BY: Hana SAADA

 

ALGIERS – Following his December 2019 election, President of the Republic, Mr. Abdelmadjid Tebboune launched a series of all-out reforms, which led to the adoption of a new constitution in December 2020 and the election of a new parliament in June 2021. Besides, Mr. Tebboune has declared his intention to focus on economic issues. Since then, New Algeria has embarked on a very ambitious reform program of its legal framework to boost all-around investments with the aim of achieving economic recovery. This latter is being achieved at different levels thanks to the judicious and far-sighted policy adopted by the country’s high authorities, under the leadership of the President of the Republic, Mr. Abdelmadjid Tebboune, Commander-in-Chief  of the Armed Forces, and Minister of National Defense.

 

Aware of the fact that the economic recovery would not be achievable on the ground without energy security, a new law on hydrocarbons was ratified, addressing critical deficiencies of the former 2005 Hydrocarbons Law and related tax regimes.

 

Indeed, Algeria’s Hydrocarbon Law No. 19-13 of 11 December 2019, had the primary goal of spurring investment in the hydrocarbon sector. Prior to it, Algeria had witnessed a stagnation in terms of attracting significant hydrocarbon investments due to a range of factors, including the country’s oil and gas regulatory and fiscal framework, the slowdown in exploration efforts, particularly in a context marked by a structural and potentially durable drop in crude oil prices, as well as the increased competition among producing countries to attract new investors.

 

Sonatrach looks to new law to galvanise investment

 

Since the ratification of the law, New Algeria succeeded to reverse declining foreign upstream investments through improved contract terms and tax rates. It has created a more structured petroleum framework and a more favorable tax regime for investors, consolidating its role in the oil and gas markets at the regional and international levels. Under the new legislation, the tax burden on state-owned oil firm Sonatrach and its international partners has been cut from 85% to around 60%-65%, as announced by Toufik Hakkar, the CEO of the company, who further explained that the significant fall in the tax burden was due to the reduction of three main taxes: the production levy; petroleum income tax (TRP); and complementary income tax (ICR).

The new law also removes customs duties and taxes on most imported E&P equipment.  In addition, the reformed law provides VAT exemptions for professional activities in the sector.

Complementing the reduction of taxes, the new Hydrocarbons Law simplifies and improves contract agreement types for E&P as well as contracting procedures.  Firstly, the reforms place Sonatrach, the national oil company, as the Algerian party to contracts, wholly eliminating ALNAFT, the former hydrocarbons contractual regulator.  Secondly, IOCs can enter into one of three contract agreement types, up from one.

• Participation Agreements (PA):Sonatrach holds at least 51% stake,
• Production Sharing Agreements (PSA): IOCs get a share of produced oil/gas, in consideration for its investment,
• Risk Service Agreements (RSA): IOCs receive a fee per barrel produced above a minimum level of production.

 

As a results of the aforementioned reforms, Algerian state producer Sonatrach has managed to expand production, renegotiate prices, and sign new export deals, resulting in record production levels and a major financial windfall. A small comparison with the past showcases how the number of the concluded contracts has multiplied. Despite the four amendments to the 2005 law (in 2006, 2013, 2014, and 2015), this latter still featured high taxes and duties on exploration and production (E&P) activities, as well as unclear contract-sharing agreements with Sonatrach, the national oil company. Subsequently, Algeria repeatedly failed to attract foreign investors.  Statistics show that since 2010, the number of new contracts signed dropped to an average of only two signed contracts per year.

In response to this problematic situation, the New Law revived energy activity, attracting foreign investors. Multiple deals have been inked with major oil firms in Italy, Russia, China, Spain, France, among others, by the state-owned oil firm Sonatrach, considered as the locomotive of the national economy and an integrated group with an international dimension, operating on more than 150 oil and gas fields and having 22 000 km of pipelines, four natural gas liquefaction complexes with a capacity of over 50 million cubic meters per year, six refineries in Algeria with a capacity of over 30 million tonnes/year and major other infrastructures (gas pipelines, ships, port facilities) allowing it to maintain its export levels while ensuring the supply of the national market.

