Energie Mines - Ministère de l`Energie

Doctor Chakib Khelil
ELECTED PRESIDENT OF OPEC
T
he Minister of Energy and Mines, Mr Chakib Khelil has taken on the role of
President of the Organisation of the Petroleum Exporting Countries (OPEC) for
the year 2008, a term in office which he intends to devote to promoting the dialogue between crude oil producer and consumer countries in favour of the stability of the petroleum market. Mr Khelil, who thus takes over from the Minister of Energy of the
United Arab Emirates, Mohamed Ben Zaen Al Hameli, has already had to commit, in recent statements, to reinforce the dialogue with the petroleum consumer countries, in view of protecting
both the revenues of the member countries of OPEC and the security of energy supplies of the
world's economies. The Algerian Minister will thus have to manage an international petroleum
market marked by persistent increases in the price of the barrel, responding less to an insufficiency of the supply of crude oil than to geopolitical and/or financial considerations, indeed a
complete system of speculation gravitating around these extra-petroleum factors.
The Algerian Minister intends to favour the dialogue with the observer countries within the organisation and hopes to attract to it more countries interested by a sustainable stability of the international crude oil market, to the greater benefit of all its players. OPEC, which assures 40% of
the world's oil supply, currently has 13 member countries (Algeria, Angola, Equator, Indonesia,
Iran, Iraq, Kuwait, Libya, Nigeria, Qatar, Saudi Arabia, United Arab Emirates and Venezuela).
This is the second time - which is completely exceptional - that Doctor Chakib Khelil is called
upon to assure the Presidency of OPEC.
Table of Contents
Performances
Energie & Mines
No. 8 - January 2008
6
■ KBR to build the Skikda factory
■ A consortium and Total for two Downstream
projects
■ Case study: Transportation-by-pipeline :
challenges and ambitions
■ Desalination: Contract for two plants
■ New Tax Act being prepared
Mines
50
■ Cirma 1 :
The golden age
of mining
Sustainable Development
132
■ One hybrid plant in Algeria
■ 2nd International Conference on new energies
in Algiers
Women’s Forum
156
■ When women have a say in the matter
Partnership
62
■ Algeria-France : A new start
■ Algeria-Italy : The channel of friendship
■ Algeria-Spain : Strategic partnership
■ Algeria-Germany : President Kohler in Algiers
■ Algeria-Iran : President Ahmednedjad
in Algiers
■ African partnership : The NEPAD meets in
Algiers
Communication
164
■ The Jodi in Algiers
rd
3 OPEC Summit
100
■ 3 OPEC Summit in Riyadh :
The time of maturity
rd
Culture
167
■ The old medina
Energie & Mines
Review of the Energy and Mines sector ISSN 1112-4873 Legal deposit : 1094-2004
No. 8 - January 2008
Head of publication Sid Ali Hattabi
Editorial Adviser Ouardia Arkam
Assistants Samia Guessoum Halima Chehri (Secrétariat), Lila Rahma (Documentation), Karima Oumaouche (Coordination technique), Riad Fernani (Maquette)
Editing Ministry of Energy and Mines, Val d’Hydra, Algiers Tel. : 021 48 82 56 Fax : 021 48 81 84 www.mem-algeria.org email : [email protected]
Subscription and advertising department Tel. : 021 36 92 22 Fax : 021 36 92 36
Circulation, advertising department Sarl Baosem
Design and production Alpha Design Photo-engraving Espace numérique Printing En-Nakhla Photo credits : Sonelgaz, Alpha Design
The manuscripts, photographs as well as any other document sent to or issued for editing are not returned and cannot be the subject of any claim.
The articles published in Energy and Mines only commit their authors. Reproduction authorised provided the source is indicated.
PERFORMANCES
Upstream
Algeria-Mauritania
Sonatrach-SMH contract for the
exploration of 4 petroleum
blocks in Mauritania
Sonatrach International
Petroleum Exploration
Production
Corporation Sipex and
the auritanian
ydrocarbons Company
S
have signed in
Nouakchott an exploration contract on four
petroleum blocks in
auritania announced
Sonatrach in a press
release
The two parties will, in the terms of this
contract, initiate the exploration and
production of blocks Ta-01, Ta-30, Ta31 and Ta-35 of the Taoudenni Basin,
in Mauritania, over a total area of
20,197.74km2, specifies this source.
Sonatrach adds that its subsidiary
Sipex has undertaken to carry out geological and geophysical works on these
blocks for an amount of 2 million dollars, over an initial exploration period
of three years.
Two other "operational periods of three
years each” are also planned with one
drilling operation per period, indicates
the same source.
The Sonatrach Group emphasises that
"this new acquisition is part of the framework of the development of its activities abroad”.
The contract was signed for Sipex by
the Executive Director of International
Activities, Mr Mohamed Banhammou,
and for the Mauritanian part by the
Minister of Oil and Mines, Mr
Mohamed El Moctar Ould Mohamed
El Hacen and the Managing Director
of SMH, Mr Aboubakr Ould Maroini.
Energie & Mines
january 2008
An interesting oil potential
With the contract that has just been
signed with the Mauritanian company
SMH, Sonatrach joins two other
European petroleum companies that
have already signed contracts with the
Mauritanian government. These are
the French Group Total and the
Spanish company Repsol.
The Taoudenni Basin, which stretches
over the territories of Algeria, Mali and
Mauritania, would contain an interesting oil potential, according to several
experts. The observation works carried
out already by Sonatrach have revealed
“encouraging preliminary results”,
according to the profession's jargon.
Sonatrach, which has one permit in the
region on the Algerian territory, is
exploring the Chenachène acreage.
Last February, Sipex had already
signed in Bamako a hydrocarbons
exploration and production contract in
a block of the Taoudenni Basin in Mali.
Sipex had committed to carry out, in
four years, geological and geophysical
works as well as one drilling operation
on this block for a minimum amount of
11.6 million dollars, according to the
contract signed.
The block concerned (number 20),
with a total surface area of approxima2
tely 118,000km , is located in the
Taoudenni Basin, adjoining the
Algerian border where Sonatrach already operates, in Algerian territory, with
a prospecting contract on the
Chenachène acreage.
This new acquisition is added to
Sipex’s stake (25%) in the exploration
and production of the Malian blocks 1,
2, 3, 4 and 9 with the companies ENI
(Italy) and Baraka (Mali). Indeed,
Sipex had obtained, in November
2006, this 25% stake in the production
sharing contracts of the 5 exploration
blocks of the Taoudenni Basin, in Mali.
With this new acquisition in
Mauritania, Sonatrach reinforces its
activities abroad, more specifically its
role in the Sahel region.
performances
Sonatrach announces its
18 discovery of the year 2007
th
The national hydrocarbons company
Sonatrach has announced that it has
made a new discovery of hydrocarbons,
the sixteenth since the start of this year.
According to a press release from the
company, the new discovery was made
by the partnership SonatrachAnadarko-Maersk in the Berkine
Basin, in the Erg Oriental, more speci-
fically in the Zemiet En Naga acreage
(block 403c/e).
The wells (ZENN-1) reached the depth
of 3,611 metres in the Silurian and
produced, from the TAGI reservoir,
6.26m3/h of oil with pressure of
213psi under choke of 32/64”, according to the technical precisions provided by the same source.
Out of the 18 discoveries recorded by
Sonatrach this year, six were discovered using the company's own resources, and ten in partnership, further specifies the release.
Last minute
Record beaten : 20 discoveries in 2007
announces a Sonatrach press release
Sonatrach signs contracts
for offshore exploration
and production in Egypt
The national hydrocarbons company, Sonatrach, announces that
it has signed in Cairo (Egypt) exploration and production
contracts in two blocks of the deep Egyptian offshore, in partnership with the Norwegian company Statoil.
The documents were signed in the presence of the Egypt
Minister of Oil, Mr Fahmi Sameh, by the executive director in
charge of Sonatrach’s international activities, Mr Mohamed
Benhamou, as well as by representatives of the Egyptian company Egas and those of Statoil, specifies Sonatrach in a press release. These blocks (9 and 10), located along Egypt's
Mediterranean coast, to the west of the gas province of the Nile
Delta, were acquired on the basis of technical and financial ten-
ders presented within the framework of an appeal for tenders
launched by the Egyptian company Egas in 2006.
The consortium, comprised of Statoil, with an 80% stake, and
Sonatrach (20%), has committed to the drilling and to a major
seismic programme over a period of four years, indicates the
press release.
“Through this new acquisition, which is part of its strategy
aiming to reinforce its position and its role as a regional player
in North Africa, Sonatrach is starting its first experience in offshore exploration in partnership with Statoil, a company whose
know-how is renowned in this domain”, comments the national
company.
Sonatrach renews Eni’s (Italy) operating
contract for three Algerian oil deposits
The national hydrocarbons company
Sonatrach announced that it has signed,
in Algiers, an agreement with the Italian
petroleum company Eni, extending by
five years the operating period of three oil
deposits in the Algerian South.
The two companies thus signed an
“agreement letter” concerning “the
extension by five years of the operating
period of the BRN, BRW and BRSW
deposits located on block 403, governed
by a production sharing contract concluded on 15 December 1987 between
Sonatrach and Eni (formerly Agip) for
the exploration and mining of hydrocarbons on the Zemoul El Kbar acreage",
specifies Sonatrach in a press release.
Sonatrach and Eni also signed a “joint
statement” aiming to associate a subsidiary of the Italian company in the construction of the GALSI gas pipeline which
should connect Algeria to Italy via the
Italian island of Sardinia.
“The purpose of the joint statement is
Eni's commitment to exercise its shareholder rights having control over its subsidiary Snam Rete Gas (SRG) with the
aim of encouraging it to realise the Galsi
project”, indicates the release.
The same source adds that the company
Galsi SPA and SRG are in negotiations to
define the terms of the latter's stake.
Sonatrach is the majority shareholder of
the company Galsi SPA responsible for
constructing, by 2010-2011, this gas
pipeline of 940km and a capacity of 8
billion cubic metres a year.
The Galsi consortium is comprised of
seven companies which are: Sonatrach
with a 36% stake, Edison Gas (18%),
Wintershall (13.5%), Enel Power
(13.5%), Eos Energia (9%), Sfirs SPA
(5%) and Progemisa (5%).
According to its promoters, the project
made progress with the signature, in
Milan, in March 2005, of the letters of
intent to sell and purchase gas with
numerous companies, then the approval
of the new articles of association of the
company Galsi in December 2006.
Energie & Mines
anuary 2008
PERFORMANCES
Upstream
One of the world’s largest projects
The American KBR will
construct the Skikda LNG plant
The new plant which will cost almost 3 billion dollars will be constructed using Sonatrach s e uity by the American giant KBR in
months
It will enable the creation of
to
contractual positions in the
project phase and
during the operating phase
It is for the construction of one of the
world’s largest projects, that of the
plant producing 4.5 million tonnes of
LPG a year in Skikda, that Sonatrach
has signed an EPC contract worth
almost 3 billion dollars with the
American giant Kellogg Brown and
Root.
