction Industries) in the presence of M. Chakib Khelil Minister of Energy and Mine. The agreement contemplates the creation of two joint-companies, “Sorfert Algerie” in charge of constructing, developing and

managing a chemical fertilizers plant. This plant, over a surface of 33.73 hectares, will have three modules in which two for an ammonia production capacity of 2000 t/d, and one for a urea production capacity of 3250 t/d. The other company, object of the agreement, “Sorfert marketing” will be in charge of exporting and marketing end products in the international market. The protocol agreement which was initialled by M. Abdelhafid Feghouli, downstream Vice-President, and M. Oussama Bishai, OCI Chief Executive Officer, will allow to turn the project

into reality and to create 700 permanent jobs. In the words of M. Meziane “it is one more step towards the materialization of the huge petrochemical programme decided about by Sonatrach”. M. Chakib Khelil considered that “the setting up of “Sofert Algerie” and “Sofert Marketing” is in line with the global strategy to combine national investments and foreign direct investments for a better determining growth factor, and this approach has been successful so far”.

Signing of a partnership agreement between Sonatrach and orascom Construction Industries

March 19, 2007

Creation of the joint-companies“Sorfert Algerie” and “Sorfert Marketing”

Sonatrach and the Company Kellogg Brown and Root (KBR) proceeded saturdays July 7, 2007, in Algiers, with the signing of a

contract EPC for the realization of the project «new LNG train at Skikda». The ceremony of signature of the contract proceeded in the presence of Mr. Chakib Khelil, Ministre for Energy and the Mines and Mr. Bill Utt, Chairman and managing Director of KBR. The contract was signed by Mr. John Pink Vice-Président Executive of Kellogg Brown and Root (KBR) and

Mr Abdelhafid Feghouli Vice - President Activité Downstream of Sonatrach. Financed by Sonatrach by its own capital stocks, the new LNG train of Skikda will have an output of 4.5 million tons of LNG/year. It will be carried out in 50 months on the industrial park of Skikda, and will employ 500 people in production. Supplied by gas coming from Hassi R’Mel, the Train will produce annually more than 4.5 metric tons of LNG/year, 164 700 ton million of Ethane, 207 600 ton of Propane, 171 400 ton of Butane, 108 700 Gasol ine and

163 100 000 (Nm3/an) of gas enriched with Helium. The contract will also include/understand the realization of facilities of storages integrated into the existing factory GL1.K, of a capacity of 150 000 m3 LNG, 66 000 m3 of Butane, 66 000 m3 Propane and a gasoline sphere of 3 000 m3. This important project, will consolidate the role of Sonatrach in national and international as a strategic link of the chains of valorization of hydrocarbons and will give an additional strenth to the maitrise technologies of LNG.

Signing of a EpC contract for realization of a new LnG train at Skikda with a capacity of 4.5 millions tons LnG/Year

Sonatrach - Kellogg Brown and root (KBr)

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Reducing greenhouse gases which cause climate warming is a priority for Sonatrach. Fully aware of its responsibilities as a citizen caring company, Sonatrach is continuously undertaking actions and implementing procedures meant to control the whole process of gas emissions likely to damage the environment.1. Reduction of greenhouse gas

Faced with the severe negative impact of greenhouse emissions on the environment, Sonatrach has greatly invested in the recovery of

flared gas upstream (production fields) and downstream (liquefaction plants, refineries).

The collecting network in oil fields as well as the revamping of upstream facilities are being carried out in compliance with strict universally acceptable standards. Since 1973, Sonatrach has undertaken 32 projects which have allowed to recover 93% of gas which was previously flared. Even if the production of associated gas has substantially increased over the last thirty three years, with a volume of 41.32 billion cm, the ratio flared associated gas-gas produced went from 80% in 1970 to 7% in 2005. Besides, for safety reasons and to protect the environment, flaring networks are renewed and rehabilitated on a regular basis, and great attention is given to the separation of liquids contained in flared gas. New technologies aimed at improving combustion and reducing impact on the environment are also used by Sonatrach.

These reduction efforts will continue over

the next years. Several projects with a total investment of 220 million dollars will be undertaken by the end of 2007, so as to reach less than 7% of gas flared and none by 2010.

2. CO2 sequestration 2.1. In Salah Gaz projectIn parallel to the reduction of greenhouse gas, Sonatrach encourages the development of projects related to CO2 trapping and storing, as means to be used for greenhouse gas emissions reduction. To this end, great attention is given to the project of In Salah Gaz by Sonatrach/BP-Statoil. This project which started in 2004 allows to recover about 1.2 million tons per year of CO2, that is 20 million tons for the whole duration of the field exploitation. The reinjection of CO2 (17 million tons) has reduced polluting emissions by more than 60%, and that equals the withdrawal from traffic of 250 000 vehicules.

2.2. Reinjection of CO2 in the integrated project of Gassi Touil CO2 sequestration consists in reinjecting escaped carbon gases in wells . To eliminate 10 million cm of CO2 bearing gas produced in the quartz reservoirs of Hamra, a feasibility study is being elaborated for the reinjection of 660 000cm/d which would be extracted. Reservoirs planned for the reinjection are those of TAGS (clayey trias) of Gassi Touil and the marginal reservoir of Hassi Touareg. The purpose of

these projects, just like the ones referred to above, is to allow Sonatrach to be able, in a near future, to secure a significant reduction level of greenhouse emissions, to guarantee a maximum reliability in its production fields and to perverse the environment in compliance with international standards in force.

Sonatrach adheres to the “GGFR”In 2002, Sonatrach joined the GGFR, “Global Gas Flaring Reduction”, a body the purpose of which is to assist governments and oil companies to reduce flaring and emissions of gases, particularly those associated with oil extraction. In this project, Sonatrach is partner with the World Bank, Shell, BP, Chevron Texaco, Exxon Mobil, Norsk Hydro, Statoil, Total and SNH of Cameroun. Governments and national oil companies involved include those of Equator, Nigeria, Norway, Angola, Canada, Indonesia, Great Britain, France, Tchad, Equatorial Guinea, and the European Union.

