Companies scrambling to tap into Algerian oil and gas

Emirati energy company Dragon Oil and its Italian counterpart Enel said Wednesday they were awarded two contracts for oil and gas exploration in Algeria.

"This achievement represents a strategic move for Dragon Oil to establish a footprint in another North African country known to be rich in hydrocarbon resources and opportunities," Dragon Oil Chief Executive Officer Abdul Jaleel al-Khalifa said in a statement.

Algeria and Enel will work together in the Tinrhert Nord and the Msari Akabli license areas.

Dragon offered no estimate of the reserve potential in the license areas in Algeria. In a separate statement, Enel said it's the third-largest investor in the Algerian natural gas sector.

Some of Enel's legacy operations in the country could be producing 100 billion cubic feet of natural gas per day by early 2018.

Norwegian energy company Statoil and its partners at Shell said this week they were examining the shale natural gas potential in Algeria.

Algeria has the tenth-largest natural gas deposits in the world and is the third-largest gas supplier to Europe. With Europe looking to diversify an energy sector dependent on Russia, the companies said any shale from Algeria could be an important part of energy security ambitions.