Baker Hughes, Sonatrach invest in new manufacturing facility in Algeria

Baker Hughes, a GE company (BHGE), and Algeria’s Sonatrach have announced the creation of a 20,000 sqm manufacturing facility in Arzew Industrial Zone, aiming to strengthen the country’s position in the upstream oil and gas market to meet local demand.

Sonatrach hosted a signing ceremony announcing the creation of the facility in Algiers in the presence of the Minister of Energy, Mustapha Guitouni, Baker Hughes informed on Thursday.

Sonatrach and BHGE have formed a new company in which Sonatrach and BHGE have 51% and 49% ownership respectively, underscoring a major commitment to deliver manufacturing capabilities in Algeria to the highest international standards. The project draws on BHGE’s experience in oilfield equipment manufacturing and leverages the company’s global and local scale to provide production solutions from the facility, which is anticipated to be operational in December 2019.

Through an initial combined investment of $45 million, the new company will provide manufacturing, assembly, and maintenance for various types of oilfield equipment including wellheads, xmas trees, BOPs and valves, establishing a major base to fulfill Algeria’s increased domestic upstream requirements with the potential for future exports. The facility will also add training capabilities and offer competency development programs for more than ~200 engineers during the first 7 years.

According to BHGE, in addition to reducing dependence on imports, the facility will boost economic competitiveness and strengthen the local supply chain by helping to create 200 local jobs in Oran’s Arzew area, a substantial number of indirect jobs serving the sector, and the development of qualified industrial SMEs.

Abdelmoumen Ould Kaddour, CEO of Sonatrach, said: “The creation of this company is a breakthrough in Sonatrach’s integration chain, with a view to better controlling costs and deadlines to ensure the transfer of know-how and technologies through the diversification of its portfolio of goods and services.

“It will contribute to strengthening the national industrial fabric and the creation of a network of national subcontractors, certified to international norms and standards. It will also consolidate the relationship between Sonatrach and BHGE, and boost it to a partnership of excellence.”

Rami Qasem, President and CEO of BHGE Middle East, North Africa, Turkey and India, said: “Through the delivery of high end oilfield products and services, BHGE reaffirms its focus on driving further productivity for our customers across the entire oil and gas value chain. We are honored to work with Sonatrach and play an important role in supporting the country’s ambition to be among the key upstream manufacturers in North Africa. The combined effort underscores our commitment to help fuel the economy by improving economic competitiveness, developing skilled talent and delivering the highest manufacturing standards with plans for future exports. The new company will not only revitalize Algeria’s local supply chain, but also position the country as a key manufacturer in industrial equipment.”