According to Salim Fergui, Director of Reporting & Project DC P&L at Sonatrach, the company concluded, during the first half of 2021, 1038 contracts with national and international companies for an amount of 430 billion dinars or 3.25 billion dollars 45% of these contracts, noteworthy, were concluded in the supply market, 36% in services, 15% for works, 3% for studies and advice and 1% for EPCs.

Of the 1,038 contracts concluded during the first half of 2021, said Mr. Fergui, 211 were signed with international companies, against 827 contracts signed with national companies, i.e. more than 80%, for an amount of 219 billion dinars. 286 contracts were concluded with public companies and 541 contracts with private ones.

As for the 2020 financial year, Sonatrach concluded 2010 contracts for an amount equivalent to 389 billion dinars (3.07 billion dollars).

In detail, the same official indicated that 42% for procurement and supply contracts (844 contracts), 36% are service provision contracts (714 contracts), 18% for works contracts, 2% for studies and consulting services, and 2% of EPC contracts.

On another note, Algerian state firm Sonatrach operates in several countries – Libya, Mali, Niger and Tunisia – where exploration work has been initiated, sanctioned by several oil and gas discoveries in Libya and Niger.

With regards to upstream segment, Sonatrach and the National Oil Corporation (Libya) signed in Tripoli (Libya) a memorandum of understanding to strengthen their partnership in the oil and gas sector. The protocol aimed to resume the activities of the national company in Libya in order to fulfill its contractual obligations and begin to develop the discovered fields.

On February 4, 2022 in Niamey (Niger), the updated production sharing contract for the Kafra block was also signed with the Ministry of Petroleum, Energy and Renewable Energies of the Republic of Niger. The purpose of updating this contract was to allow a better assessment of the hydrocarbon potential of the Kafra block following the discovery of oil due to exploration drilling. Sonatrach is also present in Peru.

In the downstream segment, Sonatrach is active in the refining in Italy and petrochemicals and regasification in Spain. Also, a partnership of a petrochemical project in Turkey for the production of polypropylene is under development phase.

As such, in October 2021, the company inked three contracts with the Turkish partner, Rönesans, to produce high-quality plastic polypropylene in the city of Ceyhan. This strategic project, costing 1.7 billion dollars, in which Sonatrach has a 34% stake, will be supplied with raw material (Algerian propane) under a long-term contract based on international market prices.

The national company is also present in the trading of gas and petroleum products in Spain and the United Kingdom.

In the medium term, it intends to continue fulfilling its contractual commitments on the exploration blocks it holds in Africa and is working to strengthen its presence on this continent, offering services, particularly in the fields of geophysics, drilling, project implementation, distribution of petroleum products and training.

 

With regard to export levels, a significant increase of 18% between 2020 and 2021 was recorded, which made it possible to increase the quantities exported from 80.7 million TOE at the end of 2020 to 95 million in 2021. In terms of exports to Europe, being the natural market of choice for Algerian energy products. Algeria, which is Africa’s leading exporter of natural gas and the 7th largest in the world, contributes 11% of the continent’s total gas imports.

The European market is supplied via its network of pipelines which combines a shipping capacity of 42 billion cubic meters of natural gas and in liquefied form thanks to a production capacity of more than 50 million cubic meters of LNG and a fleet of 6 LNG carriers.

Sonatrach maintains historical commercial relations with European partners, notably Italian, who consider the national hydrocarbon company to be a reliable supplier and an important and strategic player on the gas market.

Also, Sonatrach’s contribution could extend to countries not served by gas pipelines linking Algeria to Europe through LNG sales. Nevertheless, these top-ups in natural gas and/or LNG are dependent on the availability of surplus volumes after satisfying the increasingly significant domestic market demand and its contractual commitments to its foreign partners.

 

As statistics, the efforts made by the company resulted in a qualitative leap, both in terms of volumes and financially.  Algeria has acquired significant capacities in terms of hydrocarbon development, now having large industrial infrastructures in the field of oil refining, petrochemical industries, transport via pipelines and export, in particular through pipelines linking our country to Europe, in addition to natural gas liquefaction capacities and LNG carriers.