The ceremony, which was held at the
headquarters of the Algerian company
in Hydra, in the presence of the
Chairmen & CEO of the two companies, led by the Minister of Energy and
Mines, Mr Chakib Khelil, has enabled
the gigantic nature of this project to be
revealed, a project which required more
than 50 months of negotiations with
one of the world’s largest constructors
in this domain.
This constructor is, furthermore, the
only one that stayed in the race due to
the nature of the project since, in addition to the construction of the plant,
the contract, which is comprised of no
less than 27 appendices, also provides
for the construction of integrated storage facilities in the existing GLK1
3
plant, of a capacity of 150,000m of
3
3
LNG, 66,000m of butane, 66,000m
of propane and a gasoline sphere of
3
3,000 m , all of which for more than
2.851 billion equivalent in dollars, of
which almost 1 billion is a fixed and
non-revisable part.
Entirely realised using Sonatrach’s
equity, this project is much larger than
the one destroyed by the 2004 explosion, since this plant alone which will
be built will replace the three old ones,
with an estimated capacity of over
1 million additional tonnes of LNG, in
the words of the Chairman & CEO of
Sonatrach, Mr Mohamed Meziane,
who specified that this project’s objec-
Energie & Mines
8
anuary 2008
tive as well as those of the gas pipelines
launched will, in the next few years,
increase Algeria’s LNG production to
some 32 million tonnes a year, compared to the 20.6 million it currently produces. “In fact, we have the ambition of
keeping our place as leader in the world
market”, he stated.
For his part, the Vice-President of the
Downstream Activity, Mr Feghouli,
pointed out that the start of the construction of this plant is planned for the
month of September, whereas the
works will last for 50 months, which
could mean production will start by
November 2011. “This project will
reinforce the Downstream activity and
its national and international subsidiaries as a strategic link in the hydrocarbons’ promotion chain”, he emphasised, specifying that Hassi R’mel would
be responsible for providing the natural
gas for this new plant.
In finished products, other than LNG,
this structure will produce, each year,
more than 164,700 tonnes of ethane,
207,600 of propane, 171,400 of butane, 108,700 of gasoline and 163,100
(Nm3/year) of gas enriched with
helium - hence its importance. For his
performances
part, Mr Chakib Khelil did not
fail to indicate that this international-scale project will reinforce
Algeria’s competitiveness in the
domain of LNG.
“So,
we
will
reinforce
Sonatrach’s position, whilst
awaiting the construction of
other plants as soon as possible”,
he announced, adding that with
regards the contract signed, “we
have been able to negotiate reasonable prices, given the very stiff
competition existing throughout
the world.
There is very high demand, whereas there are very few equipment
suppliers in the world”. Indeed,
according to Mr Khelil, “there
are only three companies that
produce turbines - General
Electric, Alstom and Siemens and there are only four large
companies which construct LNG
plants, including KBR. So, we
are no longer in the position we
were in a few years ago of
demanding such or such a constructor - we are already lucky to
have one of the largest today”.
It should be said, he recalled, that
the high oil prices have created a
situation where everyone is in the
process of constructing LNG
plants, constructing refineries,
electric power plants, a “situation
which means that the construction timeframes have got longer
and the costs extremely higher,
especially if we make an appeal
for tenders and only receive one
tender and are hence obliged to
take it into account and negotiate, because there are no other
tenderers on the market”.
This is another situation which
makes the negotiation times also
very long, “because for us we
have to try to obtain more reasonable prices and this is what we
have done”, he finally specified.
Mr Bill Utt, Chairman & CEO of KBR
“Given its capacity, this
project will be one of the
world’s largest, even in the
coming years”
r tt as Chairman CEO of
one of the world s largest companies can you give us a short
presentation of KBR
Indeed, Kellogg Brown and Root is a company which was founded in 1907 in Houston
(Texas), and has therefore been in existence
for a century. At the start of its creation, it
was only BR, and the company Kellogg,
which was created in New York, joined the
group. Then, these two entities were also
taken over by the American giant Haliburton
in 1998, something which, in terms of revenue, makes us one of the largest 300
American companies.
Today, KBR works in the large infrastructure
sector, particularly on behalf of the United
States government. Abroad, we are present
in dozens of countries in the energy sector.
We have a great deal of experience in the
LNG field, where we can say that we are the
world's leaders. KBR is also a partner in over
50% of the LNG projects that are realised
there.
Currently we make 8 to 9 billion dollars net
profit and we employ more than 57,000 people in the world. That's KBR in short.
With more than
months of
negotiations with Sonatrach on
the Skikda NG Plant project
what is your assessment of the
agreement
I will say that these negotiations were very
hard but that it is a fair contract and that we
are very proud to have won it, especially
given that the plant we will construct will be
one of the largest energy projects ever built
in the world, even in the coming years, that's
for sure.
What do you actually think of
the way in which these negotiations were conducted
I will tell you that Sonatrach's executives are
excellent negotiators who do not lose sight of
their company's interests. Furthermore, they
are so demanding that we, in turn, are forced
to be up to this. That said, we have already
accomplished many things in Algeria and we
sincerely hope to continue and to extend the
cooperation we have.
r tt as a majority shareholder of BRC a lot has been said
about Sonatrach buying this
company What is the case really
Indeed, KBR owns 49% of BRC's shares.
We have often mentioned the possibility of
Sonatrach buying our shares, which is not a
bad idea. We are ready to sell them if
Sonatrach feels it appropriate to take them,
of course.
Energie & Mines
anuary 2008
PERFORMANCES
Upstream
An international consortium
and Total are awarded
two petrochemical projects in Algeria
The projects to construct
a methanol production
plant and an ethane
vapour-cracking plant in
Ar ew have been won
respectively by a consortium of international companies and by the French
company Total at the end
of a public opening session of the financial tenders held in Algiers
The contract to construct a methanol
production plant in the Arzew industrial zone, near Oran, was awarded to
the consortium Almet, comprised of
the companies Quraïn (Kuwait), Lurgi
(Germany), PPSL (Trinidad), Mitsui
(Japan) and Sotraco (Algeria).
Its production of 1 million tonnes per
year or else 3,000 tonnes per day is
intended for the international market.
The investment amount for the construction of this plant is estimated at 1
billion dollars.
In the same industrial zone, the
contract to construct an ethane
vapour-cracking plant has been awarded, for its part, to the French company Total.
Costing 3 billion dollars, this plant will
produce polyethylene LLDPE, polyethylene HDPE, mono-ethylene, glycol
(MEG), D1 ethylene glycol (DEG) and
tri-ethylene (TEG) from the ethane
extracted from Arzew petrochemical
plants. These products are intended for
the national and international market.
The two projects will be constructed in
partnership with the national hydrocarbons company Sonatrach. The two
partners will soon create the two project companies in question, each of
whose capital will be owned 49% by
Sonatrach and 51% by the investor
selected.
The two tenderers have been selected
on the basis of a tender on the maxi-
Energie & Mines
0
anuary 2008
mum rate of dividends to be given to
Sonatrach.
Hence, for the methanol production
plant, the consortium Almet gave a rate
of 76.09% compared to 68.01% from
the Emirate-Japanese consortium Iol
Vitol and 73.505% from the consortium Man Frerostaal, its competitors in
this project.
These rates were given after a specific
session, since the three tenderers had
all proposed the same rate of dividends
beforehand, namely 65.00%, it was
reported.
As for the ethane vapour-cracking
plant, Total proposed a maximum rate
of 70.00%, by far exceeding its Saudi
competitor Sabio, whose tender was
55.12%.
Sonatrach is also the supplier of the
raw material, namely natural gas.
The award process of these contracts
started at the beginning of 2005 by the
launch of the appeals for tenders related to these projects, it was indicated.
These two plants are part of a programme including a dozen petrochemical projects of a total cost of 12 billion
dollars.
Out of this programme, there are still
five projects to be formalised, accor-
ding to the vice-president of
Sonatrach's Downstream activity,
Mr Abdelhafid Feghouli.
This official emphasised the importance of the two projects for the national
economy as they will, according to him,
constitute a “real industrial fabric”.
As an example, the ethane vapour-cracking plant will enable “a large amount
of SME to be created which will generate high added value”, he said.
Mr Feghouli also emphasised the interest of these plants for Sonatrach, particularly for “its positioning on the international petrochemical market”.
According to him, “the launch of these
projects takes place in the midst of
reforms and changes both in Algeria
and on the global scale, in favour of
alliances and partnership, whilst protecting each other’s interests”.
As, he indicated, “Sonatrach is looking
for presence abroad in the domain of
petrochemistry”, whereas its foreign
partner, for its part, is looking
for “access to raw materials and comparative advantages favourable to
development”.
performances
Signature, in Oran, of the contract relating
to the “Execution of the FEED studies
of the ethane extraction project”
The contract relating to the “Execution
of the FEED studies of the ethane
extraction project of the GL1/Z and
GL2/Z-Arzew” with the international
group Technip has been signed at the
living centre unit (UCV) in Aïn El Bya
(Oran), by Mr Mekki Henni, director
of research and development of the
Downstream activity, and Mr Jacques
Glemarec, vice-president of Technip.
By virtue of this contract, whose
signing ceremony took place in the presence of Mr Mohamed Meziane,
Chairman & CEO of the Sonatrach
Group, of the vice-president of the
Downstream activity, of the Chairmen
& CEO of the subsidiaries and executives of the Group, Technip undertakes
to carry out detailed design studies, at
more or less 10%, for the ethane
extraction project of the production
facilities of Arzew’s two plants. Ethane
(a compound extracted from gas)
extraction plants, which will be used for
petrochemical production, will be
constructed inside and outside the
plants.
According to the project’s data sheet,
these plants must supply an ethane
vapour cracking plant of a treatment
capacity with an ethane load in gaseous
form equal to at least 1,400,000 tonnes/year.
This should also maintain the LNG
production capacities – a gas enriched
with helium – and the commercial quality of the finished products. Speaking
on this occasion, the Chairman & CEO
of the Sonatrach Group congratulated
the signature of this contract which is a
good sign of the recovery of the petrochemical industry in Algeria. “This is
an important step for the plan to develop this industry”, he specified, before
recalling that a dozen projects have
been launched by the Group since
2005. “With this signature, three projects in total have been launched. We
have to continue these efforts and support them both in the upstream and in
the downstream.”
Beforehand, Dr Abdelhafidh Feghouli,
vice-president of the Sonatrach
Downstream activity, pointed out that
this ceremony reinforces further “the
vast Downstream development project”. The partnership with the Technip
Group, “one of the world’s leading
companies for the design, engineering
and construction of facilities for the gas
industry”, will enable it to benefit “from
great experience in this field”, he indicated, before recalling that this international Group built, in the 1960s, the
very first LNG production plant in
Arzew. “With this project and those to
come, the Downstream activity (and its
subsidiaries) will consolidate further its
role as a strategic link in the hydrocarbons' promotion chain”, he pointed
out, before estimating the cost of the
future ethane vapour-cracking plant at
more than 3 billion American dollars.
