Algeria: Sonatrach's latest scandal

On 30 July we reported that Sonatrach’s CEO, Abdelhamid Zerguine, had been sacked and replaced by Said Sahnoun, the former Vice President for Production. Sahnoun will be Sonatrach’s ninth CEO since President Abdelaziz Bouteflika first took office in 1999 and the fifth in the last four years.

Although no reasons have been given for this surprise move, which adds to the reputation of Sonatrach’s management instability, it had been hypothesised that the open conflict between Zerguine and Energy Minister, Youcef Yousfi, over divergent visions for the exploitation of shale gas and the marketing strategy for natural gas in Europe was the primary cause. 

Our sources in Algeria indicate, however, that Zerguine was sacked because he resisted pressure from above to conduct corrupt under-the-counter deals of the kind that gave rise to the “Sonatrach scandal” in 2010.

The key name in this new scandal appears to be Ali Haddad, an extremely wealthy and powerful businessman who is a close friend and associate of the president’s brother, Saïd Bouteflika. Ali Haddad played a key role in financing and thereby ensuring Bouteflika’s re-election for a fourth term in April 2014.  

The price for his support now appears to be that his massive construction company, Groupe ETRHB, is given more Sonatrach contracts.

It is too early to know how foreign IOCs will react to this sudden development.  If it deters them from participating in the current licensing round and Algeria’s much-trumpeted unconventional oil and gas exploration and development, the cost and damage to Algeria will be no less great than the original 2010 scandal.

For a comprehensive analysis of this emerging scandal please refer to Algeria Politics & Security – 01.08.14

New security system for Algeria oil bases

Last week’s return of foreign workers to the Tiguentourine gas facility at In Amenas is based on the implementation of new security measures at Algeria’s oil and gas fields and their various installations. The new measures are reported to cover the four regions: the In Salah-Adrar basin, Hassi R'Mel, Hassi Messaoud and the southeast area encompassing Tiafti and In Amenas.

Our understanding of the new measures is that some 80 oil installations have been linked together in a new early warning preventative warning system. This includes intensive monitoring operations over oil and gas fields by military aircraft, as well as an alarm control system operated by Sonatrach that is triggered in the event of the discovery of any infiltration into 50 and 100 km security perimeters surrounding oil fields and bases. The military presence in areas close to industrial centres, oil and gas fields, and bases that have foreign employees has also been strengthened.

In addition, considerable emphasis has been placed on recruitment, not only at the point of recruitment, but throughout the period of employment and after the departure of the employee. This is because the terrorist attackers at In Amenas are believed to have collected information from former employees at the base.

Other safety procedures will include establishing a national security database that will hold the identity and a detailed biography of all Algerian and foreign workers in the oil companies.

For more news and expert analysis about Algeria, please see Algeria Focus and Algeria Politics & Security.

© 2014 Menas Associates

Algeria: Prime Minister unveils the government's five-year plan

Also on Sunday 1 June, Prime Minister Abdelmalek Sellal unveiled the government's plan of action for the next five years. As so many of the government’s five-year plans have come to grief in red-tape, delays, postponement, corruption and general inefficiencies, and are little more than annual reiterations, they are no longer taken quite as seriously as in the early years of the Bouteflika era.
Nevertheless, the National Press Service (APS) gave it top billing alongside the start of Ouyahia’s constitutional consultations.

According to APS, the plan is particularly focused on national security and stability, as well as building an emerging economy. In tones reminiscent of the earlier and more optimistic years of the Bouteflika era, Sellal said that the plan aims to enhance national reconciliation by convincing militants to lay down their arms and return to mainstream society. At the same time, counter-terrorism will be reinforced to safeguard homeland security.

As part of that reconciliation, Sellal said that Bouteflika had decided to "lift the ban on leaving the country for some people suspected of terrorism”. Although Sellal declined to name these people, he was referring to the lifting of travel bans issued against members of the outlawed Islamic Salvation Front (FIS), which was dissolved by court order in 1992.
Members of the now-dissolved FIS continue to oppose Bouteflika's government. It was strongly opposed to his fourth mandate, boycotted the April elections and is now boycotting the latest constitutional reform process.

Sellal also said that the government would hold regular dialogues with civil society and elected assemblies. He claimed the government was working to divide power among the judiciary, the legislature and the executive branches, pledging that reform will continue to improve public service of justice in a bid to make it fully independent and free. These are, however, all promises that Algerians have heard many times before and no longer pay much attention to.