 

Year after year, promising results are multiplying. Thus, in 2021, the national firm achieved an export turnover exceeding 35 billion dollars, compared to 20 billion dollars in 2020, due to a notable increase in the primary production of 14% for hydrocarbons and 23% for gas.

 

In terms of production, it reached 175.9 million tonnes of oil equivalent (TOE) in 2020, before amounting to 185.2 million TOE in 2021, and 190.7 million tonnes in 2022, while the company’s objectives for the end of the current year stand at 200 million tonnes of oil equivalent (TOE) per year thanks to the implementation of the development program through the exploration operations, the revaluation of the reserves in place and the commissioning of several projects, including the Hassi R’mel boosting, which started in two phases in 2020 and 2021, and the gas fields of Tinhert and the outskirts of Gassi Touil.

The contribution of these projects enabled the company to satisfy the national market, whose sales totaled 64 million tonnes of oil equivalent (TOE), up 8% compared to 2020, and to raise our export level to 95 million tonnes of oil equivalent (TOE) to meet sustained demand throughout 2021.

As for the volume of production at the level of the refining units, the oil company announced, in its annual report for 2021, stability of the order of 27.9 million TOE in 2021, against 27.8 million in 2020.

Regarding the production of liquefied natural gas (LNG), Sonatrach made a remarkable advance of 14% in this area last year, as the level of production reached 26.3 million m3 in 2021 compared to the quantity produced in 2020 (23.1 million m3).

The oil group’s report also stressed that it had covered the needs of the national market, estimated at 64 million TOE in 2021, an increase of 9% compared to 2020.

Noting that all the demand for gasoline and diesel were met in 2021 as no quantity of fuel was imported. Imports of petroleum derivatives were reduced to nearly 70% in 2021, going from 859,000 TOE in 2020 to 255,000 tonnes in 2021.

 

On another level, Sonatrach installed, in 2021, the Ethics Committee, made up of a president accompanied by 04 members and a Secretariat. This Committee is responsible for implementing the Sonatrach code of ethics accompanied by the rules and procedures applicable in this context. The committee is also involved in practices related to Sonatrach’s commitments towards stakeholders, in particular its employees and business partners, as well as the environment.

Regarding the supply of energy sources to the population, more than 99% of households have been connected to electricity and 65% to natural gas.

Attached to consolidate its social policy, Sonatrach has launched, in September 2022, in coordination with the local authorities, a social development program for the benefit of the inhabitants of the gray areas in different provinces of the country. To this end, several agreements were signed to finance projects for connecting neighborhoods and residential complexes to electricity, the purification of the main canals of the sewerage networks, and the construction of public facilities.

In addition, Sonatrach aims through this investment plan to carry out 121 development projects in 37 wilayas, whose development is one of the most important priorities of the social policy of the State.

 

In a related context, and in application of the directives of the President of the Republic to provide drinking water to citizens in a sustainable manner, the national hydrocarbon company launched, during the year 2021, four urgent seawater desalination projects in continuation of its efforts which previously enabled the completion of 11 seawater desalination plants. The total additional capacity produced by these four plants will reach 350,000 m3 per day, spread over the provinces (Wilayas of Algiers, Tipasa and Boumerdès.

In 2022, the Algerian Energy company “AEC”, a subsidiary of the Sonatrach Group, set up the sites for the construction of three new seawater desalination stations in the provinces of Boumerdes, Bejaïa and El Tarf.

As for the statistics of 2022, the importance of 2019 legislation became apparent this year with the signing of a $4 billion multinational oil and gas contract for a site in southeastern Algeria. The agreement brings together Sonatrach, Italy’s Eni, the US-based Occidental Petroleum Corporation, and the French company Total. This agreement followed several deals inked with foreign partners.

Also, President of the Republic Abdelmadjid Tebboune installed, in April 2022, the members of the High Council of Energy, instructing them to set out the guidelines for national energy policy, the country’s energy security and domestic market regulation.

