Algeria's Sonatrach buys share of US ARCO in giant oil field

Algeria's state-owned Sonatrach oil company bought the share of the U.S. ARCO company at the giant southeastern oil field of Rod Al-Baghl.

Under an agreement signed on Tuesday, ARCO sells its share of 40% of the field to Sonatrach.

Sonatrach will pay $135 million to ARCO within 15 days and $50 million every year until 2004.

The Rod Al-Baghl is a giant field in which a total investment of $1.5 billion dollars was disbursed to start production.

Sonatrach and the US Amerada Hess signed on Monday two contracts for exploiting, developing and sharing two Algerian oil fields worth $600 million.

One of the contracts is worth $550 million. It allows the U.S. company share with the Algerian side over 25 years, the production in the fields of Qasi, Aqrab and Zouti.

The U.S. group will pay $55 million in exchange for entering the 1,000-square-kilometer project where it will dig 36 wells and lay a 75-kilometer gas pipeline.

The second contract stipulates a five-year prospecting of fuel in the region of Rod Al-Rouni Hasi Massoud. The project's first stage costs $29 million.

Sonatrach also signed Monday another contract worth $10 million with the Canadian Breakwater resources company for the exploitation of a zinc mine in the northeastern Wad Amizouz region.