For his part, the vice-president of
Technip described this contract as
important for the two signatory parties
as not only “does it promote the
resources”, but it also “marks the presence of Technip in Algeria”. In his opinion, it is also a sign of prospects of
lasting relations between both parties.
Energie & Mines
anuary 2008
PERFORMANCES
Transportation
Transportation-by-pipeline activity
Assets, know-how
and ambitions
Since its creation in 1 3 Sonatrach has set itself the mission
of transporting marketing and selling hydrocarbons extracted from
the deposits of the South by the foreign companies working at the time
in Algeria This makes the Transportation-by-pipeline activity an original
business of the Sonatrach Group
Currently, the Transportation-by-pipeline activity (TRP) is responsible for
the routing of hydrocarbons, crude oil,
gas, LPG and condensate from the production zones to the storage zones, to
the LNG and LPG plants, to the refineries, to the oil ports as well as to the
importing countries.
The Transportation-by-pipeline activity
is responsible for defining, constructing, operating, carrying out the maintenance and developing the network of
pipelines of over 16,000km as well as
the different facilities related to it.
In accordance with the HSE (health,
safety and environment) policy of the
Sonatrach Group, TRP ensures the
respect of the working conditions in the
health and environmental protection
rules.
The Transportation-by-pipeline activity
has launched an ambitious investment
programme capable of ensuring that it
achieves the objectives assigned to it by
the Sonatrach Group, in the safest and
most advantageous conditions in terms
of quality of the facilities, of the works
and of the execution timeframes.
Transportation-by-pipeline
within the hydrocarbons chain
Transportation-by-pipeline is the intermediary link between the upstream of
the oil and gas activity and the downstream activities in terms of transformation, treatment of the hydrocarbons
and their marketing and sale. This is a
hinge stage in the hydrocarbons chain.
issions of the TRP activity
Coordination of the strategic aspects
related to the transportation-by-pipeline activity, as well as the regulation of
■
Energie & Mines
2
anuary 2008
performances
29 Pipelines in operation of a
length of 16,200km
■ 322 Million tonnes of oil equivalent
(Mtoe) in transportation capacity
■ 79 Pumping and compression
stations
■ 300 Main machines with total
power of over 2 million CV
■ 109 Storage tanks of a design
capacity of 3.3 million cubic metres
■ 3 Oil ports + SPM (loading) of an
operational capacity of 320MT/year
■ 3 Main maintenance bases
■ 1 National gas dispatching centre
(CNDG)
■ 1 Liquid hydrocarbons dispatching
centre (CDHL)
■ 1 Oil storage and transfer centre
(CTSH)
■ 3 Regional intervention bases
for DRC
■
the related critical operational interfaces;
■ management of the operational interfaces;
■ preparation for strategic decisionmaking;
■ management of the international projects for which the activity will have
tendered alone or within the framework of a partnership.
Within the framework of these general
missions, the Transportation-by-pipeline activity :
aoud El amra and assi
■ Defines, constructs, operates, carries
R mel two neuralgic facilities
out the maintenance and develops the
network of pipelines and the related
facilities
to
Dispatching
Annual
Provisional
respond to the
centre
capacity
capacity
needs
of
CDHL
750,000 (barrels/day) 1,400,000 (barrels/day)
Sonatrach's
GNDG
93.3 (109m3/year)
transportation
profiles
in
The neuralgic facilities for the TRP
optimum conditions of economy, quaactivities are comprised of two dispatlity, safety and protection of the enviching centres (liquid and gas).
ronment.
An important liquid hydrocarbons
■ Assures the regulation between the
dispatching centre (CDHL) is based at
production and the marketing and
Haoud El Hamra (Hassi Messaoud).
selling.
The Haoud El Hamra oil dispatching
centre benefits from a renovation plan
A wealth of facilities
designed to increase its current capaciand ambitions
ties, which are more than 750,000 barThe installed TRP transportation caparels/day.
cities are 322 million tonnes of oil equiThe National gas dispatching centre
valent (Mtoe). TRP has 29 pipelines of
(CNDG) is based at Hassi R'mel. This
a length of more than 16,200km (2 of
is where the quantities of gas designed
which are intercontinental) for natural
for Sonatrach's clients are calculated
gas.
and injected, in order to supply the
■ Two to Italy (via Tunisia) called the
Sonelgaz facilities, the LNG plants and
Enrico-Mattei Gas Pipeline (GEM)
the export loading points.
■ And another to Spain (via Morocco)
It is also through this Hassi R’mel
called the Pedro-Duran-Farell Gas
dispatching centre that the natural gas
Pipeline (GPDF)
(coming from the production zones)
transits and is routed by the transcontiOut of the 29 pipelines which TRP has,
nental gas pipeline Pedro-Duran-Farell
12 are reserved for crude oil, 2 for
destined for Spain (via Morocco) and
condensate, 3 for LPG and 12 for
by the Enrico-Mattei gas pipeline
natural gas.
which ends up on the Italian market
An intensive programme to extend the
(via Tunisia).
network has been launched by TRP
☞
which will bring the total length of the
network to 21,500km by 2011, i.e. an
additional 5,300km.
Another intensive programme to overhaul the existing facilities has been
launched. It has a budget of some
1 billion dollars.
Current status of the main and secondary networks
Number of pipelines
Length (km)
Operational capacity
Unit
Crude
Condensate
LPG
Natural gas
Total
12
4 970
146
Millions of MT
2
1 072
23
3
2 697
17,6
Gm3
12
7 461
137,3
29
16 200
322
Mtoe
Crude
Condensate
LPG
Natural gas
Total
13
5 638
165
Millions of MT
3
1 718
35
5
3 650
27
Gm3
18
10 470
193
23
21 475
415
Mtoe
By 2010
Number of pipelines
Length (km)
Operational capacity
Unit
Energie & Mines
anuary 2008
PERFORMANCES
Transportation
☞
arge storage capacities
Pumping and compression stations
Pumping stations
Crude
35 with satellite
stations
Station de compression
Condensate
3
LPG
10
Total
Natural Gaz
31
79
power plant, the eastern region of the
country, and Galsi.
Another gas pipeline GZ4 is under
construction. It goes from the Hassi
R'mel fields to the west of the country,
going through Sougueur. It will be
Storage tanks
Region
Assets per region
Product
Number of tanks
32
4
14
14
13
1
11
7
13
82
27
Haoud El Hamra
Crude
transportation region
Condensate
West transportation region Crude
Condensate
In Amenas transportation Crude
region
Condensate
Centre transportation
Crude
region
Condensate
East transportation region Crude
Total
Crude
Condensate
To ensure the regulation between the
production and the marketing and
sales, TRP has 109 storage tanks of a
capacity of 3.3 million cubic metres.
A programme to construct 83 additional tanks, 64 of which for the storage
of crude, is underway.
Currently, 15 tanks are under construction (in HEH, Arzew and Skikda).
The number of tanks will be 192, with
useful storage capacity of 6.8 million
cubic metres. To assure the circulation
of hydrocarbons, TRP has 79 pumping
and compression stations, 35 of which
are pumping stations for the crude of
an operational capacity of 146 million
metric tonnes. The 79 pumping and
compression stations are equipped with
300 main machines of a total power of
2 million horses.
The oil port terminals and
offshore loading buoys
TRP is operational through its new
subsidiary STH in the three hydrocarbons loading ports on the Algerian
coast (Arzew-Béjaïa-Skikda).
The operational capacity of these three
ports (fixed posts and SPME) is 174
million tonnes a year with a market factor of 146 days/year.
Design Cap./m3
1,311,600
140,000
630,374
600,567
283,000
35,000
340,362
305,000
665,600
3,195,936
1,115,567
In addition to the numerous dockbased loading posts, the three ports are
fitted with 5 offshore oil loading buoys
(SPM type) which enable the berthing
of large tonnage tankers. This considerably increases the ports’ capacities and
reduces the loading time.
They are placed several kilometres off
the Arzew-Béjaïa-Skikda ports.
These offshore loading buoys are designed to load, in severe weather conditions, tankers of a capacity ranging up
to 320,000 tonnes.
Each of the offshore buoys has a loading output of 10,000 tonnes/hour.
An intensive development
programme
In the future, natural gas is likely to
become an increasingly important element in the world's energy balance.
Algeria's production, by 2010, is done
so as to increase the gas exporting
volume from 60 billion cubic metres to
85 billion cubic metres a year.
Hence, TRP has launched an intensive
programme to extend its pipeline and
installation network for gas. The gas
pipelines GK3/GK4 are in study phase
to supply the future Skikda megastring, the Koudiat Edrouche electric
Port
Number of SPM type buoys
Product Capacity MT/year
Béjaïa
1
Skikda
2
Béthioua
(Arzew)
2
Crude oil/
condensate
Crude oil/
Condensate
Crude oil
Energie & Mines
anuary 2008
80 000 to
320 000
Useful Cap. m3
973,643
103,404
561,375
499,691
249,700
29,900
213,400
177,840
494,000
2,462,218
840,735
used particularly to supply the Medgaz
project to Spain. TRP is also planning
the construction of a major gas pipeline GR4 starting at Gassi Touil designed to transport the production from
the Gassi Touil fields to Hassi Touil.
There is an investment programme of
around 5.7 billion dollars during the
period from 2007 to 2011. This essentially covers the development, renovation and upgrading of the network and
its facilities.
aintenance
an important link
The maintenance of the different
industrial facilities is the responsibility
of the maintenance division. The maintenance division is comprised of five
departments, two of which are central
departments :
Works
Symbol
Hassi R’mel
GK3
Skikda
Aïn Djasser
El Kala
Hassi R’mel
GZ4
Sougueur
Tronçon Nord
Sougueur
Arzew
Tronçon Nord
Macta Douz
Béni Saf
Phase 03
Gassi Touil
GR4
Hassi R’mel
Diameter
(inches)
48”
48”
48”
48”
48”
performances
■
■
Technical department
Procurement department
And three operational departments:
Laghouat maintenance department
(DML)
■ Biskra maintenance department
(DMB)
■ Pipeline repair department (DRC)
and GPDF which are in operation and
with the Medgaz project, which is under
construction, and the Galsi and TSGP
projects which are in study phase.
■
The two operational departments DML
and DMB undertake the general revisions, the partial revisions and the
renovation of the noble parts of rotating machines as well as various inspection operations and the special operations on the pipelines.
The repair department carries out
repair and renovation works on the different pipelines and concentrated
works.
These three departments are quality
management system certified ISO
9001 - V2000.
The technical department is responsible for the programming and monitoring of the different operations as well
as the drawing up of the briefs related
to the maintenance, particularly for the
installation, in an initial phase, of an
expert on-line diagnosis system of
turbo-pumps of the station SP5 - OZ2
and the study and acquisition of third
generation mechanical fittings for
pumps and compressors.
