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Algeria's Sonatrach says it discussed partnerships with Exxon Mobil

Algeria's Sonatrach says it discussed partnerships with Exxon Mobil
FILE PHOTO: An Exxon sign is seen at a gas station in the Chicago suburb of Norridge, Illinois, U.S., October 27, 2016. REUTERS/Jim Young -
Jim Young(Reuters)
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ALGIERS (Reuters) – Algeria’s state-owned Sonatrach held meetings with Exxon Mobil last week to discuss possible partnerships, a Sonatrach statement said on Monday, a week after it said it had talked with Chevron Corp.

Sonatrach gave no further details of the September 25 and 26 meetings but the energy producer has said it wants to boost output to increase revenues after a decline in prices hit its budget.

Some 95% of Algeria’s foreign revenue comes from oil and gas sales. Since energy prices dropped in 2014, its foreign exchange reserves have fallen to $72.6 billion from $178 billion.

The talks with foreign oil majors come at a sensitive time for Algeria after mass protests in February unseated veteran president Abdleaziz Bouteflika, creating a constitutional limbo that the army hopes to resolve with an election in December.

Algeria, a member of the Organization of the Petroleum Exporting Countries and a major gas supplier to Europe, has struggled to lift production to meet rising domestic demand, while foreign investors have often baulked at contract terms.

Sonatrach has a deal with Britain’s BP <BP.L> and Norway’s Equinor <EQNR.OL> to develop Algeria’s shale gas reserves, but industry sources said in March that talks with Exxon on developing a gas field had stalled.

Algeria is expected to amend its energy law to encourage foreign investors but without ending a rule that maintains majority local ownership.

(Reporting By Lamine Chikhi, editing by Angus McDowall and Kirsten Donovan)

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