This partnership aims at encouraging investments for gas flaring reduction, to improve access to international markets, and to provide technical assistance to the use of flared gas as fuel.

reduction of flared gasesA priority for Sonatrach

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From Algeo to ENAGEO

ENAGEO had a long history which changed in 2005 when it was totally acquired by Sonatrach. At its creation in 1967, ENAGEO was denominated “Algeo” and was a subsidiary of the joint-venture Sonatrach/

Teledyne. In 1981, the year of the restructuring process of state companies, this company was first turned into DTP-SH-ORG and then incorporated with the denomination of ENAGEO, under the supervision of the Ministry of Energy and Mines. In 1989, ENAGEO was granted the status of an autonomous company and remained as such until 1995 when Sonatrach acquired 51% of its capital. In 2005, Sonatrach bought back the remaining 49% and ENAGEO became a 100% held subsidiary of Sonatrach, with a capital estimated to 3.4 billion DA and a cash flowl of 10.7 billion DA in 2006.

A specific core business

The main activity of ENAGEO, 91% of its cash flow, is to carry out seismic acquisition for oil companies. In addition, 7% of the cash flow of the company are generated by seismic processing, water drilling and topography, whereas 2% are generated by well seismic, gravimetry, electrical prospection and geothermy. The company employs about 4000 workers, in which 500 engineers and technicians.

Modern and reliable equipment

This year, ENAGEO is in charge of 12 seismic field works, 5 of them in 2D and 7 in 3D. For each field work ENAGEO uses a specific high technology equipment (recording laboratory, vibrators, DGPS), some fifty track vehicles (direct support to production) as well as lodging means. For the recording ENAGEO has four most recent types of laboratories :

• One (1) I/O System IV (1000 canals)

• Five (5) Sercel 408 CMXL (6000 canals)

• One (1) I/O Image system (3000 canals)

• Four (4) I/O System II (1000 canals).

The vibration equipment consists in four (4) types of vibrator tracks including 44 Sercel M26, 25 I/O AHIII, 50 Sercel Nomad and 12 Mertz M26.

An acknowledged service quality

Since 1989, ENAGEO has provided services to more than 40 partners of Sonatrach in Algeria, among which AGIP, ANADARKO, BP, JNOC, LOUISIANA, MOBIL, ORYX, PETROCANADA, REPSOL, TOTAL and MEDEXAL. Abroad, ENAGEO is active on behalf of AGIP, CHO and SITEP in Tunisia, and HUNT in Niger. In order to secure its development, ENAGEO carefully looks after the renewal of its production tool (more than 2 billion DA per year), the control of new techniques and their application to research, in accordance with quality standards in use in the oil industry and HSE, while anticipating on its clients expectations and guaranteeing the service rendered.

Compliance with standards and procedures

Pursuant to international standards, ENAGEO has integrated an HSE management system since 1996. The implementation of this system translated into the training of its personnel, the designation of an HSE engineer, a doctor and the allocation of

EnAGEo

ENAGEO, the geophysical state company is clearly one of the most active company in the oil sector. With activities carried out above the upstream, it is in the first line of the long process of hydrocarbons development. Its technicians, the first link in the whole chain, define the boundaries of contractual areas for purposes of drilling works, on the basis of seismic acquisition techniques in which they excel.

Above the Upstream

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an ambulance in each one of its working sites, as well as the equipping of all tracks with protection means (drive right, roll bar, VHF radio... etc). In addition, ENAGEO has launched three management projects, and the first one, certified QHSE : ISO 9001, 14001 and OHSAS 18001, was awarded in 2006. The two other projects, which are the ABC method for the reduction of costs per activity, and the management and training integrated system, ERP, are being applied to all structures within ENAGEO.

Results in constant progress

In a context of open market, services rendered by the company on behalf and for Sonatrach partners, together with activities carried out abroad, have generated significant amounts in dinars and foreign currencies which have made possible the continuous renewal of production equipment, the implementation of a dynamic technological progress, a greater use of the best practices and international standards, particularly the HSE ones, as well as the setting up of mega 3D missions with more important added value, technically and financially wise .

A performing and diversified partnership

Partnering is particularly important for ENAGEO. The company is negotiating with the French giant in the sector, CGG, for the setting up of a 3D mission and a joint project for the new processing centre of Boumerdes. Negotiations are also held with the Chinese group SINOPEC for the setting up of a 2D mission, and discussions with the American company OGDC are well advanced for the renewal of the seismic processing centre of Ouled Fayet. It should be pointed out as well that the French group CGG is interested in getting an interest-stake in the capital of ENAGEO. These are positive elements which have enabled ENAGEO to reach a cash flow average growth rate of 4.6%, distinctively of the cash flow expected from activities with partners.

Seismic acquisition

Seismic acquisition consists in generating movements at the soil surface level by means of a vibrator or an explosive, in recording signals from depths, using geophones and a numeric laboratory, as well as processing data for imaging processes. Seismic activities allow to have an image of kilometres deep sub-soil geological discontinuities. They also allow to increase the rate of success of exploration drillings, to identify and better manage new reservoirs. Seismic processing aims at analysing the collected data for the best possible image of the sub-soil. This step requires to have powerful computers and a performing software. To this end, ENAGEO has put in place a computing centre in Ouled Fayet (Algiers) equipped with 2D and 3D seismic processing tools, and has just opened up another more efficient one in Boumerdes.

2D and 3D seismic

Undertaking 2D missions requires 210 agents , among which 40 specialized ones, and a seismic base providing housing, food and appropriate well-being to all members of the team. It also requires one (1) telemetric laboratory, five (5) seismic vibrators, fifteen (15) heavy tracks, twenty (20) light tracks, two (2) seismic drills, two (2) bulldozers, 4500 clusters of 12 geophones, as well as all support and material for the maintenance of this equipment. The total cost exceeds 14 million US dollars. This amount could be above 18 in the case of a 3D mission which requires 310 agents with 55 specialized members, and the addition of five (5) seismic vibrators, three (3) bulldozers, five (5) heavy tracks, ten (10) light tracks and 2000 clusters of 12 geophones . It should be noted that a 2D mission is active 10 months per year and a 3D one 9 months per year.