The procurement department is
responsible for grouped purchases in
favour of the TRP structures.
Strong presence abroad
Abroad,
Sonatrach
and
the
Transportation-by-pipeline activity are
associated with the gas pipelines GEM
In operation
Pedro-Duran-Farell Gas Pipeline
(GPDF) : a gas pipeline of a length of
521km connecting Algeria to Spain via
Morocco.
Technical features of the gas pipeline
■ Length: 521km
■ Diameter: 48''
3
■ Capacity: 11.3 billion cm /year
■ Commissioning: 1996
Enrico-Mattei Gas Pipeline (GEM):
gas pipeline connecting Algeria to Italy
via Tunisia.
Technical features of the gas pipeline
■ Length:
(550km x 2) + 293 =
1,393km
■ Diameter: 2 x 48''
3
■ Capacity: 27.25 109cm /year
■ Commissioning: 1983
The Galsi project, which will connect
the Algerian coast to Sardinia, in Italy,
is also highly advanced and the first
Galsi gas is expected for the start of
2011.
Technical features of the Galsi
■ El Kala-Cagliari (offshore) :
Diameter
24’’
Length
280 km
Depth
2800 m
■ Cagliari-Olbia (on-shore):
Diameter
42’’
Length
300 km
■ Olbia-C.d. Pescaia (offshore):
Diameter
22’’
Length
250 km
Depth
900
Share Ownership
Sonatrach
Edison
Enel
Wintershall
Hera
Progemisa
Sfirs
Commissioning
date
574
15
Sep. 2009
10
Sep. 2007
261
218
Oct. 2007
122
Jan.2008
10
Nov. 2009
Current
36%
18%
13,5%
9%
5%
5%
5%
As for the TSGP project which will
connect the production zones from
Nigeria via Niger, this is making progress in accordance with the timetable
established.
Technical features of the TSGP
■ Loading terminal : Warri (Nigeria)
■ Receiving terminal: Béni Saf or El
Kala
■ Length: 4,188km
2,310km over the Algerian territory
840 km over the Nigerian territory
1,037 km over the Nigerian territory
■ Diameter: 48''
■ Pressure: 100 bars
■ Volume: 20bcm
Share Ownership Current Future
Sonatrach
NNPC
532
36%
20%
12%
12%
20%
The Medgaz project which will supply
Spain and other European countries
with natural gas through an underwater gas pipeline from Béni Saf to
Almeria on the Spanish coast. The
Medgaz project is highly advanced and
the first gas is expected for June 2009.
Technical features of the Medgaz
■ Loading terminal: Béni Saf (Algeria)
■ Receiving terminal: Almeria (Spain)
■ Length: 200km
■ Diameter: 24''
■ Max depth: 2,150m
3
■ Capacity: 8 billion cm /year
Capacity
(109m3/year)
Current
Sonatrach
Cepsa
GDF
Endesa
Iberdrola
Under construction
Length
(km)
300
Share Ownership
50%
50%
25%
25%
☞
Energie & Mines
anuary 2008
PERFORMANCES
Transportation
☞
In Latin America and in Peru in the
Camisea project, TRP manages its part
of the pipelines within the framework
of its stake in the project in the company TGP.
uman resources capable of
achieving the TRP ambitions
The world of energy has always been a
difficult world, mainly due to its
impacts on the socio-economic development of nations.
It is even more difficult nowadays,
when the market gives way to the stiffest of competition and where the competition is more of a fight than a rule.
The last segment in the business chain,
transportation still remains as strategic
as ever through its direct opening to the
market. The results, the ranking and
the reputation of the company depend
on its performance.
Hence, the permanent objectives of this
business are to respond to demand
within the timeframes. Failing which, in
the more or less long term, the company is likely to disappear.
The constant need for performance is
at the very centre of a perpetual development of the hydrocarbons transportation-by-pipeline business. The industrial facilities benefit from the results of
on-going research aiming to increase
their production and optimise their
safety thus meaning increasingly higher
requirements in terms of the knowledge and know-how of personnel.
In the TRP human resources management philosophy, man has a privileged
Energie & Mines
anuary 2008
position and the development of his
skills is a major objective.
To do this, the HR division undertakes
a technological watch at all times to
identify and respond with skill to the
needs of an efficient management of all
the operating functions, maintenance,
management and others.
Selecting the best, recruiting in the new
specialities, qualifying its personnel
through a series of training courses are
the golden rules of HR management
within the activity.
Respect of the environment
an on-going concern of TRP
In terms of protecting the environment,
several pipeline deviations have been
made to protect the dams and the
populations from industrial risks.
For example, this is what happened
with a deviation operation of the pipeline which connects the Beni Mansour
station to the Sid Arcine refinery, thus
enabling the protection of the groundwater and the Keddara dam, in the
wilaya of Boumerdès.
The TRP living bases have relaxation
and fitness facilities for the workers on
site as well as healthcare centres with
top level medical personnel.
Studies of dangers and environmental
audits are scheduled, in the short term,
to evaluate the risks, put in place
improvement actions and define the
operation organisation plans.
An important plan to renovate the
works has been initiated to enable the
works to be brought in line with the
regulations in force, particularly in
terms of safety and protection of the
environment.
Missions of the HSE division
■ The implementation of the Sonatrach
Group's policy in terms of health, safety and the environment (HSE) within
the activity.
■ The guidance, the assistance and the
control of the decentralised structures
of the activity in terms of HSE.
■ The development and the generalisation of the HSE culture within the activity's structures.
■ The putting in place of an HSE
management system within the activity
in relation to the Group's management.
■ The putting in place of a supervision,
surveillance and warning mechanism,
an emergency response and evacuation
plan and an anti-pollution plan in
collaboration with the structures
concerned.
■ The putting in place of internal
management tools, compliant with
those
decreed
by
the
HSE
division/Group to evaluate the performance.
In terms of health, safety and environment :
■ The contribution, in relation to the
HSE division/Group, to drawing up
the management policy for the solid,
liquid and gaseous waste generated by
the operating of the transportation network.
■ The establishment of a database and
a documentary fund on the standards,
the regulatory texts and the studies in
terms of HSE.
■ The control of the application of the
regulations and of the standards in
terms of health, safety and the environment within the activity's structures.
■ The contribution, with the other
structures concerned, to drawing up
the workforce standards in terms of
HSE for the needs of the activity's
structures.
■ The contribution to drawing up the
implementation of the HSE training
plan, compliant with the HSE/Group
policy.
■ The representation of the activity in
terms of HSE with the different organisations and institutions concerned.
■ The information and general reporting to the HSE division/Group.
performances
The subsidiaries and the stakes
of the TRP activity
Amount of TRP stakes :
3,347.6 million dinars
■ (Sarpi) Société algérienne
de réalisation projets industriels
Date of creation : 27 june 1992
Share capital : 814.5 million dinars
Shareholders : Sonatrach (50%) ;
ABB Limus (50%)
■ (Cash) Compagnie d’assurances
des hydrocarbures
Date of creation : 4 october 1999
Share capital : 1,800 million de dinars
Shareholders : Sonatrach (38,90%) ;
Caar (3,30%) ; Naftal (11,10%) ;
CCR (16,70%)
■ (SKS) Shariket Kahraba Skikda
Date of creation : 11 may 2003
Share capital : 15,000 million de dinars
Shareholders : Sonatrach (30%) ;
Sonelgaz (50%) ; AEC (20%)
■ (SKC) Shariket Kahraba Cherchell
Date of creation : 12 february 2005
Share capital : 2,000 million de dinars
Shareholders : Sonatrach (35%) ;
Sonelgaz (35%) ; AEC (30%)
■ (STH) Société de gestion
et d’exploitation des terminaux
à hydrocarbures
Date of creation : 25 july 2004
Share capital : 1,000 million de dinars
Shareholders : Sonatrach (60%) ;
EP Arzew (20%) ; EP Skikda (15%) ;
EP Béjaïa (5%)
■ (BAOSEM) Baosem édition et publicité
Date of creation : 8 november 2002
Share capital : 1 million de dinars
Shareholders : Sonatrach (35%) ; Naftal
(15%) ; Naftec (15%) ; Sat-Info (35%)
■ (SKB) Shariket Kahraba Berrouaghia
Date of creation : 12 december 2004
Share capital : 6,300 million de dinars
Shareholders : Sonatrach (49%) ;
Sonelgaz (51%)
■ (SKH) Shariket Kahraba Hadjrat
Enouss
Date of creation : june 2006
Share capital : 19.7 billion de dinars
Shareholders : Algerian Utilities International
Limited (51%) ; Sonelgaz (10%) ; AEC
(29%) ; SIEP (10%)
Launching of the Mesdar,
the first Sonatrach VLCC
The Mesdar, the first Sonatrach Group VLCC, has been launched by the shipyard NanTong Cosco Khi Ship Engineering Ca. Ltd. (Nacks).
The launching of this 300,000-tonne heavy oil tanker with a transportation
capacity of more than 2 million barrels of crude oil consists of filling the waterballast tank and then removing the vessel from dry dock for its berthing to an
adjacent dock in order to carry out the finishing works on it.
This operation, which lasted almost four hours, took place without any incident,
in the presence of all the parties involved in the project, namely Sonatrach
Petroleum Corporation (SPC), Sonatrach Marketing activity, Kawasaki
Shipbuilding Corporation (KSC) as well as the staff of the Chinese Nacks yard.
It should be remembered that SPC and KSC created, on 13 June 2006, a joint
venture, owned 50% each, called New Ocean Shipping Venture (NOSVL),
responsible for the acquisition of this VLCC. The acceptance of the Mesdar is
expected for 31 October.
A new LPG tanker Rhourd El
Adra to reinforce Sonatrach’s fleet
The reinforcement of Sonatrach’s fleet through its subsidiary Hyproc Shipping
Company, responsible for the maritime transportation of hydrocarbons, is accele3
rated with the acquisition of a new LPG tanker of a capacity of 22,500m named
Rhourd El Adra from the name of the Algerian gas deposit, very rich in condensates, discovered in 1964, whose production started in 1989. This new acquisition
3
3
comes after those of the Alrar (58,000m ), of the Rhourd Enouss (58,000m ) in
3
2004 and of the Hassi Messaoud2 (58,000m ) in 2005. It is part of the framework
of the investment strategy implemented by Sonatrach to reinforce its fleet with the
acquisition, 100% owned, of new generation vessels, whose objective is to assure
the transportation by its own means of 50% of its LPG exports. The naming ceremony was presided over in the Namura shipyard, in the south of Japan, by the
Chairman & CEO of Hyproc Shipping Company, in the presence of Algeria’s
Ambassador to Japan and directors of the Namura Japanese shipyard.