For more news and expert analysis about Algeria, please see Algeria Focus and Algeria Politics & Security.

© 2014 Menas Associates

Algeria: French Prime Minister Jean-Marc Ayrault's visit

French Prime Minister Jean-Marc Ayrault, as reported last week (Algeria Politics & Security 13.12.13), arrived in Algiers on Sunday 15 December for a two-day official visit, the primary object of which was to boost bilateral economic co-operation and development between the two countries. Ayrault was accompanied by some nine ministers and about 40 business leaders.

The two premiers co-chaired the first meeting of the Algerian-French High-Level Intergovernmental Committee, which had been instigated during President François Hollande 's highly successful visit to Algeria exactly one year ago.

In the course of these committee sessions the two sides signed nine bilateral co-operation agreements covering a range of fields, including energy, scientific research, mechanical co-operation, fishing, the pharmaceutical industry, construction and trade.

Ayrault said at a joint news conference with Sellal that bilateral relations allowed the two sides to build bridges of co-operation “for the sake of an ambitious partnership that matches the binds linking our countries and people”. He went on to say that France was keen on re-launching dialogue on many issues of mutual interest.

For his part, Sellal voiced relief for the French investment which is urgently needed. He said, “They [French investors] can be assured about our political will regarding the encouragement of partnership that will benefit the two parties.” Algeria, he said, “is not only a market for France but, above all, a partner.”

For more news and expert analysis about Algeria, please see Algeria Focus and Algeria Politics & Security.

© 2013 Menas Associates

Algeria: No change in top public jobs

The usual round of personnel changes among senior judges, walis (provincial governors), and ambassadors did not take place this summer. There is, of course, a regular rotation within the ranks of senior officialdom, but when these changes happen during a parliamentary recess, they are often politically motivated.

 

The health of President Abdelaziz Bouteflika, who signs the decrees, is certainly a factor, but observers also argue that the regime is unwilling to go ahead with any shuffle because it fears that a new administration could escape its control during this highly volatile period.

 

Additionally, political analysts believe that influential – and older – figures within the regime are blocking a proposed policy of forced retirement from public administration at the age of 60. With a huge demographic youth bulge failing to push its way into the system and many institutions dominated by much older officials, this idea is superficially attractive.

 

It is nevertheless unlikely that any radical reforms along these lines will be implemented soon. The 65-year-old rime minister, Abdelmalek Sellal , is said to have ordered the drafting of several alternative recommendations to avoid further paralysis at state institutions due to age.

 

For more news and expert analysis about Algeria, please see Algeria Focus and Algeria Politics & Security.

 

© 2013 Menas Associates

 

The dissolution of the DRS

There is very rarely much reference to, least of all discussion about, the DRS in the media. It is perhaps significant that El Watan , in particular, has devoted quite a lot of column space this week to its inevitable reconstitution.

We have frequently opined that the DRS cannot continue in its current form and must inevitably be restructured. Its fundamental problem is that the nature of its mandate ' the security of the state' inevitably means that it, or rather its director, accrues more and more power to himself, to the point that a series of ' strong men' , now General Mohamed Mediène, acquire so much power that they effectively become the 'state' , or at least its most powerful person.

That, in itself, is a threat to the state's security, as we have seen throughout much of the last few years in the case of Mediène. Chadli succeeded in restructuring it for a while. Zeroual tried and failed. Bouteflika also tried and failed.

The fact that newspapers such as El Watan can give long editorial discussion to the subject, questioning whether the DRS is actually the department of intelligence and security or the ' real power' , and can openly discuss proposals that it should be radically reconstituted (as Chadli had almost succeeded in doing), is indicative of the mode taking hold in the country for ' significant' and perhaps even ' radical' change.

Indeed, the FFS , which is now beginning to play a more prominent role in the call for radical change, has long argued for the ' necessary dissolution' of the ' political police', arguing that the existence and practices of political police (such as the DRS ) are incompatible with a state based on law. Again, the media, in the principle form of El Watan , has given much space this week to the expression of the views of the FFS ' first secretary, Karim Tabbou, whose arguments on why the political police should be done away with will not make comfortable reading for General Mediène.

For more news and expert analysis about Algeria, please see Algeria Focus and Algeria Politics & Security.

© 2011 Menas Associates