Algerian Terror Sends Shocks Through Industry

The hostage attacks in Algeria have sent shockwaves through the hydrocarbon industry.

And gas supplies to European countries could already be feeling the effects.

The Financial Times reports that many oil and gas multinationals are evacuating personnel from the north African country, as full details of the toll of Thursday's counter-terrorism action by Algerian forces begins to emerge.

It is understood that dozens of hostages remain within the In Amenas gas production plant in eastern Algeria, over a thousand miles from the capital, Algiers.

In Amenas is co-managed by BP, Statoil and the Algerian state energy producer, Sonatrach.

A huge field, In Amenas produces 9bn cubic metres a year of gas – about 12 per cent of Algeria’s total output and 18 per cent of its gas exports, according to Société Générale. 

Snam Rete, operator of the Italian gas grid, said volumes of gas pumped into Italy from Algeria via the Mediterranean had fallen by about 10 million cubic metres a day to 60-65mcm/d - a troubling drop in the middle of winter.

BP, originally the principal foreign developer of the field, announced its first gas production there in 2006.

Algeria, a country of  919,595 square miles including parts of the Sahara Desert, is rich in both oil and gas, and managed to keep production going despite a long and bloody internal war in the 1990s. The current attacks are linked to anger over France's intervention into neighbouring Mali against Islamist rebels.

See also: Algerian Pipeline to Europe in Doubt