Sonatrach reinforces its fleet with
a new methane tanker, the Cheikh
El Mokrani
In the Japanese town of Tsu, Sonatrach has taken receipt of the methane tanker
Medmax I, named Cheikh El Mokrani. The hand-over ceremony of the new
methane tanker took place in the presence of Mr Mohamed Meziane, Chairman
& CEO of Sonatrach, of His Excellency Algeria’s Ambassador to Japan, of the
Chairman & CEO of Hyproc Shipping Company, as well as the directors of the
two Japanese companies Mitsui OSK Lines and Itochu. This vessel is acquired in
partnership, a joint-venture called “Mediterranean LNG Transport Co. (MLTC)”,
between : • The Japanese party Itochu (25%), Mitsui OSK Lines (25%) • The
Algerian party Sonatrach (50%) and its subsidiary Hyproc Shipping Company
(25%). The latter will ensure its management in all aspects – nautical, technical
and commercial. Of a transportation capacity of 74,365m3 and 220m long, this
methane tanker was built in the shipyards of Universal Shipbuilding Corporation
TSU Shipyard, Japan. The construction of the Medmax I (Mediterranean
Maximum Size) will be followed by the hand-over next year of the Medmax II of
the same capacity, named Cheikh Bouamama. These two acquisitions will be a
strategic asset for the marketing of LNG for Sonatrach. The optimal size of these
vessels gives them the possibility of berthing practically in all gas terminals in the
world, particularly the Mediterranean and European ones.
Energie & Mines
anuary 2008
PERFORMANCES
Transportation
Air transport
Tassili Airlines : 3 subsidiaries
and 41 planes on the runway
The airline company Tassili Airlines itself a subsidiary of the Sonatrach
Group has taken receipt of a new plane from the Canadian Group Bombardier
Indeed, this company has just taken
receipt of the third of four twin-engine
aircraft which it had ordered from the
Canadian group.
This new 74-seater aircraft, whose
maximum speed can reach up to
667km/h, will be followed by a fourth
and final plane which will be delivered
by the end of this month: The order is
for a total amount of 84 million dollars
and, in fact, is part of the new development strategy which this company has
set itself, which has planned to reinforce
its fleet with 41 planes.
This is, furthermore, what was emphasised by the Managing Director of the airline company, Mr Rachid Nouar during
this hand-over ceremony, who highlighted, in this context, the fact that his
company hopes to become the country’s
second largest civilian transport company, after Air Algérie.
This programme, based on a large-scale
development plan, thus counts on a
financial package allocated by the parent
company, namely Sonatrach, estimated
at 1.2 billion dollars.
This sum will be managed through the
world-renowned international air
transport association IATA, whose headquarters is based in Canada, thus enabling the acquisition of about forty aircraft of different types. With regards
recruitment, here again the development
plan is ambitious since from its current
300 employees it intends to increase this
number to 1,500 employees, including
180 pilots and 80 engineers and maintenance technicians.
Furthermore, 30 pilots have just been
recruited by Tassili Airlines recently.
These pilots do not come from the competition, i.e. Air Algérie, or from abroad,
but are quite simply the former
employees of Khalifa Airways, still technically unemployed which, to date,
brings the number of pilots recruited by
this company to 60, whilst awaiting the
Energie & Mines
8
anuary 2008
arrival of the planned number for 2009,
which, in total, is 120 pilots. Currently,
these pilots are on retraining courses in
several countries, such as Great Britain
and Canada.
To return to the development plan, this
company plans to launch two international appeals for tenders with the objective of developing the other branches of
Tassili Airlines. Three subsidiaries are, in
fact, programmed, one of which
concerns passenger transport both inside and outside the country, the second
concerns the transport of workers from
the oil sector, which will have its headquarters in Hassi Messaoud, whereas
the third subsidiary will be farming-related and will be particularly used to fight
locusts and to intervene in forest fires.
Its headquarters will be based in Tiaret,
according to the information collected
from the Chairman & CEO and recently published in the press.
This is a project that is dear to the
Minister of Energy and Mines who has
therefore given this company the means
to expand. This ambitious programme
should be completed by 2009 and the
first appeal for tenders which should be
launched immediately provides for the
acquisition of a dozen medium capacity
aircraft, ranging from 100 to 150 seats,
within the framework of passenger
transport. “We hope not only to be
granted a good position among the
foreign companies recently set up in
Algeria; our ambition is to overcome
some shortcomings in terms of domestic transport”, further specified
Mr Nouar on many occasions, indicating, in this respect, the fact that the
second appeal for tenders planned
concerns the purchase of about forty
other aircraft, including two emergency
response helicopters, as well as two
other “repatriation” type aircraft which
will be made available to its workers
spread over its bases located in the
South.
For the rest, Mr Nouar specified that the
order book of the brand new company is
now full, since several foreign companies working with Sonatrach in the
hydrocarbons' sector have shown their
desire to see Tassili Airlines transport
their expatriates. “Which we will do
shortly”, said Mr Nouar, rejecting the
idea that this new activity may harm its
competitor, Air Algérie. “There is no
competition, there is room for everyone
and the market is still open”, he pointed
out finally.
performances
Electric generation
Agreement between Sonatrach and
Sonelgaz for the construction, in
partnership, of two electric power plants
Sonatrach and Sonelga
have signed in Algiers
shareholder agreements for the creation
of two companies to
build and operate two
combined cycle electric
power plants as well as
the marketing and selling of the electricity
produced
These are the Targa (Aïn Témouchent,
far north-west) and Kouidet Eddraouch
(El Tarf, far north-east) plants with a
total capacity of 2,400MW.
The agreements have been signed by the
executive directors of the two companies
in the presence of the Minister of Energy
and Mines, Mr Chakib Khelil, and the
Chairmen & CEO of Sonatrach and
Sonelgaz, Messrs Mohamed Meziane
and Noureddine Bouterfa.
According to the terms of these agreements, two joint stock companies (SPA)
or “project companies” will be created
with registered capital of 1 million
dinars each, 51% owned by Sonelgaz
and 49% by Sonatrach.
In addition to the availability of electric
energy, these two projects will assure
about 1,200 jobs during the construction and about one hundred jobs during
the operating of each factory.
The total investment budget, estimated
at 200 billion dinars, is to be paid 30%
from the project companies' equity
thanks to shareholder contribution, and
70% by local bank financing.
According to Mr Bouterfa, the two new
companies, Sharikat Kharaba Terga
(SKT) and Sharikat Kahraba Kouidet
Eddraouach (SKD), coincide with the
start of the Sonelgaz emergency response programme comprised of 8 projects
with total power of 2,000MW.
These are the Marsat El Hadjadj,
Relizane, Larba, Batna, Oran east,
Algiers Port, Annaba and M’sila plants.
They are designed to “respond to the
increasing demand for a specific product that is essential to the national economy and to the quality of life of citizens”, added the head of Sonelgaz,
emphasising that it was “extremely
important” for them to be completed
within the imposed timeframes.
The commissioning of these two plants
is expected for the first and third quarters of 2011, respectively.
Mr Bouterfa further remarked that these
ambitious projects were scheduled in a
context marked, at present, by “increasingly stiff competition on the international market, accentuated by a very
strong energy demand and a lack of
supplies of electricity production equipment”.
This reality of the present time means,
he said, that “extensions of the construction timeframes of the combined
cycle (plants) have gone from 24
months to more than 44 months in the
last few years”, according to specialists.
Mr Bouterfa revealed, in this respect,
that the Sonelgaz emergency response
plan, evaluated in October 2006 at 1.1
billion dollars with a timeframe of 18
months, was locked in, in July 2007, at
2.3 billion dollars (i.e. 1.2 billion more)
and a construction timeframe increased
to 32 months.
“This means that it is important, today,
faced with this new situation, to adapt as
quickly as possible our entire vision and
our entire strategy to satisfy the supply,
if we do not want our country to experience, beyond 2012, a catastrophic scenario which would be practically impossible to remedy without serious consequences for our economy”, he warned.
Mr Meziane felt, for his part, that the
creation of these two companies
“confirms the desire of incorporating
Sonatrach in a strategy of diversifying
its portfolios”.
He emphasised that the Group, today, is
participating in several electric generation projects in Algeria and cogeneration
projects in Spain, whilst mentioning
other opportunities in electric networks
in Europe.
In his opinion, the enormous natural gas
capacities which Algeria has are, in any
case, a major asset for the realisation of
the programme to construct electric
power plants.
Energie & Mines
anuary 2008
PERFORMANCES
distribution
An option for developing sales
SDA and payment
by instalments
Payment by instalments for the connection works is one of the possible marketing and sales management options for a company concerned about responding to its clients expectation
It is with this in mind that this approach
has been adopted for our different clients,
offering them the possibility of settling
their bill through the payment by instalments formula.
Consequently, this formula helps to
encourage the domestic clients to contact
Sonelgaz, without concern, to formulate
their energy supply requests on the one
hand and, on the other hand, to avoid the
use of fraud and retrocession of the energy, notwithstanding the losses recorded
financially, as well as the incidents caused
on the networks.
Except that the administrative management of the payment by instalments
requires human and material resources to
be able to achieve the objectives fixed by
rigorous monitoring of the files and sustained and on-going control. In this
respect, the reorganisation of the distribution has enabled the reinforcement in
terms of human and material resources of
the decentralised structures and business
services. As an example, this payment
method has enabled the Boumerdès
DRD to process and close 294 files, since
the circumstances of 2003, due to the
earthquake of 21 May, a date on which
the RCN business volume multiplied,
namely the massive connection of tents,
chalets, transition centres and the re-housing of those affected by the earthquake.
Hence, a clean-up operation of the port-
folio of debt claims held by virtue of the
payment by instalments was initiated at
the DRD level. This procedure enables
the development of our electric and gas
energy sales and, finally, enables us to get
heavily involved in fighting any form of
illegal energy consumption, given that its
negative consequences escape no one.
Hence, the payment by instalments is
now an essential option to successfully
deal with the retrocession phenomena in
the field and enable the DRDs to boost
the energy sales and even to improve the
fundamental parameters of their sales
and marketing activity.
Forcing for the recovery of debts in the SDA
Recovering debts is a crucial stake for the business and financial
survival of the DRDs. How do we deal with this? The problem is
becoming increasingly thorny, particularly given that the canvassing, follow-ups, summons and other recovery procedures have
demonstrated their limitations faced with increasingly obstinate
clients and who, furthermore, demonstrate laxity in paying their
bills. Indeed, the volume of debts to be recovered by the DRDs
of the SDA reached 686 billion dinars at the end of July 2007.
This figure clearly shows a critical and worrying situation with
regards the levels of debts.
To this end, the Sales and Marketing Department put in place
debt recovery action plans in the month of August, piloted by its
head and the DRDs.
The approach adopted by this plan consisted of putting in place
recovery teams comprised of: • Sales teams, comprised of executives and sales assistants and approved companies • Operating
teams (electricity and gas) • District teams
First of all, these teams’ mission is the canvassing, the summonsing in a second phase and the systematic cut-off of the energy
as a last recourse. This is all done whilst respecting the timeframes imposed for each stage of the process.