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What can you say about ENAGEO today ?I would say that ENAGEO is perfectly adapted to the numerous changes which our sector has gone through over the last years. Our company is 40 years old and has developed a very precious expertise which our employees have assimilated and efficiently applied to their activities. It should be recalled that we are a leader in seismic acquisition in Algeria. This means that we are familiar with our activities and the techniques we use. After quite a number of changes of situations, ENAGEO ended up by being a 100 % part of Sonatrach in 2005, and Sonatrach is indeed its first client. With more than 4000 employees, our company is going through a significant development. We are ranked among the first companies creating jobs and particularly in geophysical and engineering techniques. As an example, not less than 400 young graduates have been recruited in 2005/2006 and our annual investment rate ranges around 30%.

What are the specific constraints faced by ENAGEO in its activities ?Seismic acquisition, which is our main activity, requires huge means, whether material or human. As a consequence of that, costs are high and we have to be very careful, in an environment where foreign competition is a reality. This is why ENAGEO has put in place a modern management system of its work force and means in order to secure the best service to its clients. Our priority is to reach a multidiscipline levelling, which implies more investments and particularly in the renewal of technologies, the acquisition of new material, specialized training and hiring of engineers. In addition to these unavoidable constraints, we have to keep a close eye on how to motivate our employees and prevent the company from loosing their capabilities.

What you refer to as “mission” is in fact the core business of your company. Can you elaborate on that ? Indeed, the most important aspect of our activity is to carry out seismic prospection for our clients. The mission is two fold : a 2D one which consists in prospecting in two dimensions, and a 3D one, in three dimensions. The implementation of a mission requires significant technical and human means. We put in place temporary bases where, over a period of 9 to 10 months, teams prospect an area the surface of which depends on the available data. Everything must be worked out in an optimal way and the most rigorous measures are taken to secure the working site and to provide the most reliable equipment. The client is entitled to have its own supervisors on the spot. Men, and also women today, in the mission work hard in isolation and often very severe climate conditions. At the end of the mission, when vibrators have covered all delimited areas, the requested for geophysical data, once they are processed in our computing centres, are delivered to the partner. Currently, ENAGEO has 12 operational missions throughout all the prospection zones in the country.

Which measures have been taken to modernize the organization and operations of ENAGEO ? There cannot be any miracle. It is our specialization in seismic acquisition which has, quite early, urged us to keep our material

and techniques up to date with the most recent innovations and technologies. We have acquired a I/O System IV type laboratory with 1000 canals, the best one in the market, as well as 5 Sercel 408 CMXL type laboratories at 6000 canals. With respect to training, we have worked out a training plan for our technicians and engineers, and the training can take place in the USA and any country offering appropriate training in our sector. To give an example, our global investment was 17 billion dinars in 2006 and will reach 20 billion dinars by the end of 2007. In terms of compliance with regulations relating to safety and environment, ENAGEO has been granted the following QHSE certifications : ISO 9001, 14001, OHSAS 1800. In addition, the integrated management and training system ERP is being implemented to all the structures of the company. I am convinced that all these measures will give ENAGEO the capacity to remain leader in the geophysical activities in Algeria.

What are your projects for the years to come ?Similarly to the parent company Sonatrach, we are involved in a more and more competitive market, and particularly the Asian one. Challenges to be up to are clear: acquiring more market in our country but also abroad, such as the ones in Tunisia and Niger. We have to investigate any partnering opportunity, including international ones , and we have to do it in a global context of standards and procedures. To this effect, ENAGEO must adapt to the demands of its clients, while keeping in mind the levelling of its capacities and techniques. Our know how is today acknowledged by our partners and we are confident in the future.

We are discussing an important joint project with the group CGG-Veritas, the world leader in the sector, second after the American giant Western. We hope to start a new seismic team with this project quite soon. We are also under negotiation with the Italian ENI for a prospection project in Mali, and before the end of 2007, we will be present in Niger for a project commissioned by Sonatrach. In my view, ENAGEO is quite capable to be up to the challenges it is confronted with. Our work force, about 25 years old, has cumulated a long and useful experience and, provided we continue to update our knowledge and our expertise, ENAGEO will be able to remain the leader in this sector.

Interview by M. Aoumer Lassal, Chief Executive Officer of ENAGEO

“Experience and know how, those are our winning assets”

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About 60 kms from Hassi Messaoud, on the way to the EL Gassi field, the EGS-180 camp is a 3D seismic acquisition mission which is undertaken for the account of the Exploration Division of

Sonatrach Upstream Activity. 310 persons, including two representatives of the client, share this camp. The purpose of the mission is to prospect an area of 50 square kilometres in the desert, by means of ten (10) vibrator tracks and a seismic processing station. Works start at early as 5h30 when teams in charge of collecting data have to leave, with vibrators, an automotive laboratory, bulldozers, topographers, safety personnel and 4 vehicles equipped with GPS systems. Once on the site, bulldozers start ramming the soil to be prospected by topographers. There are two topographers, one carrying the twenty kilos satellite recorder which identifies where to position the wood pickets carried by the second topographer. This one, at each signal, lays a picket which bears a code assigned to the designated location. The two topographers have to do this under the heat and over large distances. Once the pickets are laid, they are interconnected with special cables which will be used to collect seismic data and send them to the automotive laboratory. Then, vibrator tracks, four of them, drive across each delimited perimeter, and the vibrators which are the huge steel plates under their base frames, are simultaneously brought down to the soil where they closely adhere. This whole movement lasts 14 seconds during which pulses created by deep vibrations are recorded by the captors and directly transmitted to the automotive track which processes them and translates them into figures

and data, pursuant to a specific seismic acquisition code. This operation is carried out over the entire area which would be delimited with recording pickets. At 4H.30, the team gets back to the camp for food, sport activities, television or leisure. With respect to safety, the appropriate equipment is available and particularly those against fires. A doctor and a medical centre are also available on a full time basis. Regarding communications, the camp has a mobile equipment, as required for the desert, and which includes in a Thuraya type material, a V-SAT and SSB radios. According to Boualem hamana, Chief operating officer of the EGS-180 mission, the conditions are quite acceptable :

