MADRID (Thomson Financial) - State-owned national energy firms of producer nations such as Algeria's Sonatrach are now well equipped to compete with multinational giants in foreign markets, Algeria's energy minister said on Tuesday.
'There is no reason why Sonatrach should not explore in other countries. Sonatrach has a lot of money,' he said at the World Petroleum Congress, a major industry gathering, in Madrid.
'National oil companies are no longer confined to their own countries,' he said, giving Malaysia's Petronas and China's CNPC and Sinoc as examples.
'BP and Total were at one time actually national oil companies and now they are international oil companies,' added Khelil who is also president of the 13-nation Organization of Petroleum Exporting Countries (OPEC).
'I guess we are following the same trend. We have now the resources, experience and technology, and we want Sonatrach to apply that to other countries.'
With oil prices at record highs, state-owned national energy companies have invested in new technology and other assets which is allowing them to compete more actively against the oil majors.
Khelil also said Sonatrach would also avoid signing long-term supply contracts due to difficulties in renegotiating prices.
'One of the issues of long-term contracts is the difficulty we have had to renogotiate the terms of the contract and that creates instability in the relationship,' he said.
Sonatrach and Madrid have been locked into a dispute over the Algerian firm's plans to increase the price of gas to Spain under a long-term deal reached between the two sides in 2007. tf.TFN-Europe_newsdesk@thomsonreuters.com jlc COPYRIGHT Copyright Thomson Financial News Limited 2008. All rights reserved. The copying, republication or redistribution of Thomson Financial News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Financial News.