Furthermore, the mobilisation of this vast bailiff and lawyer recovery operation has been necessary, in the same sales and marketing departments, in order to keep constant pressure on our debtors and clearly demonstrate the strictness of this campaign
which, initially, has been clearly announced through the written
press and the local radios.
The objective fixed for this recovery operation was to reduce the
levels of outstanding debts of all the DRDs, by the end of August
Energie & Mines
20
anuary 2008
2007, by at least 20% of the thresholds recorded at the end of
July 2007. The specificity of this forcing operation has, undisputedly, been the intensification of cut-offs of energy in the APC
offices, but also the sustained canvassing of the major clients
such as the ADE, SEAAL with the complete review of their
consumption history - which is the subject of dispute.
Canvassing, insisting with public organisations such as the
Wilaya of Algiers & the public companies (EP), the MDN and
the DGSN. In parallel, the amount of debts held by the LV/LP
clients has also been the subject of this campaign.
The achievement rate of the objective of this recovery operation
recorded 50% at the end of August, as illustrated in the graphs.
performances
SDA innovates
The new face
of the sales and
marketing activity
New uniforms as a communication tool & bonuses
as a motivation tool.
Within the framework of the reorganisation, the sales and
marketing activity has undergone fundamental changes both
organisationally and functionally. Indeed, with the new vision
of the group which is part of a context whose key words are
competition and performance, the sales and marketing function aspires today to instil the response to the local needs
expressed by an ever-demanding client.
To this end, the first and most important of the changes made
in the function was the re-appropriation of the relief activity the essential function of the sales and marketing activity
and an incomparable driving force of a direct approach
with the client. It offers the salesperson the opportunity
to go to visit the client, to be an ambassador
and the spokesperson of the company.
Hence, in the same perspective, a network of salespersons
has been recruited, trained and put in place in the sales and
marketing departments. Also, a framework chosen for their
sales and marketing profile has been put in place to support
the salespersons in order to establish a new client approach.
Finally, to assure the best of the company’s services, the
salespersons will be constantly given uniforms (summer/winter), a new way of identification and of managing the image
of the company which will be, undoubtedly, the bearer of
ambitions of the new sales and marketing strategy.
Indeed, being correctly dressed implies, certainly,
the respect of our clients, whilst inspiring a serious,
credible and respectful image.
This new image of the company’s ambassador will surely
help to stamp out, progressively, the unbecoming signs of the
old and outdated practices in terms of relief and personalised
relationships with the client, whilst planning the major assets
made available to the salespeople, by developing the kindness and efficiency capital.
Furthermore, to encourage the salespeople to improve their
results and increase their competences, a system of bonuses
has been put in place and will be rolled out as follows:
A relief bonus: which may go up to DZD8,000/month for the
salespeople categorised in 12 or more, without this sum
exceeding DZD32,000 for a maximum period of 4 months
corresponding to the period devoted to the relief.
DZD4,000/month for the EPTC and other employees ranked
as 11 and less, without this sum exceeding DZD16,000
for a maximum period of 4 months corresponding
to the period devoted to the relief.
Collection bonus: DZD1,500/month and per employee,
regardless of their category, without the total amount exceeding DZD6,000 for a maximum period of 4 months corresponding to the period devoted to the collection activity.
In parallel, all employees in the sales and marketing department (the sales and marketing agency) will benefit from a
sales performance bonus, which will be paid annually and will
be calculated in accordance with two criteria: the reduction of
the rate of losses and the recovery of debts.
For the losses: grant the personnel 10% of each percentage
of losses earned up to a maximum of 5%.
For the debts: grant 2% of each percentage of the amount of
debts earned up to a maximum of 2%.
The maximum amount of the bonus must not exceed five
times the employee’s basic salary.
Hence, the salespersons, today, have all the assets to succeed and achieve the objectives expected. They have the
necessary means to accomplish their tasks as best as possible and restore the company’s image, as well as the motivation to move forward and take up the challenges.
To encourage LPG
Chakib Khelil: “The State
must progressively increase
the price of diesel”
The State must
increase the price
of diesel whose
extremely low
level encourages
over-consumption
of this fuel deemed
highly polluting
deemed the
inister of Energy
and ines
r
Chakib Khelil
“Gently over a long period, we
will try to change the prices related to diesel compared with
other fuels”, in order to encourage consumers to use clean
energies such as LPG, he indicated during a study day devoted to the evolution of diesel
consumption in Algeria.
Currently, the price of diesel at
the pump (DZD13.70/litre) is
equivalent to almost half the
price of petrol, and only represents a third, approximately, of
the international prices of this
fuel (approximately DZD35/l).
According to the Minister, the
price of this fuel must cover all
the costs induced, whether they
are direct or indirect, in order to
assure producers the autofinancing of potential new projects designed to increase the
supply of this fuel faced with
growing demand.
According to official statistics,
the national demand for diesel
has increased in the last few
years by 10% a year on average,
going from 3.6 million tonnes,
in 2000, to 6.1 million tonnes in
2006. To encourage motorists to
go towards alternative fuels, the
Minister suggested increasing
taxes to include in them the
indirect costs due to diesel
consumption which are not
borne by consumers.
The indirect costs particularly
encompass the costs of using
the road infrastructure and the
impacts on public health whose
cost is borne by the State’s budget, he pointed out.
These indirect costs “should be
included in the price of fuels in
the form of taxes”, whose revenues will then cover the expenses of road infrastructures and
of citizen health protection,
explained the Minister.
For Mr Khelil, “it is not rational
to subsidise imports”, given that
the expected increase in diesel
consumption for 2007 would
entail a reduction in export revenue of almost 20 billion dinars
(about 265 million dollars).
Faced with such challenges, the
energy sector has defined a policy aiming to increase production capacities and diversify the
forms of fuels, such as LPG,
whose national production is
still in surplus.
To increase supply, Mr Khelil
felt that the policy pursued up
until now by the public authorities and which has enabled the
satisfaction, to a large extent, of
demand thanks solely to increasing production capacities,
“cannot constitute a long term
solution”. “Such a policy has
just reached its limits as the refining tool no longer satisfies
demand” in spite of the start of
production of the Adrar refinery, he stated.
He recommends a diversification of the fuel offer.
Energie & Mines
2
anuary 2008
PERFORMANCES
transport
Enac : The right channel
A new organisation
for the company
The putting in place of the
organisation of 2
presented certain constraints
and malfunctions which
re uired its revision capable of responding to the
new context of the company in relation to its si e
its installation and its
work load
Indeed, the new organisation, approved
by the board of directors at the time of
its meeting in July 2007, whose decision, which took effect on 1 September
2007, I signed, responds to the following guidelines :
■ Distinguishing the three hierarchical
levels: strategic, steering and operational.
■ Alleviating the decision-making process through sharing responsibilities.
■ Encouraging, throughout the organisation, the creation of centres of expertise by concentrating in them the
Energie & Mines
2
anuary 2008
resources with the same types of knowhow.
■ Avoiding the central structures from
becoming too involved on a daily basis
in the operational processes and
entrusting in them the roles of design,
planning, guidance, assistance and
control.
■ Giving organisational guidance focused on the projects and creation of operational levels that are increasingly closer to the project's management.
■ Incorporating the cost control objective and avoiding a multiplication of
structures and hierarchical levels which
are expensive and a source of malfunctions.
The main amendments resulting from
this organisation are:
■ The removal of a hierarchical level
(DGA) (alleviating the decisionmaking process at the general management level),
■ The merger of two divisions, Audit
Division and Planning and Control
Division, into a single division called
the Audit and Management Control
Division, abbreviated as DAC.
■ The repositioning of the HSE function into a health, safety and environment division that is compliant with
Sonatrach's strategic focuses in terms
of taking responsibility for this function
within the Sonatrach Group.
■ The creation of three regional divisions (east, west and south), connected
to the construction division. These divisions will be responsible for all the functions (administration and finance, technical, logistics, HSE, internal safety).
■ The reorganisation of the logistics
division as follows:
• The creation of three logistics centre
divisions (Oumache, Djelfa and
Ghardaïa), connected to the logistics
division, as a replacement of the logistics centres and bases.
• Redistribution, at the central level, of
the missions devolved upon the DVL
between the following divisions:
performances
– Equipment Division
– Assets and Common Resources
Division
– Procurement Division
The expected objective of this reorganisation will enable greater flexibility and
adaptability in relation to the market
and to the clientele, major capital gains
in the realisation of projects and a progressive decentralisation towards the
operational divisions. Finally, it should
be specified that these structures will be
put in place gradually, by redeploying,
as a priority, the personnel existing in
the company and/or calling upon
external competences. To this end, I am
launching an appeal to all workers to
take responsibility, each for the area
that concerns them, for the provisions
required in order to perfect the implementation of this organisation which I
will supervise, myself, until it becomes
a reality in the field.
B. Zenasni
Chairman & CEO
The great experience
gained by Enac
through the different
projects realised enables a certain amount
of efficiency that is
re uired to successfully complete its projects from the design
to the commissioning
including the different
stages constituting
the life of a project
• Birth of the project: drawing up of
the tender, signature of the contract
and drawing up of the budget.
• Mobilisation: contribution of the
resources required for the realisation of
the project.
• Engineering and topography: reconnaissance and installation of the works,
carrying out of the different studies and
procedures related to the execution of
the project and definition of the technical specifications and preparation of
the equipment requirements.
• Setting out and opening the path:
This is the report in the field of the
position of the works defined by the
general installation plan using numbered pickets, fixed to the ground in
order to mark out the working area to
be opened, by removing the upper layer
of the land to assure the free circulation
of engines.
• Opening the trench: the trench is
then opened using hydraulic shovels or
slicers, according to clearly defined
dimensions to enable the placement of
the piping inside this excavation.
• Transportation, cladding, pre-alignment and centring of the tubes: the
tubes are transported to the site, clad
and pre-aligned along the track and
along the edges of the trench and then
centred to the points indicated to be
able to match the shape of the land.
• Welding: delicate operation which is
carried out by qualified welders. This
consists of welding the tubes end to
end according to a pre-established welding procedure.
• Non destructive testing: this testing
is carried out by X-raying the welded
joints using a source of radiation.
• Bed face: a bed face of 10 to 20cm is
put in place in the trench, which will be
used as a protective mattress for the
piping to be put in place.
• Coating and placement in the ditch:
coating of the bare parts of the tubes
using an appropriate product to ensure
protection against corrosion. Then, the
piping is put in place at the bottom of
the trench.
• Ballast: this is the filling in of the
conduct with, first of all, loose soil or
sand then with rubble from the excavation of the trench.
• Cathodic protection: consists of protecting the electric currents' piping
using a cathode that may cause the corrosions of the piping.
• Hydrostatic tests: before its commissioning, the piping undergoes hydrostatic watertight and resistance tests.
• Demarcation and site clean-up:
upon the completion of the works,
markers are placed along the pipeline at
clearly defined intervals and the entire
site is cleaned up.