“It is clear that one could think that it is too hard to be so isolated but we are not always here. Our teams our well taken care of and their safety is our priority. Everything is designed to secure their well-being and this is made possible by a strict discipline and the availability of the required hygiene and maintenance means. We have taken every situation into account, specially in the event of sinister or medical evacuation. Communication means are efficient and we are permanently connected with our logistic base in Hassi Messaoud. Supplies are made in two ways: every week for perishable products and every month for imperishable ones. I can say that work conditions are optimal and enable us to reach an appreciable service quality, whatever the remoteness is”. Most of the workers agree with this declaration and no major incident or serious sinister has occurred so far. Life in the EGS-180 camp is normal and ENAGEO can fulfil its seismic missions in time and at the great satisfaction of its clients.

Mission of hassi Guetar WesthGAW. 3D. Block 427 EGS-180

A camp in the middle of the desert

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Today, renewable energies are at the core of the debate about sustainable development. According to the German Space Agency (DLR), Algeria has the most important solar potential in the Mediterranean basin.

However, solar energy is highly costly because it is a new market created technology. Selecting the gas-solar hybrid combined cycle technology will help reducing the cost.

Solar technology is potentially appropriate in the implementation of the national development programme of the high plateaux because one of the parameters of the project is to have the right surface.

In addition to the Hassi R’mel power generation station, the programme includes the construction of a solar techno pole with the support of the renewable energies institute of Gardaîa.

By the end of the year, this technopole will be effective with the assistance of Sonatrach-Sonelgaz, NEAL, the renewable Energies Development Centre (CDER), the universities of Gardaîa and Laghouat, the Space Agency (ASAL), and the expected participation of the German Space Agency (DLR) and the Spanish Solar Research Centre (CIEMAT).

The objective of the programme which has been adopted by the GREG for the development of energies and mostly renewable ones is to reach 5% of the global electricity production by 2015.

The target is to set the basis for an Algerian industry and technology. By 2015, the electricity production capacity by solar energy will exceed 6000 MW in Algeria.

This programme will be undertaken under a cross partnership between private and national partners in which NEAL and other developers will hold up to 34% interest stake, and private investors up to 66%.

Financing will be as BOO (Build Operating Owning) and the ratio capital/debt will represent 20/80 of the global investment. This means a financing around USD 2170 million (2006) in which foreign participation amounts to USD 723 million (2006).

The electricity sale contract will be as “Take or pay”, covered by Sonatrach (eligible client) for gas and oil installations.

Solar-gas synergy is a determining asset of our country. Indeed,

its impact on hybrid production costs is quite significant. The flexible recourse to solar electricity in the combined cycle allows to reduce recourse to gas which could reach levels hard to sustain at mid and long terms. This synergy allows to have a total flexible transition from gas to thermal solar energy by 2020-2030, when gas demand will be more important.

Presentation of the project: Construction of a gas/solar hybrid power generation station with a capacity of 150MW.

(Mohamed Derriche, head of project, NEAL)

Modern thermal-solar power generation stations appeared in the 19th century.

The oil crisis of the seventies restarted the need to investigate about this technology.

The most advanced countries in that today are US, Spain and Germany.

In June 2005, NEAL has called for an investor in the design, the construction and the maintenance of a gas-solar hybrid power generation station with a total capacity of 150 MW.

The selected bidder is the Spanish company ABENER.

The station will be located in Hassi R’Mel, in an acreage of 130 hectares. This location was chosen for the following reasons:

• A great availability of gas

• Access to the national electric grid

• Important sun exposure (3000 h/year)

• Water source (3000 cm/d)

• Flat soil

• low pluviometry

nEALrenewable Energies Development Strategy

(M. hasni Toufik, nEAL C.E.o.)

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The company Solar Power Plant (SPP I) which was created in August 2006 is in charge of the follow up of the construction phase, the exploitation and the marketing of electricity.

The plant is a combined cycle type and uses steam and gas turbines for the production of electricity.

The contractual package (By M. Mustapha Boukhari,

legal manager, nEAL)

The capital of SPP1 is split between NEAL which holds 20%, The Algerian Banque Extérieure with 14% and the Spanish company ABENER with 66%.

Engineering, procurement and construction contracts, as well as operating and maintenance are entered into by SPP1 and ABENER.

The electricity sale and purchase contractwillbe entered into by Sonatrach, NEAL, ABENER ARGELIA, ABENER ENERGIA and SPP1.

Financing will be by the Banque Extérieure and SPP1.

During the investment period, ANDI will follow up the

exemption of transfer taxes for all real estate acquisitions undertaken pursuant to said investment, the effective application of the 2% reduced rate, the VAT exemption for B&S, and the reduced customs duty for imported goods. It will also make sure that the project is exempted of IBS, IRG and TAP during a period of five years, in the starting up phase.

As a conclusion, I would say : ” Let the sun of Hassi R’mel enlighten the nights of Seville and Madrid”.

Schedulling Observations Hybrid solar-gas Project using the recycled

Water of the field of Hassi R’mel Project include in the development plans of the high plateaux Structuring project for the development of the Souf region, and briny water desalination in the Rhir canal (120 000cm) Valuable use of Hassi R’mel flared gases

ObservationsHybrid solar-gas Project using the recycledWater of the field of Hassi R’melProject include in the development plans of the high plateauxStructuring project for the development of the Souf region, and briny water desalination in the Rhir canal (120 000 cm)Valuable use of Hassi R’mel flared gases

The final contracts to secure funds for the project of the hybrid power generation station (gas-solar) of Hassi R’Mel, with a capacity of 150 MW, in which about 30 MW by means of solar energy, were signed in Algiers, December 16, 2006, in the presence of Dr. Chakib Khelil, Minister of Energy and Mine.

