The Spanish energy sector is following Algeria's decision to break diplomatic and commercial relations with Spain with concern. Cepsa and Repsol have important oil and gas deposits in that country and Naturgy has million-dollar gas supply contracts.
Sources from these companies have stated that "there is no news" in their respective activities and that they continue to work normally.
Naturgy has been negotiating with the Algerian authorities for months to update the contracted gas prices until 2032 and which is valued at around 12,000 million euros. The talks began months ago at the request of Sonatrach, the Algerian state energy company, and Naturgy has assumed the price increase. "Thinking about a drop in prices is being out of the world," said the president of the Spanish group, Francisco Reynés, a few weeks ago.
In addition, it must be remembered that in October 2020 Naturgy obtained a downward revision of Algerian gas prices given that they had collapsed in international markets due to the drop in demand due to the pandemic. And that Sonatrach is a historical partner of the Spanish group. It even owns 4% of its capital and both share the ownership of the Medgaz gas pipeline (51% Sonatrach and 49% Naturgy).
The first gas supply contract between Algeria and Spain was signed in 1972 and two years later the first methane tanker arrived at the Barcelona regasification plant, the only one on the Peninsula.
At this point we must not forget that at the end of October Algeria closed the Maghreb gas pipeline to punish its neighbor Morocco. But the measure is going to turn against the Algerians themselves, since Spain has authorized Morocco to send certain quantities of gas through that gas pipeline for its own consumption.
Repsol has been present in Algeria since 1973, developing different gas exploration and production projects. It has a permanent office in the capital, Algiers.
Last April, the Algerian government extended Repsol's exploration contract for a period of five years in Reggane Nord. Repsol produced 19,700 barrels of oil equivalent in 2021. Estimated reserves amount to 23.3 million barrels of crude.
The equity exposure in Algeria also increased last year to 505 million euros (434 million in 2020), according to reports from the oil company.
As for Cepsa, it landed in that country in 1987 and carries out its activity in the Ourhoud (ORD), Rhourde El Krouf (RKF), Timimoun and Bir el Msana (BMS) oil fields. Its production exceeds 137,000 gross barrels.