 

This year is also marked by the Algerian-Italian partnership as Algeria announced that it had increased the volume of its gas deliveries to Rome through Transmed, the gas pipeline linking Algeria to Italy, via Tunisia. Since the beginning of the year, 13.9 billion cubic metres of gas have been delivered to the Italian capital, an increase of 113% compared to 2021.

In a related context, the Government’s General Policy Statement, presented, last month, by the Premier Aimene Benabderrahmane to Parliament’s houses notes  the exploration of 22 wells in mature basins (47% of the annual program) and 6 wells in emerging and frontier basins (36% of the annual program), the finalization of the development of the Gassi Touil gas fields towards Rhourd Enous, the start of crude oil shipments from the Hassi Bir Rekaiz perimeter, the completion of the development of the Tinhert gas field towards Chanet, the construction of the 4 HMD LPG train, the launch of the construction of the MTBE complex in Arzew, establishment of an additional electricity capacity of 3,290 MW, reinforcement of the transport and distribution networks by 5,924 km and 1,780 stations for electricity and 556 km and 60 stations for gas,  as well as the connection of 498 investors and 18,826 farms to electricity and 205 investors  to gas.

Regarding the mines, the statement refers to the finalization of 15 geological maps, while 23 others are in progress, in addition to the allocation of 396 exploration and mining permits as well as the advance recorded in the strategic mining projects of integrated phosphate (Tébessa), iron deposit of Gara Djebilet (Tindouf) and that of zinc-lead of Oued Amizour (Bejaia). It also reports on the receipt of a quantity of 21,812 tonnes of gold ore at the ENOR counter and the production of 137.9 kg of gold.

In another report on the group’s achievements during the first 5 months of the previous year (2022), the company announced an export turnover at the end of May 2022 of 21.5 billion dollars, against 12 .6 billion at the end of May 2021, up 70%.  As for the primary production of hydrocarbons, it reached 79.2 million tonnes of oil equivalent (TOE) at the end of May 2022, up 2% compared to the achievements at the end of May 2021. The volume of hydrocarbon sales (exports + National market) amounted to 67 million TOE, up 0.3% compared to the achievements at the end of May 2022, while imports of petroleum products reached a volume of 95,000 tons, down 14% compared to the same period.

 

An investment of around 8 billion dollars/year on average has been mobilized by the public group during the last three (3) years, of which more than 70% in exploration-production.

Thus, by 2026, Sonatrach intends to invest 40 billion dollars in exploration, prospecting and production.

As to petrochemical complexes, Sonatrach currently has (7) seven petrochemical complexes for processing on a national scale, which has more than 3,000 permanent employees, including two complexes 100% owned by the group, and five others created through partnerships.

For the Director of the Petrochemical Exploitation Division, Hacène Lama, these complexes made it possible to recover nearly 5 billion m3 of natural gas during the year (2022) and export more than 1 billion USD in petrochemical products in 2019. The strategy adopted in the short and medium terms would consist in concretizing a program of realization of 6 petrochemical development projects within the framework of the implementation of the hydrocarbon development projects drawn up by the government in order to establish a petrochemical industrial fabric in Algeria and reduce the import bill for petrochemical products. Noting that Sonatrach, realized, in this regard, 3 projects by its own, and 3 others within the framework of the partnership with foreigners. This is the MTBE (Methyl tert-butyl ether) project, used as an additive to improve the production of unleaded petrol at refinery level and, thus, renouncing its importation. The launch of this project took place recently at the level of the industrial zone of Arzew. The second project concerns the construction of a production unit for linear alkyl-benzene (LAB) in Skikda, used in the manufacture of detergents with a production capacity of 100,000 tonnes/ year. This figure will reduce the import, placing Algeria as an exporting country of these products.

The third project concerns the naphtha and liquefied petroleum gas (LPG) cracking complex with a production capacity of 1 million tonnes/ year, which will be carried out in the Skikda industrial zone.

The development of petrochemicals will enable Sonatrach to develop the hydrocarbon products produced locally in its complexes and refineries and save money in foreign currency. Thanks to this strategy, Sonatrach released, in 2021, nearly 170 million USD for the import of MTBE which improves the quality of unleaded gasoline.