• Demobilisation: return of the resources used to the support structures.
All these stages are carried out in
accordance with duly approved procedures.
Projects underway :
malet El-Amir-AbdEl-Kader Taguine
Among the projects underway we should
mention the gas pipeline construction
project designed for the public distribution
of Z'malet El-Amir-Abd-El-Kader, wilaya
of Tiaret, of a length of 32km and a diameter of 8”.
Client: Sonelgaz
Contractual amount: DZD584,880,200
Execution period: 12 months
The works started on 2 April 2007 and
are reaching a very advanced stage, particularly for the civil engineering and welding works, which lead us to believe that
the project will be completed before the
end of the contractual timeframes.
Looking after the workers
on the west worksites
In the month of Ramadan, the general
management has instructed the structures concerned to look after the personnel
from the west worksites, namely Sidi Bel
Abbès and Taguine (Z'melet Emir AEK).
For Taguine (Z'melet Emir AEK): on average, 50 workers are looked after on full
board: food and accommodation.
For Sidi Bel Abbès, the service provider
with which Enac has signed a catering
agreement and rented out a restaurant in
the town of Sidi Bel Abbès in order to
assure the catering of the workers as of
the first day of the month of fasting awaiting the completion of the installation of
the new living base. The personnel
concerned by this operation have greatly
welcomed this initiative, particularly with
regards the month of Ramadan.
☞
Energie & Mines
2
anuary 2008
PERFORMANCES
performances
☞ Radioprotection
The task of radioprotection is to ensure the respect of the applicable safety
standards in force for the holding, use
and storage of apparatus emitting ionising and radioactive radiation.
Given the harmful effects of this radiation on the human body, in particular,
and the environment, in general, persons wishing to work in this domain
are subject to a medical aptitude visit.
To this end, our mission consists of
making available to our DATR workers
(directly assigned to works under
radiation), the means and equipment
required for their protection, third parties and the environment.
In addition to the equipment made
available to them, namely: pocket dosemeter, noise detector, radiation control
radiometer, our workers are monitored
regularly by the Algiers nuclear
research centre concerning the doses
received by each worker using a
monthly badge film.
The centre also ensures our workers
undergo a periodic medical visit (every
6 months) which enables the worker's
state of health to be known.
Furthermore, Enac has trained them in
the last two years, which will enable the
company to have qualified personnel
and deal with its future projects.
The IT development plan
Furthermore, the Entreprise nationale
de canalisations is strengthening its
situation in the IT domain in order to
improve the working environment of its
employees and assure the correct use of
IT resources. On this aspect, and
within the framework of the implementation of the IT development plan
(ITDP 2006-2007), several investments have been made.
The objectives outlined in the ITDP
were :
• Automation of the management of
the Enac, particularly the one linked to
the company's main mission.
• Installation of the integrated applications.
• Putting in place of the networks
(local and extended) and generalisation
of their uses.
• Acquisition and use of the most
modern tools, particularly in the
domain of engineering.
Energie & Mines
2
anuary 2008
• Putting in place of an IT structure
which will look after the various
aspects related to the operating of the
systems (development, operating, network administration, etc.).
• Assure permanent upgrading of the
personnel by assuring they go on internal
and/or external training courses on IT.
Achieving these objectives would require
a
planned
investment
of
DZD14,394k however the acquisition
of the IT equipment and software
(stock management, equipment management,
HRM)
amounts
to
DZD17,386k, i.e. a realisation rate of
121% which shows the effort of the
company in the modernisation of the
management tools.
Within
this
framework,
the
Engineering division has benefited,
without including the office computers,
two graphic stations, from a computeraided scanning system and a computer-aided tracking table, which represents 20% of the investment.
All this IT equipment, in the headquarters, is connected together by a local
network which was installed in the 3rd
quarter of 2006. The on-network operating is a professional solution which
has numerous advantages:
• Reduction of the number of resources, particularly the printers.
• Easier administration of the user
groups.
• Anti-virus protection and centralised
updating.
• Communication and sharing of information (files, databases, electronic
mail).
• Sharing of an internet connection
using ADSL.
The revision of the ITDP for the period
2008-2010, with the collaboration of
all persons involved, will be launched
for the 4th quarter of 2007 with the following objectives:
• The installation of the software with
licences (acquisition in progress).
• The internal and/or external training
on the use of the software and network.
• The development and/or the acquisition of specific software.
• Putting in place of the company's
intranet and the use of integrated software.
• Launch of the company's WAN
(Wide Area Network) project to incorporate the company's regional dimension into real-time management.
To conclude, by using the IT resources
to the maximum (sharing of information and resources) by using the local
network, our company will gain by
reducing the costs of using the existing
resources. It is in this sense that the IT
team is sparing no effort in responding
as quickly as possible to your requests
in the domain.
performances
Fibre optics
Sonatrach invests
in telecoms
With more than 2
km of private fibre optics network the AETC
created by Sonatrach and Sonelga will be the country s largest telecommunications company in the domain
Still within the framework of the diversification of its portfolios, the Algerian
oil and gas Group has decided to invest
this time in the telecoms sector, by
creating a brand new entity which is the
telecommunications joint venture company.
The signing ceremony, which took
place at the headquarters of the company Sonatrach in Hydra, saw the presence of the Minister of Energy and
Mines, Mr Chakib Khelil, and the
Chairmen & CEO of all companies
concerned.
This company, which is in fact created
by two different groups, even if they
come under the same energy sector,
namely Sonelgaz and Sonatrach, will
have the name of the AETC, i.e.
Algerian Energy Telecom Company.
With registered capital of 200 million
dinars, this company will have the main
missions of managing and marketing
the surplus capacities made available by
the two partners, and it will also have to
provide telecommunication services to
the domestic and international market,
in line with the legislation and regulations in force.
For Chakib Khelil, the AETC will use
the synergies in the domain of telecommunications, by using the capacity
available in the fibre optic systems
which are owned by Sonatrach and
Sonelgaz. “We have the largest fibre
optic system in Algeria”, he specified,
pointing out the fact that all the networks run alongside fibre optic lines, as
well as those of Sonatrach, with
regards the transportation of gas and
oil.
“In all, no less than 24,000km of fibre
optics are concerned”, therefore indicated the Minister, adding that in terms
of fibre optic capacities, the AETC will
be the country’s largest telecommunications company.
Hence, for Mr Chakib Khelil, in addition to satisfying the Algerian consumer’s demand and giving him a better
service, the new company will prepare,
in terms of interconnection projects
with the other countries “whether with
Spain, Italy or Nigeria, within the framework of the Trans-Saharan pipeline,
the company will earn money, create
jobs and, above all, contribute to the
development of these two companies,
outside hydrocarbons”.
For his part, the Chairman & CEO of
Sonatrach specified that this private
telecommunications network has been
built along pipelines since 1994, the
year when the GME gas pipeline was
constructed, and that its first vocation
is to assure the needs in terms of operating, remote supervision, Scada and
securitisation of the transportation-bypipeline facilities such as the pumping
and compression stations.
This specialised transmission network
has been developed to incorporate the
different regions of the company’s activities and has enabled the putting in
place of a private digital telephone network, of a capacity of 65,000 lines serving all Sonatrach industrial sites,
according to Mr Meziane, who further
stated that this company will have a
capacity of a total length of 10,000km
of interconnected fibre optics, by 2008,
according to the outlooks outlined on
the telecommunications executive plan.
The two partners committed to this
joint stock company will thus have
equal stakes, i.e. 50% each. The provisional headquarters of this company is
set up on Boulevard Krim Belkacem,
whilst awaiting the completion of its
final headquarters in the cyber-park of
the new city of Sidi Abdellah.
Energie & Mines
2
anuary 2008
PERFORMANCES
performances
Desalination
A programme which
has 13 plants
Signature of about twenty
contracts to construct 2
seawater desalination
plants
At least 20 contracts were signed between
the different partners of seawater desalination
projects
in
Mostaganem
3
(200,000m /day) and in Cap Djinet
3
(100,000m /d), during a financial closing
ceremony which took place at
Sonatrach's headquarters in Algiers.
The contracts mostly concern the financing, the running, the construction and
the maintenance of these projects, it was
indicated on site.
The Spanish consortium Inima Aqualia,
which won the two contracts, Sonatrach,
Sonelgaz, the company Algérienne des
Eaux (ADE), Banque extérieure d'Algérie
(BEA) and the National Bank of Algeria
(NBA) are the main partners in these projects. With a cost of 360 million dollars,
the construction of the two plants will be
80% financed by BEA and NBA and 20%
by the equity of the two project companies, each owned 49% by Algerian Energy
Company (AEC) and 51% by the Spanish
company Inima Aqualia.
As for all the other seawater desalination
projects, it is the Sonatrach Group which
will buy the desalinated water from
Mostaganem and Cap Djinet before selling it to the ADE which will sell it, in
turn, to the end consumer.
The best price per cubic metre proposed
by the Spanish investor is 72 American
cents for the Mostaganem plant and
72.75 cents for the Cap Djinet plant.
At the end of the signing ceremony, the
Minister of Energy and Mines,
Mr Chakib Khelil, revealed that the desa-
lination programme, which has 13 plants,
is “mid-way” through its completion.
Once completed, it will enable a volume
of 2.3 million cubic metres/day to be
assured. By 2010, 10% of drinking water
will be supplied by desalination.
There are still 5 similar projects currently
at the tender study stage, including the
Mekta project (Oran) of a capacity of
3
500,000m /day, which represents one of
the world's largest desalination plants, if
not the largest, according to the Minister.
Mr Khelil also emphasised the importance of the financing model used in this type
of operation - project financing - which
consists of financing the project by bank
loans repayable thanks to the revenue
generated by the selling of the desalinated
water. “It is this revenue that guarantees
the loans taken out with banks”, he
explained.
Signature of contracts related to the construction
of the Fouka seawater desalination project
All contracts related to the construction of the Fouka seawater
desalination plant, in the wilaya of Tipaza and with a capacity
of 120,000m3/d, have been signed in Algiers between the different parties involved in the project.
The documents were signed by the representatives of Algerian
Energy Company (AEC), the Sonatrach and Sonelgaz Groups,
the company Algérienne des eaux (ADE), Crédit populaire
d’Algérie (CPA) as well as the companies SNC-Lavalin
(Canada) and Acciona Agua (Spain) which will realise the project. They particularly deal with a master agreement, a partnership agreement, a contract to sell and buy the desalinated
water, a land rental contract and an investment agreement.
A joint stock company (Miyah Fouka SPA) has been created for
the monitoring and operating of the project. It is 51% owned by
SNC-Lavalin and Acciona Agua (25.5% each) and 49% by the
AEC. The Fouka plant should be commissioned in October
2009. Its cost is estimated at 180.17 million dollars, 80% financed (144 million dollars) by a loan from Crédit populaire
d’Algérie (CPA), whereas the remaining 20% (some 36 million
dollars) is assured by the investors.
