Algeria, July 25, 2018

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Algeria in talks with oil firms to set up trading venture

* Sonatrach in talks with BP, Shell, Vitol and others * Oil price drop after 2014, rising fuel bill behind move * Boston Consulting Group advising on strategy - sources

Sonatrach is in talks with oil majors and trading firms to start a trading joint venture after the Algerian state energy company reached a deal this year to buy its first overseas refinery, its chief executive told Reuters.

A decision on forming the venture had been expected at the end of July but could be delayed by a month, two sources said.

“The foreign firm will have small shares in the trade joint venture,” Sonatrach CEO Abdelmoumen Ould Kaddour told Reuters in Algiers.

Potential partners, which have held talks with Sonatrach in recent weeks, include BP, Total, Royal Dutch Shell, Chevron, Repsol and Vitol , the world’s biggest independent oil trader, the sources said.

Vitol, BP and Shell declined to comment. Total, Chevron and Repsol did not immediately respond to requests for comment.

Sonatrach’s expansion into refining and trading reflects a shift among national oil companies that for decades focussed on producing oil and gas, while leaving marketing to third parties.

Sonatrach’s move to form a venture is one of several steps aimed at easing the burden of its hefty fuel import bill that tripled year-on-year in 2017 to a record $2.5 billion.

reuters



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