CAPITAL: ALGIERS

MONETARY UNIT: DINAR

REFINING CAPACITY: 502,665 B/CD

PRODUCTION: 765,800 B/D

OIL/CONDENSATE RESERVES:

9 BILLION BBL

NATURAL GAS RESERVES: 130.3 TCF

Operators kept an average of 12 drilling rigs busy for most of 1999 despite the downturn in crude oil prices.

Anadarko Algeria Corp. continued to pace E&D activity with operations in the Berkine sub-basin in southeastern Algeria. Anadarko produced 4.1 million bbl of oil in Algeria in the first 9 months of 1999 versus 587,000 bbl in the same period of 1998.

Hassi Berkine South field was the first field to come on stream, in May 1998. Anadarko let a $331 million contract for a 75,000 b/d expansion of the HBNS oil production module 1,100 km southeast of Algiers.

The other nine fields declared commercial are Hassi Berkine Southeast, El Merk North, El Kheit Et Tessekha, El Merk, El Merk East, El Merk Central, Berkine Northeast, Rhourde Berkine, and Ourhoud (formerly Quobba).

Elf took a 40% interest in the production sharing contract that covers giant Rhourde el Baguel field in the Ghadames basin about 100 km east of Hassi Messaoud. ARCO operates REB, Algeria?s second largest oil field with OOIP of 2.5-3.0

billion bbl. About 500 million bbl had been produced, and ARCO, Elf, and Sonatrach hoped to recover an additional 500 MMBOE during 25 years.

The REB miscible gas injection project was to start up in late 1999 or early 2000, with production to rise eventually to 100,000-125,000 b/d.

Just northeast of REB, an ARCO group was exploring the 600,000 acre Hassi Bir Rekaiz block, also in Ghadames, where it had gathered extensive seismic data and reported a discovery in 1997. A new well, Semhari East-1, was spudded in late 1999 toward 3,800 m targeting Triassic and Ordovician.

Burlington Resources-Talisman?s MLNW-1 wildcat on Menzel Lejmat Block 405 in the Berkine basin flowed 8,459 b/d of 42.4! gravity oil and 12.6 MMcfd of gas from Strunian F1 oil pay in the Devonian. The same MLN-6 appraisal well on Block 405 flowed 3,553 b/d of 44! gravity oil and 4.98 MMcfd of gas from two TAG-1 intervals.

BP Amoco and Sonatrach?s In Salah joint venture clinched a 15-year deal to supply 4 bcm/year of gas to Italy?s Edi-son

Gas SpA. The gas was to come from fields in the In Salah area of Algeria, which BP Amoco and Sonatrach were

working to bring into production in 2003. Exploration and appraisal activities are completed. The fields, 750 miles south of Algiers, were expected to produce a combined 9-11 bcm/year of gas.

Processing activity

Algeria was embarking on several large gas-processing facilities expansions with the assistance of multinational oil companies, which were to add more than 1 million metric tons/year to LPG export capacity.

Kuwait and Algeria signed an agreement in April 1999 to jointly build a $600 million fertilizer project at Ennaba northeast of Algiers. The Algerian treasury was to set up a joint investment fund with capital of $178 million with Kuwait to contribute 75% of the capital and Algeria the rest.

Algeria was to have begun LNG shipments to Greece during 1999. Algeria had 21 of the world?s 59 LNG liquefaction trains at the end of 1998.