The capital of this company, 80 million USD, is split between the Spanish company

Abener which was granted the construction contract (66%), Neal (joint-venture between Sonatrach, Sonelgaz and the private company Sim) (20%) and BEA (External Bank of Algeria) (14%). These final contracts include : a contract for the sale and purchase of

hybrid power generation station of hassi r’Mel : one of the first in the world

nEAL - Abener - BEA

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electricity, a construction and maintenance contract and a financing agreement.

The first contract was signed by the company in charge of the construction, exploitation and maintenance of the “solar power plant” (SPP1) and by Sonatrach as the purchaser of the electricity to be produced.

Contracts relating to the construction, maintenance and coordination of the station were signed by the Spanish partner Abener and SPP1. The last contract for the financing of the project was initialled by SPP1 and BEA, as leaders of a pool including the Credit Populaire d’Algerie (CPA) and the Banque Nationale d’Algerie (BNA). This financing represents 80% of the investment, and the remainder is provided by partners.

It should be pointed out that this project did benefit by advantages offered by the national agency for the development of investments (ANDI) and has been granted a tax exemption for a period of 5 years.

As underlined by the Minister, the financial contribution of the Spanish partner, about 54 million USD, “will comfort foreign investors showing interest in the Algerian market”.

The Minister has also appealed for a greater access to the market of electricity exported to Europe, and said that “the energy charter as proposed by the European Union must integrate the facilities which are required for this objective”.

M. Tewfik Hasni, New Energy Algeria C.E.O. has underlined the importance of this project, the first one as such in the world, and declared that this will enable Algeria to use renewable energies for the production of electricity, and mostly solar energy which in our country is estimated to 160 000 tw/h, that is the equivalent of 38000 billion cm of gas per year.

This project which is expected to be completed in 33 months is part of the ambitious programme for the development of renewable energy adopted by the Electricity and Gas Regulation Commission (CREG). The objective is to produce 5% to 6% of electricity with this renewable energy by 2010-2015. Indeed, the hybrid power generation station of Hassi R’Mel is the first step in a series of projects planned by

NEAL and approved by CREG. In the near future, a similar power station is envisaged in Meghaier, coupled with a sea water desalination station, and another one in the wilaya of Naâma. The programme of NEAL includes aeolian farms projects in Tindouf and Bechar.

The signing of the contract was the result of a bid call to national and international investors, pursuant to the BOO formula (Build Operate Owner). The power station will be located south of Hassi R’Mel in an area, spreading over 130 hectares, neighbouring the existing gas turbine station of Tilghemt.

The location of the project is justified by the proximity of Hassi R’Mel, and therefore total availability of gas, access to the national electricity grid, an important sunning rate (3000h/y), a phreatic surface table of about 3000cm/d and a flat ground in a zone with very little rain.

Hybrid technology as a source of renewable energy was selected because its marketing allows to reduce the excess cost generated by the use of this new technology, bearing in mind that thermic solar energy is less expensive to produce than photovoltaic solar. Several countries have chosen the same approach.

Given its size and its technical specifications, this ambitious project will provide a whole range of expertise to workers and specialists involved in engineering and exploitation. It will turn Algeria into a pioneer in the use of renewable energy in the Mediterranean. In addition, with the reform of the electricity market regulations, the enactment of the new law related to electricity and gas distribution, as well as the decree bearing renewable energy and appropriate inciting measures, its financing structure is totally secured.

Sonatrach participation in this project, through NEAL in which it holds a 45% stake interest, translates the willingness of its officials to turn the company into a supplier of multiple energies, an investor in the market of alternative energies as well as electricity, both in Algeria and abroad. Today, Sonatrach is involved in several power generation projects in Algeria, co-generation projects in Spain, and it is actively seeking other opportunities in the market of electricity networks in Europe.

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The “open public” air transport should be a new player in this sector by the second semester of 2008. Indeed, Tassili Airlines has decided to invest in this segment in parallel to its initial mission of providing transport to the

hydrocarbons sector employees. This decision to open up to the national and international segment was made in April 30, 2005 at the signing ceremony of the acquisition by Sonatrach of the interest-stake held by Air Algerie in Tassili Airlines. It was made in line with the request made by public authorities to reinforce domestic capacity and to do it with Sonatrach means and managerial experience.

A regional company At the ceremony held in April 30, 2005, M. Mohamed Meziane, Sonatrach C.E.O. as declared : “Pursuant to the multiform role we want to have in the development of various segments of the national economy, our objective is to turn Tassili Airlines into a regional company with a public service dimension and any related commitment”.

Firm commissioning of planes Studies related to this step are about to be completed and the reinforcement process of the fleet has already started with the contract entered into with the Canadian Bombardier, June 2006. Bombardier is expected to start delivering 4 Q 400 planes, 74 seats, in July 2007, one plane per month. The last one will reach Algiers in October. At the signing ceremony, M. Ali Rezaiguia, Sonatrach Finance Executive Manager and Chairman of Tassili Airlines Board of Directors, has announced that a budget of 1 bi l l ion dol lars wil l be dedicated to the acquisit ion of 41 planes, 3 modules type : 35 seats, 70 seats and 1206130 seats.

Investing in the domestic network The company also intends to enter the domestic and international

markets as well as to usefully contribute to employees air transport. The objective of Sonatrach is to use Tassili Airlines for its own needs and those of the national oil industry, particularly in terms of employees transport to remote production zones south of the country. The significant investments which were made in the sector have enhanced the demand and imposed quality. Bombardier is also expected to deliver 4 Dash type 8/200 planes (35 seats) from June to September 2008.