 

2022 year of discoveries for Sonatrach; Algeria’s “golden goose”

 

 

Sonatrach made a series of new hydrocarbon discoveries that can increase Algeria’s reserves and strengthen its position internationally as a reliable supplier of hydrocarbons, in a global context marked by a strong demand. Between 2020 and 2022, no less than 35 new hydrocarbon discoveries were recorded, including 34 discoveries in Sonatrach’s own effort.

In the first quarter of 2022, Sonatrach made three new discoveries of oil deposits, including a major discovery at the Touggourt perimeter, with a deposit estimated at one billion barrels. In partnership with the Italian ENI, the Sonatrach group announced, last March, another major oil discovery in the Zemlet El Arbi research perimeter, in the Berkine basin.

Sonatrach announced, last June, the discovery of a significant gas condensate deposit (Lias Carbonaté “LD2” deposit) in the Hassi R’mel field in the Algerian Sahara, the exploitation of which will begin as of November, with a production capacity of 10 million cubic meters per day, as declared by the project manager, Loucif Youcef. The deposit is estimated to have between 100 and 340 billion cubic metres of gas condensate. These volumes constitute one of the largest revaluations of reserves in the last 20 years.

In July, Sonatrach announced three other discoveries, including two gas discoveries based on its effort, and another oil discovery in partnership with the Italian company Eni. In the Illizi basin, Sonatrach made a gas and condensate discovery with its In Ekker Sud West-1 exploration well in the In Amenas 2 licence. Sonatrach also drilled a successful delineation well in its Taghit licence in the Bechar basin, opening up what appears to be a new gas play. The third discovery — made by Sonatrach and partner Eni in the prolific Berkine basin — will also be fast-tracked to production.

 

In August, another important oil discovery was made by the State-run oil firm Sonatrach at Haasi Illatou in the region of Sbaa (wilaya of Adrar), with an estimated output of 151 million barrels, a very encouraging result. This discovery comes 28 years after the last discovery of oil in Foukroun in the perimeter of Sbaa.

 

 

Algeria charts a path for renewable energy sector development

 

 

Investment in the renewable energy is of utmost importance, being one of the main factors to achieve energy security, and a geostrategic alternative in future energy thought.

In an interview with Der Spiegel in 2021, Algeria’s President Abdelmadjid Tebboune noted that the country had a “great deal of potential on renewable energies,” suggesting that ”with German help, [Algeria] could supply Europe with solar energy.”

A leading producer of natural gas and liquefied natural gas, Algeria also has ambitious renewable energy and energy efficiency programs that promise to expand its energy resources and support sustainable development. The country, with the Sahara desert covering 86 percent of its area, enjoys both the potential and the incentive to maximize its natural resources and become a renewable energy leader. It has a year-round solar energy capacity, enabling it to be ranked 21st in terms of potential solar energy capacity.

As such, and amid oil and gas price volatility and increasing domestic electricity demand, the sun rose on Algerian solar energy, as the country is making notable progress in the development of its renewable energy sector, aiming to becoming a global competitor in the renewable energy marketplace worldwide. Accordingly, the government has set a target of deriving 27 percent of electricity generation from renewable sources by 2030 and increasing generation capacity from renewables to 37 percent by the same year.

Algeria set a renewable energy target of 22,000 MW of installed renewable capacity by 2030, with a growth rate of 1000 MW/year. Furthermore, around 1000 MW of off-grid renewable energy installations are expected to be put on stream by 2030. A new law on energy transition is being prepared.

 

These targets are part of Algeria’s National Program for Energy Transition represented in “Vision 2030”, to achieve sustainable energy security. This project emerged, taking into account the issue of the environment and its sustainability and openness to clean areas that contribute to protecting the ocean, developing the green economy and achieving climate justice, may represent the world’s most ambitious government-led competitive renewable energy procurement program.

