Intewrview : Hesham Mekawi

What can be done to further encourage Algeria’s upstream segment to reach its full potential?

HESHAM MEKAWI: We are excited about Algeria’s upstream potential. Its improved infrastructure and reserves make it ideally positioned to become a major global oil and gas supplier. We recently extended the In Amenas production-sharing contract to 2027, and also signed a memorandum of understanding with Sonatrach and Equinor to find and develop gas resources around In Salah and Tadmaït. These will potentially sustain production at the In Salah Gas joint venture for many years.

Sonatrach’s 2030 strategy represents a significant positive development for its upstream prospects. The discussed amendment to the hydrocarbon law complements this strategy. These reforms demonstrate the government and Sonatrach’s shared interest in building growth in the sector.

How are international oil companies (IOCs) supporting the emergence of the shale gas segment?

MEKAWI: Algeria’s shale gas potential is among the largest in the world; however, its resources must first be thoroughly evaluated and explored. This must happen in order to accurately understand the scale, potential and challenges of the opportunities available. IOCs have the expertise to be ideal partners in the future development of unconventional gas resources. We can apply our technology and capabilities across the life cycle of field development. BP is now one of the largest shale operators in the US, and we have already demonstrated the application of our experience outside of the US through projects with major unconventional gas resources in Oman.

How will shale gas exploration and production projects in the MENA region continue to develop?

MEKAWI: There is likely to be considerable unconventional potential across the MENA region. The industry has been gathering data and conducting studies to better understand areas that could present the most competitive opportunities.

These studies demonstrate that while there are large resources established across a number of hydrocarbon provinces, there remains significant uncertainty as to the production potential of shale in the region. Exploration and appraisal are needed.

What role will shale gas and alternative energy sources play in supporting energy diversification?

MEKAWI: The globe faces a complicated challenge. Increasing levels of energy are needed to build roads and hospitals, create jobs, and fund training and education, but we must simultaneously work to reduce emissions. Renewables are growing faster than any fuel in history, but they are likely to reach only one-third of energy demand by 2040. Therefore, we need to take a collaborative approach to reducing emissions, and meet energy needs while making all fuels cleaner. The BP energy outlook suggests that by 2040, oil and gas will account for at least 40% of the world’s total energy.

Continued investments in oil and gas resources are necessary in order to replace declining output from existing fields and meet growing demand for energy. The MENA region has the conventional resource base and unconventional opportunities to add to that.

Where in North Africa holds the most potential?

MEKAWI: BP is active across the region, and we are excited by its diverse exploration opportunities. The Mediterranean is a key gas basin for us, and we believe that Egypt, Libya and possibly Algeria hold significant reserves. There are also vast areas of unexplored land in Libya and Algeria, and many technologies that could help unlock this potential. For example, we could use super high-density seismic technology, which is efficient and cost effective, to explore large areas while minimising the environmental impact. Similar technology has previously been used successfully in Oman.