Sonatrach effective contribution

Since its 100% integration to Sonatrach, Tassili Airlines has gone through a whole process of change. Sonatrach has offered its managerial experience and its financial means to reinforce national air transport capacities. Even if priority is given to the oil sector employees transport, the objective of TAL is also to open up air transport activities. Its aim is to reinforce national means and, with Air Algerie, open up to a maximum destinations in the country. National demand is bound to increase with the major development projects to be undertaken in the high plateaux and the south and Tassili Airlines is prepared to face such a great challenge.

Tassili Airlinesobjective : to transport general public in 2008

M. Ali Rezaiguia talked about the expansion process of Tassili Airlines Group and its integration to national and international public transport as soon as the second semester of 2008.

Could you tell us about the reasons why Tassili Airlines has decided to enter the domestic air transport market in a near future ?TAL is already present in the domestic market for the transport of the oil sector employees. Its wish, strongly encouraged by the parent company Sonatrach, the Ministry of Energy and Mines and state authorities is to reinforce this presence. TAL is aware of the stakes it implies and of the importance of a great demand

not easily met by Air Algerie. Given that, a coherent development plan has been adopted by the Group to fulfil these missions and progressively put in place the various transport companies. To this effect, as from the second semester of 2007, 4 Q 400 type planes will be added to the fleet and the delivery by the Canadian constructor Bombardier will go from July to October 2007. Each plane is a 74 seats one. The oil and oil services sector will be the first one to benefit by this service. The other market segments will be next and everything has to be done with great care in order to properly organize the missions of TAL Group. If everything goes as planned, national and international public transport should

“TAL will substantially reinforce its transport capacity”

Interview by M. Ali Rezaiguia, Chairman of Tassili Airlines Board of Directors

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start by the end of the 2008 second semester, right after the reception of the four new Q 200 planes.

The “open public” air transport activity of TAL will require a restructuring of the Group. What would be the changes ?It should be pointed out that the management of Tassili has carefully considered the markets to be targeted, their requirements and the national and international outlets, before starting any organizational change. In the meantime, the company has been entrusted by state authorities to take in charge the fight against migratory locusts. This has required great efforts by the teams in place and was successfully carried out with the help of Naftal and its professional experience as well as with the contribution of the Ministry of energy and Mines. During that period of time, various studies about air transport market in Algeria have been developed together with a comprehensive diagnosis of the organization, systems, procedures, available facilities and transport means of the company. It was only when this diagnosis was completed that the restructuring plan was submitted to the different bodies of the company. This restructuring plan has led to the definition of the expanion strategic axes and to set up TAL Group which will consist in a holding and three operational companies. The first company denominated “Naphtassili Air” (NTA) will be in charge of the following missions :

• Transport of oil and oil services shift teams• Transport of the hydrocarbons and mines personnel for their

missions• VIP special transport (executive Jets flights)• Medical transport• Surveillance flights of pipes and industrial installations

The second company denominated “Tassili Agro Aérien” (TTA) will be in charge of the following missions :

• Fight against migratory locusts (spreading of pesticides)• Agricultural works• Fight against forest fires • Assistance and medical emergencies• Ecological assistance

The third company denominated “Tassili Airlines” (TAL) will be in charge of the following missions :

• To provide regular and punctual national and international flights• To provide air fret and post, in the national and international

networksThis organization has been completed with the setting up of a holding denominated “TAL GROUP” which will help every entity of the group to operate in a coherent way and which will essentially :

• Manage the portfolio of the Group subsidiaries• Optimize the Group cash management• Define the maintenance policy of the Group

This expansion strategy will help to face the future mutations likely to occur in the world air transport sector, and to be able to meet the socio-political requirements of the national environment.Even if the subsidiaries have different activities, they should be capable of complementing one another and to make use of synergies in favour of all the structures of the Group. All the legal requirements have been complied with by the Group. In addition, a study was launched with IATA (Canada) contemplating all details of the companies organization (structures, positions, responsibilities charts...). This study has been completed and is being implemented.

Nonetheless, air transport of oil and oil services personnel remains the priority of Sonatrach and most particularly the transport of those working in remote, isolated and very hard areas.

How about material means put in place to reach this growth objective ? Sonatrach has provided Tassili Airlines Group with enough financial means to acquire quite a number of different capacity planes, to construct a sophisticated shed for planes and to install various technical facilities for exploitation, maintenance and security personnel. Given that, TAL will acquire 40 planes which will be the Group assets. Following that and depending on the needs, the Group will have recourse to planes chartering to reinforce its transport means. Transport means have to be optimized by the different companies of the Group which will transport Sonatrach workers from north to south and vice-versa, but must also be used for normal national and international flights.

How about the maintenance of Tassili Airlines fleet ? This aspect is a strategic one and is still under consideration by TAL. In general, maintenance of Tassili Airlines planes will be undertaken by the company’s own means and/or by maintenance entities available in Algeria or could be carried out by the various constructors having delivered planes to the Group. The maintenance policy of the Group is still being studied by competent experts who should take into account the needs of the company, available or still to be delivered planes, their origin, types of maintenance, existing capacities in the country and abroad. This activity is very important and the Group will do its best to be up to it. Maintenance and safety are a major priority for TAL.

Does TAL have enough personnel to manage and develop this new activity ?Today, Tassili has the required qualified human resources for the planes it owns in terms of exploitation, maintenance, technical and managerial activities. Indeed, much remains to be done, in number and in quality, to comply with the development plan and the expansion objective of the company. A hiring process has been launched for pilots, mechanics, engineers, maintenance technicians, and also administrative and finance managers. The election is already completed. In addition, a vast technical training programme has been initiated by Bombardier in view of the reception of the Q 400 planes in July 2007. A supplementary programme is planned with the same manufacturer under the new contract for the acquisition of Q 200 planes ; this supplementary programme will provide Q 400 trained pilots with the capacity to pilot Q 200 lanes and vice-versa.

Other training stages have been identified and relate to management. Measures have been taken to involve national consultants and institutions in the levelling of our personnel.