 

A ministry dedicated to renewable energy

 

The government’ sustainable steps have begun to bear results, with a number of promising solar plants scheduled. Noting that Algeria held its first tender in 2019, which sought 150 MW of new renewable energy capacity. To reinforce the energy transition moving forward, a commission charged with developing a national strategy for RE transition (the Cerefe) was created at the end of 2019.  Furthermore, Algeria established the Ministry of Energy Transition and Renewable Energy (METRE) in June of 2020. In late 2021, the METRE published its notice of invitation to tender for 1,000 MW of solar power capacity which is expected to generate investments of around $800m. Recently, the Algerian company Zergoun Green Energy commissioned its solar panel production plant in Ouargla. The plant, which has a production capacity of 180 MW of solar panels, will equip the clean energy plants being developed in Algeria. As an overall, Algeria already has three operational solar panel production facilities totaling 260 MW of total output.

 

To support these efforts, the nation has revised tender provisions, such as the removal of the 51/49 rule which required Algerian businesses to own a majority stake in projects. To help ensure Algerian participation in the projects, a joint venture was created between Sonatrach and Sonelgaz, the nation’s two state-owned energy companies. Known as Shaems, the joint venture company will be permitted to own up to a 25% stake of tendered projects.

Also, preparation on new legislation for the transition into green energy as it targets supporting the transformation in all aspects is underway, according to the country’s former minister of renewable energy Benattou Ziane.

 

In addition, several meetings took place with foreign partners, from, among others, Indian, Britain, Belgium, Japan, Turkey, tabling renewable energy transitions’ strategies and partnerships, being a strike force of new national economic paradigm.

 

Renewable energy: Algeria had Africa’s third largest installed capacity in 2020

 

Algeria had Africa’s third largest installed capacities in renewable energy with 0.5 gigawatts (GW) in late 2020, said the REN21’s Renewables 2021 Global Status Report.

 

Other clean energies

 

Algeria also has 13 hydropower plants, representing its third-largest energy resource after natural gas and oil. Most of Algeria’s hydropower plants are located in the northern parts of the country that benefit from high levels of rainfall.

 

Algeria has tremendous wind energy and geothermal potential as well. Its wind potential is forecast to be about 35 TWh/year. It built its first wind farm at Adrar, with an installed capacity of 10 MW and with funding from the state-utility Sonelgaz. And a series of thermal springs in north central Algeria in locations such as Ouarsenis, Biban and Kabylie hold promise for geothermal plants.

 

Sonatrach: Hekkar fifth best CEO in the Middle East

 

Due to these achievements, the Chief Executive Officer of the national hydrocarbon company Sonatrach Toufik Hekkar was ranked, by the specialized magazine “Forbes Middle East”, fifth best CEO in the annual list of the most powerful managers of the Middle East for 2021, in recognition of their significant contribution to the economies of the region. And in 2022, he gained one spot, ranked 4^th by the same magazine as he managed to strategically lead the wheel of growth and development in the country despite the “Coronavirus” pandemic.

 

Oil Giant Sonatrach snatches International titles:

Ranking “Jeune Afrique” 2021: Sonatrach ranked first African company

Sonatrach, dubbed by President Tebboune as one of the powerful levers of the national sovereignty, grabbed multiple international titles. In 2021, Sonatrach was ranked the first African company, according to the annual ranking of the best 500 African companies carried out by the magazine Jeune Afrique, thus, remaining the leader of companies operating in Africa due to the significant turnover and profits achieved in a difficult environment marked by the decline of all leading companies in the continent.

 

The Economist: State-run oil firm Sonatrach among 15 best oil companies worldwide

 

In a study carried out in 2022 by the British specialist magazine “The Economist”, the oil giant Sonatrach was ranked among the world’s 15 largest oil companies, ranking 12th in terms of oil and gas production. Sonatrach, thus, outperforms major oil companies, such as; Qatar Energy and the Mexican company Pemex.

 

The best is yet to come. Sonatrach Group is engaged in negotiations with several foreign partners with the aim to ink several contracts by the end of 2022.

A coincidence? Certainly not. This major player in the oil industry draws its strength from its ability to be a fully integrated group across the entire hydrocarbon value chain. Its management has a lot to do with it. The appointment of Toufik Hakkar was an asset as he, given his rich career at the firm, restored the company’stability, desired by the President of the Republic, Abdelmadjid Tebboune.

