Sonatrach, the state energy firm for Algeria, has just had a major shake-up of its senior management, with over twenty managers replaced and a new chief executive appointed.
Amine Mazouzi, a younger face within the company has risen from Sonatrach’s production development department to take over from an interim head appointed less than a year ago. An experienced figure within Sonatrach, he is the son of a respected veteran of Algeria’s war of independence against France. His immediate goal will be to attract more overseas investments and find ways to offset the impact of a worldwide fall in crude prices.
The Algerian state news agency – APS – reported that changes in the management of a number of public financial institutions and companies had been demanded by President Abdelaziz Bouteflika with the aim that they take place as soon as possible, but didn’t explicitly link those changes to the shift in management at Sonatrach. The changes come in the wake of Algeria’s failure to attract much foreign interest in its most recent round of licenses for oil and gas exploration, despite being a key gas supplier to the European market.
Oil companies had complained of there being too much red tape, and a general dissatisfaction with the terms being offered, but Sonatrach does need that foreign investment if it is to increase its oil and gas production. At present, oil production is running at around 1.2 million barrels per day, but Sonatrach intends to increase their daily output by another 32,000 barrels per day when two new fields start production in July.
The company is one of the major sources of impetus for the Algerian economy, and the drop in world oil prices since last summer has required a number of money-saving initiatives that have included asking service suppliers to cut their prices by some ten to fifteen percent. Nevertheless, their export revenues fell by forty one percent according to customs figures to around $13.4 billion due to lower crude prices.
Sonatrach’s exports account for 93.5 percent of Algeria’s total gas and oil exports, often as a majority partner with foreign firms such as BP and Repsol. It is hoped that the new arrangements will not only help stabilise a firm that has had five chief executives in as many years, but put an end to a series of recent corruption scandals.