How far are you in the new organization process and when will it be operational ? The organization process, hiring, personnel training, acquisition of planes and other installation means have already been initiated by the group. To enter the market, air companies need to have a number of authorisations by the appropriate authorities. We will shortly apply for them. We are confident that a timely assistance will be given to that on this matter by these authorities who have already demonstrated their availability to do so. The ministry of Energy and Mines is strongly willing to contribute to the reinforcement of the air transport national capacity. If everything goes right, the implementation programme of these companies will spread over 2007 to 2009.

Mediterranean Offshore Conference - OMC 200�

In March 28 to 30, 2007, Ravenne, an Italian province, about 30 km from Bologna, was the venue for the 8th Mediterranean offshore Conference & Exhibition, under the subject of “The Mediterranean : one sea for three continents”.

This international event which is one of the most important one in the field of energy has attracted a great number of experts, managers, investors, economic operators, new technology suppliers, entrepreneurs and

hydrocarbons industry companies. More than 27 countries of the three continents (Europe, Africa, Asia) represented by 362 oil, gas and service companies have attended this event to exchange experiences and new technologies, strengthen partnership relationships and seek new cooperation opportunities in the energy sector.

The technical programme was rich and diversified. 180 presentations were made as oral sessions, posters and workshops. Subjects dealt with were connected with drilling techniques and offshore installations characteristics. In parallel, and in the exhibitions, charts were shown about the existing relationships between oil and service companies, HSE management systems, means to put in place to interest young talents in exploration and production... etc.

The “OMC 2007” was also the opportunity to debate about means to put in place in order to diversify energy supply sources in an environment where the natural gas European demand is in constant rise. The other issue which was discussed was the requirement to develop new infrastructures aimed at securing oil and gas reliability and transport under the best environmental conditions. At the opening session of the Conference M. Belkacem, Upstream Vice-President said that” customers and suppliers have to

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the

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combine their efforts so as to secure energy supplies for the future generations”.

The conference was closed by a concert with the orchestra Magna Grecia just to remind everyone, once again, that the Mediterranean is a sea which must be preserved for the well-being of future generations.

The next offshore conference will be held in 2009.

Summary of the address made by

M. Boumedienne Belkacem, Upstream Vice-President at the OMC 2007 Conference, Ravenne.

Development of skills and use of the best technologies :a paradigm to secure hydrocarbons supply

The first commercial hydrocarbons production in Algeria dates back to 1958. In 2006 Sonatrach and its partners have produced 230 million tons oil equivalent, in which 64 as crude oil, 141 as natural gas, 16 as condensate and 9 as LPG. In less than half a century, Sonatrach has become an integrated and international oil and gas group which abides by its commitments to its clients.

For the years to come, Sonatrach policy is to consolidate this position under a win-win approach, and particularly with clients in the Mediterranean basin. This option is comforted by the high potential of the European long-term demand, mostly for gas, and by the availability of important hydrocarbons resources in the Algerian sub-soil.

In line with this policy, the pipeline intercontinental network has been developed.

In the upstream activity, the major concern relates to the means to be put in place in order to comply with hydrocarbons

Poster

Mrs Jaouida Mehieddine. Upstream engineer

Subject : Thermal evolution of organic matter in the Oued Saret region

Prize for the best design granted to Sonatrach

Sonatrach delegation has been granted the prize for the best exhibition stall by M. Arne Walter, Secretary General of the International Energy Forum and M. Antonio Angelucci President of OMC 2007, in the presence of all participants.

Oral session

M. Omar Benameur. Upstream engineer

Subject : Use of space imagery in the study of the Cambro Ordovician formations

supplies. It should be noted that the era of hydrocarbons conventional resources seems to be over and displaced by non conventional ones. Oil and gas extraction will have to be made in compliance with more serious HSE conditions, at great depths (more than 5000 m), and often under HPHT conditions and from tight reservoirs. Appropriate human resources capacities and proven technologies have first to be available in order to be up to these new challenges.

Sonatrach participants

Workshop

M. Ali Meghouche. HSE/Upstream department

Subject : resistance to change, tools and approaches

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In July 3, 2007, Sonatrach International Exploration & Production (Sipex), a 100% subsidiary of Sonatrach Group, has officially incorporated the office of Sipex Branch Mali, in Bamako. This setting up of Sipex Branch

Mali has been decided further to the signing in February 9, 2007, of a hydrocarbons exploration and exploitation concession agreement related to block 20 in the Taoudenni basin, Mali. Over an acreage of about 118 000 square km, block 20 is next to the Chenachène contractual area in Algeria where Sonatrach is already operating. The work programme planned by Sonatrach in block 20 will be carried out in four (04) years and provides for geological and geophysical works, one drilling and a minimum investment of 11.6 million USD. In Mali, Sipex also holds 25% interest-stake in production-sharing contracts related to five (05)exploration blocks (1,2,3,4 &9) in the Taoudenni basin, in partnership with ENI which holds 50% and Baraka Petroleum 25%.

Following its incorporation, Sipex Branch Mali has organized a press conference, July 4, 2007 at the Sofitel-Amitié hotel in Bamako. The conference-debate was headed by M. Benhamou, International Activities Executive Manager and was attended by several senior executives of the energy and mines sector of Mali as well as by diplomatic representatives.

This event was the occasion for Sonatrach to present its activities and international strategy, particularly its involvement in Africa, its HSE policy and its actions as a citizen company.

This gave rise to a productive debate with the numerous media representatives of Mali.

Before closing the ceremony, Sonatrach has symbolically offered football uniforms to two sport clubs of Bamako, Djoliba and Mabido Keita.

sonatrach international Petroleum Exploration & Production

incorporation of the office of sipex Branch, Mali

Press conference by Sonatrach

The “Giant of Ksour”, a sauropod dinausor discovered in 2000 in the middle Jurassic, west of Algeria , has been officially named by the scientific community as : “Chebsaurus Algeriensis”.

Works carried out in the area have already allowed to collect 51 remains of one same animal and which will be added to the collections of Sonatrach Hydrocarbons and Geology Museum.

This is the most complete skeleton ever discovered in Algeria to date, only isolated remains were found before. Several field excavations as well significant technical means will be required to investigate the area.

