Tunisia's oil and gas sector has taken a few knocks over the course of 2011 as a result of the fallout from the Arab Spring, investment by energy companies both large and small continues to flow as firms keep a clear eye to the country's long-term potential. Many players operating in the sector have been unaffected by the unrest, and some are even doubling down, identifying opportunities to increase their exposure to a promising market as a result of the political transition. Upstream production in Tunisia is relatively modest, particularly when compared to the North African country's massive hydrocarbons-producing neighbors. Libya has the eighth-largest oil reserves and Algeria has the 10th-largest gas reserves in the world, but Tunisia's capacity is far more limited, with the world's 50th-largest oil reserves and 58th-largest gas reserves according to BP's 2011 “Statistical Review of World Energy.” Demand in Tunisia outstrips supply, and the nation imports both gas and oil, but plans are afoot to transform the country into a gas exporter by 2014, with the intention of pumping 1.5 billion cubic meters of gas to Italy via the Transmed pipeline. To achieve this, several field projects on and offshore are in the works, with an estimated $3.2 billion due to be spent on major upstream gas projects in the process, including: the South Tunisian Gas Projects, which will funnel gas from four southern concessions to Gabes; the development of the Hasdrubal offshore field, operated by UK-based BG Group; the Chergui field, handled by the UK's Petrofac; and the Maamoura and Baraka offshore fields, which are supervised by Italian major ENI. BG Group, one of the largest foreign investors in the country, itself announced in May that it intended to invest $300 million its Miskar and Hasdrubal fields. The investment will also allow for the drilling of new wells in the Sfax region. While the focus has largely been on Tunisia's gas sector, the oil segment – which churns out around 80,000 bpd according to BP's “Statistical Review of World Energy” – has been exhibiting signs of growth as well. In February, Austrian energy major OMV completed its $866 million purchase, first announced in January, of the Tunisian assets of the US firm Pioneer Natural Resources. OMV said that both firms' operations continued during the height of the protests at the beginning of the year. The deal will add 5800 tons of oil equivalent (toe) – 10 percent gas and the rest oil – to the Tunisian output of OMV, which produced 6500 toe from its two concessions in the south of the country. The firm's Tunisian production levels are also set to receive a boost from the Durra field, which Indonesian partner Medco said in early May would begin production of around 3000 bpd from June. OMV owns a 30 percent stake in the field alongside Medco, which holds a 20 percent stake, while ETAP has the remainder. BM
