Algiers, Algeria | – Sonatrach, Algeria’s state energy producer, has signed an agreement with Baker Hughes, a GE company (BHGE), to set up a 2,000-sq-m oilfield equipment manufacturing facility in Arzew Industrial Zone aiming to strengthen Algeria’s position in the upstream oil and gas market to meet local demand.
The agreement was signed in the presence of the Minister of Energy, Mustapha Guitouni, at a ceremony hosted by Sonatrach in Algiers.
Sonatrach and BHGE will have 51 per cent and 49 per cent ownership respectively, in the new company.
The project draws on the extensive experience of BHGE in oilfield equipment manufacturing and leverages the company’s global and local scale to provide production solutions from the facility, which is anticipated to be operational in December 2019.
Through an initial combined investment of $45 million, the new company will provide manufacturing, assembly, and maintenance for various types of oilfield equipment including wellheads, xmas trees, BOPs and valves, establishing a major base to fulfil Algeria’s increased domestic upstream requirements with the potential for future exports.
The facility will also add training capabilities and offer competency development programmes for more than 200 engineers during the first seven years.
In addition to reducing dependence on imports, the facility will boost economic competitiveness and strengthen the local supply chain by helping to create 200 local jobs in Oran’s Arzew area, a substantial number of indirect jobs serving the sector, and the development of qualified industrial SMEs.
Abdelmoumen Ould Kaddour, CEO of Sonatrach, said: “The creation of this company is a breakthrough in our integration chain, with a view to better controlling costs and deadlines to ensure the transfer of know-how and technologies through the diversification of its portfolio of goods and services.”
“It will contribute to strengthening the national industrial fabric and the creation of a network of national subcontractors, certified to international norms and standards. It will also build on the relationship between Sonatrach and BHGE, and boost it to a partnership of excellence,” he said.
Rami Qasem, CEO of BHGE Middle East, North Africa, Turkey and India, said: “Through the delivery of high end oilfield products and services, our company reaffirms its focus on driving further productivity for our customers across the entire oil and gas value chain.”
“We are honoured to work with Sonatrach and play an important role in supporting the country’s ambition to be among the key upstream manufacturers in North Africa. The combined effort underscores our commitment to help fuel the economy by improving economic competitiveness, developing skilled talent and delivering the highest manufacturing standards with plans for future exports,” he said.
“The new company will not only revitalise Algeria’s local supply chain, but also position the country as a key manufacturer in industrial equipment,” he added.
Building on over 40 years of presence, BHGE has been involved in several major development projects including its partnership with Sonatrach and Sonelgaz for the creation of Algesco, a major turbomachinery, maintenance and repair centre in Boufarik, serving Algeria’s upstream, midstream and downstream customers.
BHGE has also launched the first edition of the global “Oil & Gas University” programme in the country, an initiative that has trained 25 young professionals in technical and leadership skills, it stated.