Hydrocarbons
What is Algeria's economy reliant on?
Algeria
Algeria, whose economy is reliant on petroleum, has been an OPEC member since 1969. Its crude oil production stands at around 1.1 million barrels/day, but it is also a major gas producer and exporter, with important links to Europe. Hydrocarbons have long been the backbone of the economy, accounting for roughly 60% of budget revenues, 30% of GDP, and over 95% of export earnings. Algeria has the 10th-largest reserves of natural gas in the world and is the sixth-largest gas exporter. The U.S. Energy Information Administration reported that in 2005, Algeria had of proven natural-gas reserves. It also ranks 16th in oil reserves. Non-hydrocarbon growth for 2011 was projected at 5%. To cope with social demands, the authorities raised expenditure, especially on basic food support, employment creation, support for SMEs, and higher salaries. High hydrocarbon prices have improved the current account and the already large international reserves position. Income from oil and gas rose in 2011 as a result of continuing high oil prices, though the trend in production volume is downwards. Production from the oil and gas sector in terms of volume, continues to decline, dropping from 43.2 million tonnes to 32 million tonnes between 2007 and 2011. Nevertheless, the sector accounted for 98% of the total volume of exports in 2011, against 48% in 1962, and 70% of budgetary receipts, or USD 71.4 billion. The Algerian national oil company is Sonatrach, which plays a key role in all aspects of the oil and natural gas sectors in Algeria. All foreign operators must work in partnership with Sonatrach, which usually has majority ownership in production-sharing agreements.