Today a solemn ceremony of opening of OAO Gazprom official Representative Office took place in Algeria – the first in the African continent. The Representative Office is entrusted with powers for establishment and maintenance of continuous working contacts with the Algerian State Oil and Gas Corporation (ASOGC) Sonatrach at all directions of possible cooperation.

The Deputy Chairman of the Management Committee of OAO Gazprom Alexander Medvedev who spoke within the framework of the ceremony remarked that this event "reflects out commitment to development of long-term, equal and mutually beneficial cooperation with one of the leading world participants in the market of hydrocarbons and the largest energy company of Africa – Algerian State Oil and Gas Corporation Sonatrach – in a wide range of directions and specific projects. In addition, this corresponds to targets of the foreign economic strategy of OAO Gazprom facilitating development of the Company as a global energy company".

According to A. Medvedev, "cooperation between our companies in the territory of Russia and Algeria passes to the stage of implementation of specific projects. Geography of our potential cooperation is quite wide: this includes the Northern Africa, Africa to the South from the Sahara. Therefore, we provided our office in Algeria with the status of a regional Representative Office. We may also tell about similar interests in other regions as well, for example, in Latin America. To a large extent, we are ready to consider variants of joint activity in three major segments of the worldwide gas market: American, European and Asian".

A. Medvedev expressed his opinion that "it will be correct not to limit the potential of cooperation by only areas of extraction, processing and sale of hydrocarbons. Under today's conditions when a special role belongs to issues of energy saving, environmental protection, introduction of new types of energy resources into the world economic turnover, our companies have a lot of opportunities for taking joint efforts".

The ceremony of opening of the Representative Office was visited by the Vice President of ASOGC Sonatrach Shauki Rohal, the Ambassador of Russia in Algeria Alexander Egorov.

In the course of negotiations of Alexander Medvedev with Shauki Rohal the parties summarized results of the Memorandum of Understanding between OAO Gazprom and ASOGC Sonatrach and took the decision to pass to a new level of cooperation – implementation of specific projects.

They also discussed ways of activation of interaction of OAO Gazprom and ASOGC Sonatrach in the area of energy and confirmed mutual aspiration for development of relations in this area of bilateral cooperation. The main directions of forthcoming work were named as participation of two companies in oil and gas projects in the territory of Algeria, Russia, and third countries including probable asset swap transactions, improvement of commercial efficiency of export by use of swap operations for LNG/pipeline gas and LNG/LNG.

Possibilities for cooperation in the area of joint acquisition of energy assets in the territory of third countries, engineering and construction of facilities of pipeline infrastructure were considered as well.

Background:

Proved reserves of natural gas of Algeria amount to 4.58 trillion cubic meters (the first place in Africa after Nigeria –5.15 trillion cubic meters). The main part of reserves of natural gas is concentrated in the central and eastern parts of the country.

Proved reserves of oil in the country amount to 1.58 billion tons (the third place in Africa after Libya and Nigeria). In the energy balance of Algeria natural gas accounts for 62.5%, oil –34.5%, coal –2.5%. hydro energy –0.5%.

The Algerian State Oil and Gas Corporation Sonatrach deals with exploration, transportation and marketing of oil and natural gas, controls the main volumes of gas extraction and its wholesale trade.

In 2007 extraction of natural gas by the corporation amounted to 83 billion cubic meters. 24.4 billion cubic meters were supplied to the domestic market. Sonatrach imports natural gas by means of pipeline transport to Italy, Spain, Portugal, Tunis, Slovenia , in form of liquid natural gas –to France, Spain, USA, Turkey, Belgium, Italy, Greece and South Korea.

On the 4th of August of 2006 OAO Gazprom and ASOGC Sonatrach signed the Memorandum of Understanding.

The document, in particular, determines the following basic directions of further development of cooperation in the oil and gas area: in the area of geological exploration, extraction, transportation, development of gas transport and distribution systems, asset swap, reprocessing and sales of natural gas and oil in Algeria and in third countries.