UPDATE 1-Oil price lifts Algeria's 2017 energy export earnings

By Hamid Ould Ahmed

ALGIERS, March 27 (Reuters) - Algeria's 2017 energy exportearnings rose 18.42 percent to $33.06 billion as higher crudeoil prices offset lower volumes, a central bank report showed onTuesday.

That helped reduce the North African country's trade deficitby 28.9 percent to $14.33 billion, it said.

Oil and gas export volumes fell by 2.88 percent to 108.48million tonnes of oil equivalent, the report showed.

The OPEC member is a major gas supplier to Europe and reliesheavily on revenue from energy exports. They account for 95percent of its total exports and 60 percent of the state budget.

However, foreign companies have largely stayed away inrecent years, citing bureaucracy and tough contract terms,causing a stagnation in Algeria's oil and gas output.The energy sector grew 7.7 percent in 2016 but itsperformance fell in 2017, the bank said, without providingdetails.

To improve output, the government has started draftingamendments to the energy law, vowing to introduce moreincentives for foreign investors.

It is also in discussion with foreign firms, including BPand Anadarko, to help exploit shale gas reserves.

Growing consumption levels in the nation of 41 millionpeople has also contributed to a rise in its import bill forrefined products, which rose 53.8 percent to $1.90 billion, thereport said.

Algeria has been modernising its five refineries and plansto build new ones with the aim of meeting domestic demand andexporting the surplus.

It has also signed a deal with the world's largest oiltrader Vitol to refine quantities of its crude oilabroad.

Algeria's non-energy imports fell by 1.4 percent in 2017,the central bank said, reflecting restrictions aimed at reducingspending.(Reporting by Hamid Ould Ahmed; editing by Ulf Laessing andJason Neely)

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