It is the skeleton of a new sauropod, including cranial material, which was discovered in a detrital series about 60 m thick intercalated between sandstone bars from the Middle Jurassic of the Occidental Saharan Atlas( Algerian High Atlas) in the Ksour mountains. Other sauropod remains were found associated with great to medium size theropod teeth and other indeterminate sauropod bones. The sole well preserved remain is a bennetitale (cycadeoidea) from the Larouya mount (Slightly more recent than the Rouis El Djir Mount) , but this vegetal is representative of the Jurassic flora and does not provide a better support to date the site.

Systematic paleontologyDinosauria Owen, 1842

Saurischia Seeley, 1888

Sauropodomorpha Huene, 1932

Sauropoda Marsch, 1878

Cetiosauridae Lydekker, 1888

“Giant of Ksour” Chebsaurus Algeriensis gen, & sp.nov.

Etymology The generic name is from the Arab word Cheb, which designates a teenager, in a friendly and tenderly way in the western part of Algeria (this sauropod being a juvenile) plus sauros greek word for lizard. The specific name refers to the discovery site country. Holotype. DOO1-O1 to 78 (fig 2) temporarily in Sonatrach CRD, Boumerdes, Algeria ; partial skeleton and cranian material of a juvenile sauropod including a part of basioccipital, a surangular and teeth. Location and horizon ; Rouis El Djir mount, Oulakak, daira of Sfissifa, wilaya of Naâma, Occidental Saharan Atlas, Algeria. The site is at mid-slope of the Rouis El Djir mount, on its northern hillside, in a continental detrital series from the

The «Giant of ksour»,a dinosaur discovered

in Algeria, has beennamed

«Chebsaurus Algeriensis»

sonatrach and Paleontology

indeterminate Middle Jurassic which overlaps the clay-limestones from early Jurassic.

DiagnosisPrimitive eusauropod displaying the following autapomorphies : a slender and elongated surangular ; teeth crown and root with tuberculated surface ; short and robust basioccipital tubera which diverge with a V-shape and are inclined at about 70° to the horizontal in caudal view (their elliptic surface is oriented with a craniodorsal long axis) ; the base of the postzygodiapophysial lamina in the transverse process is included within the cranial part of the postzygapophysis in lateral view ; there is a small elliptical fossa caudodorsally to the lateral excavations (pseudopleurocoels) on the middle dorsal vertebra centrum.

Chebsaurus is a sauropod because it possesses a triradiate proximal condyle of ulna with a deep radial fossa, the reduction of an olecranon process on ulna and the pedal ungula of the first digit is sickle-shaped. We can also specify that it is a sauropod by its teeth with V-shaped wear facets, its spatulate (D-shaped) teeth crown with a wrinkled enamel surface texture, its opisthocoelous cervical centra, its block-shaped carpal bones and its pedal nonungual phalanges broader than long.

Comparisons and conclusionsChebsaurus was a small 8-9 m long sauropod which was at the juvenile stage because its vertebra are not fused with its

Fig. 2. éléments de l’holotype de Chebsaurus algeriensis. (a) D001-63 basioccipital en vue caudale ; (b) D001-77 surangulaire droit en vue latérale ; (c) D001-78 dent en vue linguale, avec un agrandissement de la texture de la surface de la racine ; (d) D001-32 ulna droite en vue médiale ; (e) D001-08 phalange unguéale en vue latérale ; (f) D001-49 os carpien ; (g) D001-02 phalange du pied en vue palmaire ; (h) D001-01 phalange de la main en vue dorsale ; (i) D001-36 extrémité proximale du pubis droit en vue proximale ; (j) D001-15 fragment cranial de centrum de vertèbre cervicale en vue latérale gauche ; (k) D001-35 épine neurale de vertèbre dorsale en vue latérale gauche ; (l) D001-17 centrum de vertèbre dorsale en vue latérale gauche ; (m) D001-20 centrum de vertèbre caudale en vue latérale gauche. Barres d’échelle : 3 cm, à part (c) : 2 cm. Abréviations : BoT., tubercules basioccipitaux ; b. podl., base de la lame postzygo-diapophysiale ; e. fossa, fosse elliptique ; for., foramen ; pl., pleurocoele.

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neural arches. This feature is not found within other sauporods of the middle and lower Jurassic (such as Shunosaurus liii and Ferganasaurus in Asia, Cetiosaurus Oxoniensis in Europe, Patagosaurus Fariasi in South America, Tazoudasaurus Naimi and Atlasaurus Imelakei of North Africa, Vulcanodon Karibaensis of South Africa).

Chebsaurus is the most complete sauropod discovered so far in Algeria. It has quite a number of similarities with Lapparentosaurus madagascariensis (Isalo III formation, Bathonien, Madagascar), Cetiosaurus Oxoniensis (Forest marble

formation, Bathonien, Great Britain) and Cetiosaurus Oxoniensis (Rutland formation, Bajocien, Great britain). A more detailed description and a phylogenic study will be necessary to have a more detailed description.

MOHAMMED F, MAMI L., CHERIEF S. (Centre de Recherche et Développement, Sonatrach.)

A MEKAHLI L. BENHAMOU M., BOUTERFA B., KACEMI A. (Laboratoire de Géodynamique des bassins sédimentaires de l’Université d’Oran Es-Sénia).

I n June 23, 2007, a press meeting was held at the Daira of Bab El Oued to present the rehabilitation project of Notre Dame d’Afrique Cathedral, located in the district of Bologhine. This great building which dates back to the 19th century needs restoration and

the importance of that was underlined by the Wali who was present at the meeting.

With the assistance of several companies, Notre Dame d’Afrique Cathedral will recover its past beauty. Sonatrach, in its capacity as citizen company, was the first one to offer its assistance. In parallel to the works to be undertaken, the projects also provides for the training of personnel which would be qualified in old buildings restoration.

«notre Dame d’afrique»Cathedral in algiers

Rehabilitation works of

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