Oil exploration: Algeria tops Arab countries, says OAPEC

 

The monthly report of the Organization of Arab Petroleum Exporting Countries (OAPEC) also ranked, in October 2022, Algeria, an OPEC member since 1967, at the top of Arab level in terms of oil and gas exploration during the first months of 2022. In the same context, the Director of the Exploration Department of Sonatrach, Badji Al-Rabie, revealed to “Morning Guest” program on Radio Channel One, that Sonatrach group managed, during this year, to achieve 11 discoveries in the oil and gas fields across the country, nine of them thanks to its own efforts and two others in partnership with the Italian energy company “ENI”, specifying that the exploration investments carried out by the national hydrocarbons firm in the field of oil include the offshore area, including the western Mediterranean.

 

To conclude, energy reform, emblematic of the country’s independence and sovereignty, was one of the pledges made by the President of the Republic, Abdelmadjid Tebboune on his election in 2019. This eventually took the form of new frames that spurred investments in Algeria’s oil and gas sector by IOCs.  The sector, headed by Minister of Energy and Mines, Mohamed Arkab, operating on the instructions of President Tebboune, which set out the guidelines for national energy policy, made it possible, despite the negative impact of the health crisis, to achieve positive results, particularly in terms of concluding contracts with foreign partners, exploration and renewal of reserves, commissioning of new gas projects and infrastructures and export, for the first time in the decade, of diesel and gasoline. Sonatrach has also initiated major projects and multiplied the implementation of structuring projects. These results culminated in profound and beneficial changes in the production and exploitation of hydrocarbons, and the development of petrochemicals.

These projects constitute encouraging indicators for the company which approaches the future’s challenges with serenity. Today, the company continues to deploy tireless efforts to meet the challenges of today and tomorrow, in particular those linked to the mobilization of new reserves, the development of refining and petrochemicals as well as the participation in the country’s future economic and energy development. It has allocated for this purpose a financial envelope of 11 billion usd, under its five-year plan 2022-2026, as indicated by the director of the Methods and Operations Division of the Refining and Petrochemicals Activity (RPC), Miloud Amara. In parallel, CEO Toufik Hakkar announced, last January, that the company would invest $40 billion in oil and gas exploration, production, and refinement between 2022 and 2026.

 

Accordingly, the firm eyes, among other things, to mobilize new oil and gas reserves, through several field development projects, such as; Touggourt, Hassi Bi Rekaiz and Berkine Sud for oil, Isarene, TFT and the fields of South- West for gas, and to develop refining capacities, through the construction of a new refinery at Hassi Messaoud and a fuel conversion unit at the Skikda refinery. The plan also provides for the development of petrochemicals, mainly the Methyl Tert Butyl Ether (MTBE) production unit in Arzew, the Linear Alkyl Benzene (LAB) production unit in Skikda and the polypropylene production complex in Arzew, in partnership with Total Energies. In addition to these projects, Sonatrach will continue the discussions initiated with its partners on major projects in the upstream and petrochemical sectors.

As for the renewable energy, Algeria is well positioned to play a major role in the energy transition of North Africa and beyond. It has launched ambitious plans to deploy large-scale renewable generation projects and local manufacturing capacity.

In view of the foregoing explanation, the energy sector, Algeria’s all-risk insurance and the lifeblood of its economy, has proved that it is the launching pad for New Algeria which aspires to rise to the rank of powerfully industrialized nations and achieve energy security, considered as one of the most important challenge for world countries, and a fundamental bet of the comprehensive national security bets given that it represents one of the main pillars of sovereignty. Based on the analyze of the five dimensions; Availability, Affordability, Applicability, Acceptability and Governance, we notice that the sector is moving on the right track, covering domestic consumption and guarantying exports abroad, thanks to Algeria’s enormous natural resources. It has  maintained and consolidated its role as a locomotive of the national economy with the national petro-gas company Sonatrach, being the shield that protects Algeria after its armed forces, militants and citizens as stated by President Tebboune. “Sonatrach is one of the powerful levers of national sovereignty.  It is the shield that protects Algeria after its armed forces, activists and citizens”, indicated Abdelmadjid Tebboune.