Algeria’s state-run oil firm Sonatrach signed a swap agreement with oil-trading Vitol Group to exchange crude for refined products that will cut back the country’s large fuel bill.
Sonatrach selected Vitol, the world’s largest independent oil trader, from among five companies that participated in a tender to ship its crude outside the country and have it sent back as refined fuel, chief executive officer Abdelmoumen Ould Kaddour said in Algiers, according to Bloomberg.
“We don’t want to continue to import $2 billion of fuel per year,” Ould Kaddour said.
Sonatrach, Algeria’s only domestic oil producer, produced about 1 million bpd of crude in December, according to the Reuters OPEC survey.
Separately, the North African country is also looking to buy a stake in a refinery overseas, Kaddour said, without giving more details.
The North African country, which needs to meet surging domestic fuel demand, paid $800 million for fuel imports in 2016 but that more than tripled in 2017 to a record $2.5 billion because of refining problems, according to a Sonatrach source quoted by Reuters.
Kaddour said Sonatrach would pay processing costs before bringing refined fuel back to Algeria.