This project, which will use the reverse osmosis technology for
the water desalination, will be realised according to the BOO
(Build, Own and Operate) formula.
As for all the other seawater desalination projects, it is the
Sonatrach Group which will buy the desalinated water from
Energie & Mines
0
anuary 2008
Fouka at the price of 0.7505 dollars per cubic metre (DZD54)
before selling it to the ADE which will sell it, in turn, to the end
consumer. The Minister of Energy and Mines, Mr Chakib
Khelil, present at the ceremony, specified that the desalinated
water which will be sold by Sonatrach to the ADE must be reimbursed by the Ministry of Finance.
To this end, he stated the desire to see the agreements related to
this concluded as soon as possible. Furthermore, the Minister
called upon the parties concerned by the construction of desalination plants to accelerate the financial closing procedures in
order to push ahead with the construction timeframes.
The government has scheduled the construction of 13 seawater
desalination plants by 2009 with a total capacity of 2.3 million
cubic metres/day. Each plant’s production varies between
50,000 and 500,000m3/d.
Angola invests in an important hydroelectric project
Angola will invest 158 million dollars in the renovation of the
Gove dam, in a central province, to supply electricity to some
regions of the country, indicated the Minister of Energy and
Water, Mr Botelho de Vasconcelos. The government has approved the investment plan for the renovation of the dam which “is
crucial given its importance for the nation's economic and
social development, particularly for the central and southern
regions”, stated Mr de Vasconcelos.
performances
The Competition Council
The Competition Council will only
act upon the request of operators
The Competition
Council the entity
responsible for combating anti-competitive practices created
in 2 3 but never activated since will only
act upon the express
re uest of the economic operators concerned indicated the
inister of Trade
r El achemi
Dja boub
“If there are no complaints from economic operators (on the existence of
monopolistic positions on the market)
the council will not intervene”, specified the Minister to the APS on the
fringes of a questions’ session at the
National Popular Assembly (APN).
“We have not invented anything and we
are not affecting the freedom of undertaking: the Anti-trust Act is a law of the
very liberal right in use in all countries
of the world”, he said by way of
response to the opponents of the provisions of a bill, recently approved by the
government, proposing a cap of 45% of
the market shares of each company or
consortium of companies.
The Competition Council, which this
text will reactivate, will intervene by
self-seisin only in the event a new competitor is prevented from appearing on
the market. The verdict would then be
that the “monopoliser” would be forced
to sell its surplus shares to its competitors, he explained. This mechanism had
aroused the upset of several employer
associations which saw in it a means of
restricting or hindering the development of private companies.
According to these organisations, the
establishment of competition means,
above all, fighting against anti-compe-
titive practices (by-pass laws, favouritism in awarding contracts, etc.),
according to the principle of equal
opportunities.
Another argument from employers:
restricting shares is practiced on a market which is experiencing over-production, whereas the Algerian market is,
overall, still restricted in terms of supply. These operators thus uphold, to
support their position, that if such or
such a company is in a monopoly situation, it is because it has deserved it by
responding correcting to demand
without however prohibiting market
access to other operators. With regards
the black market, the Minister disputed
that “excessive” figure of 1 million traders present on the black market, in the
absence of reliable and verified data. It
should be pointed out that an interministerial council will shortly examine
an action together with the sectors
concerned (police, security services,
health, trade, etc.) in order to combat
this plague.
“The solution is to contain these black
market activities to pour them back
into the formal market”, said the
Minister upholding that the project for
“100 trading sites per commune” as
well as the programmes to create community and wholesaler markets will go
in this direction. “We are not going to
hunt it - it is not the club policy that we
are looking to practice”, he assured.
Questioned by the APS on where
Algeria is with regards its membership
to the World Trade Organisation
(WTO), the Minister indicated that a
new offer of customs rates, recently
approved by the government, had been
submitted to the WTO.
The date of the tenth round of negotiations between the WTO and Algeria
will be fixed depending on the organisation’s response to this offer, he further added. The Minister refused to
give details of this offer.
Energie & Mines
anuary 2008
PERFORMANCES
performances
Chakib Khelil at the El Moudjahid Forum
“Algeria has a growing
strategic role
on the foreign markets”
The inister of Energy and ines
r Chakib Khelil was the guest of the El
oudjahid Press Centre within the framework of a conference-discussion on
the world economic context and Algeria s position the bets on the future
With regards the international context it remains very favourable with prices
which remain high
Strong increase
in investments
The Algerian context is marked by the
strong growth of investments in seawater desalination. The national context is
also one of an existence of updated
legislation on hydrocarbons and the
establishment, within this framework,
of a tax on extraordinary profits, intended for the petroleum companies in our
country. As a reminder, these taxes
brought in more than 3.5 billion dollars
in 2005.
The Algerian context is also that of the
dispute
which
exists
between
Sonatrach and some Spanish companies with regards projects, on which the
Minister gave an explanation in support
of this during the discussion.
Algeria leading OPEC
The Minister was concise in his speech
and pertinent in his responses and
remarks. Mr Chakib Khelil, who has
just been appointed to the rotating presidency of OPEC, defended the idea of
a hydrocarbons’ sector which, whilst
remaining in pole position within the
framework of the Algerian economy,
continues to be pulled towards excellence, positioning itself on foreign markets.
The Minister advocated a diversification of our sales abroad and the sharing
of risks between Sonatrach and its
partners. Mr Chakib Khelil recalled the
total amount of the financing of investments with regards Sonatrach’s development in the medium term which
exceeds 32 billion dollars, of which
almost 2/3 are devoted to research and
production activities, i.e. 20 billion dol-
Energie & Mines
2
anuary 2008
lars, of which 8.3 billion dollars will be
assured by Sonatrach’s partners.
He mentioned Sonatrach’s role in the
regulatory mechanism - a company
which is succeeding in standing out
through its firm rooting in the great
challenges, its organisation and its
human resources. The Minister did not
obscure any question, replying with the
clarity and honesty renowned of him to
questions asked by the audience, comprised of senior officials from the sector and from the economic and social
world also, of representatives of the
Chamber of Commerce and Industry,
of SME, of representatives of research
firms, experts and consultants and also
representatives of the press.
A favourable international
context
The speaker recalled, in his introduction to the discussion, this international
energy context which offers good outlooks, a consolidation of the energy
industry sector in our country which
enables the great balances to be kept in
place and the challenges to be taken up.
The speaker focused on the upwards
trend marking the market in terms of
prices and the forecasts which all
converge towards the promotion of
alternative energies.
Mr Chakib Khelil also recalled how
much the hydrocarbons sector had
benefited from its evolution in the
contribution of new technologies and
the immense impact of these on the dif-
performances
ferent cycles which mark the operating
of companies (prospecting, exploration, extraction, marketing and selling,
etc.). Technology has made a lot of
things possible, confirmed the
Minister, and has opened up the markets. It has enabled the mobilisation of
major resources, making them available
to the markets and not only in the
hydrocarbons’ sector but also in the
steel and copper sector where revenues
have been able to be doubled, even quadrupled in the last few years.
The emergence of competences in the
management of processes and engineering has been noted in the companies
and in the services sector.
Gas production which
is gaining importance
Mentioning gas, the Minister revealed
that production has continued to gain
in importance. Today, gas is the most
coveted fossil energy. It represents 25%
of the world energy balance. It is considered to be increasing in the longer
term by the Minister who spoke of 80%
by 2020.
Mr Chakib Khelil mentioned the problems related to supply and security
and to conducting strategies to this
end, whose examination is of a planetary nature. The evolution of the gas
industry has led to restructuring operations to which Algeria has had to adapt.
The speaker recalled the development
of the Algerian gas industry and of the
privileged position of our country
which
is
the
number
one
Mediterranean producer.
Algerian exports constitute 90% of the
Mediterranean region’s exports.
Algerian exports constitute 90% of the
region’s exports. Sonatrach has delivered 62 billion cubic metres. The
Minister mentioned the development of
the gas pipeline branch, the LNG
branch, stating that Sonatrach has 4
liquefaction plants, 3 in Arzew and 1 in
Skikda, which produce 35 billion cubic
metres, reduced, today, to 25 billion
cubic metres after the accident which
affected the Skikda plant.
For Mr Chakib Khelil, Algeria will
continue to respect its commitments.
Sonatrach, he said, has had to react by
developing an important programme,
particularly in the domain of infrastructures geared to exports, and
controlling access to LNG, access to
national reserves and the development
of the downstream with petrochemistry. The forecasts for 2010 state 85
billion cubic metres. Sonatrach is
counting on the construction of structuring infrastructures.
edga and Galsi
two mega-projects
Mr Chakib Khelil recalled the existence
of the two mega-projects which are
Medgaz and Galsi, one with Spain, the
other with Italy, and TSGP (Nigeria Algeria). For Medgaz, 8 billion cubic
metres is planned with a commissioning expected for 2009, and one billion
for Galsi. In fact, account taken of the
difficulties encountered with the
Spanish companies, the commissioning
of the Medgaz project has been pushed
back until 2011.
There are two gas pipeline systems
connecting Algeria to Europe which is
an exceptional partner. Algeria, it
should be remembered, is one of
Europe’s top three gas suppliers,
alongside Russia and Norway.
Currently, more than 95% of Algerian
exports are intended for Europe and,
more particularly, almost 40% intended
for Italy.
3
of Europe s imports
Europe’s supplies of Algerian natural
gas represented almost 20% in 2003.
Algeria currently assures 30% of
European natural gas exports, a volume
that is increasing with the doubling of
the gas pipelines serving Spain and
Italy, namely Medgaz and Galsi and, by
2015, the TSGP connecting Nigeria to
Algeria. Brussels wishes, to this end, to
☞
Energie & Mines
anuary 2008
PERFORMANCES
performances
Algeria is not stopping
at a role of purveyor
☞ conclude
a strategic agreement with
Algiers to guarantee its energy security.
The EU wishes to be assured, through
a strategic-type partnership, of stakes
in the exploration-mining cycle,
transportation of hydrocarbons so as to
control its supplies, and even, in certain
cases, a stake in the European domestic market. Algeria might, then, become
in the next few years the second largest
gas supplier of the European Union
after Russia. The new European energy
policy, adopted last March by the
European Council recognises, in
Algeria, an increasing strategic role
particularly in terms of liquefied natural gas (LNG) - one of the priorities of
the European energy policy to assure
the security of its supplies. Recalling
the existence of the export gas pipelines, the Minister told the story of the
question by noting that there are two
gas pipeline systems connecting Algiers
to Europe.
He cited the Transmed (Algeria-Italy
via Tunisia), the GEM (MaghrebEurope gas pipeline) operational since
1996 (Algeria-Spain via Morocco),
where it is connected to the Spanish
and Portuguese operating and distribution networks.
As of 2001, a feasibility study was launched concerning Medgaz (Algeria-
Energie & Mines
anuary 2008
Spain with an extension to France).
The project is under construction, but
should experience delays as already
specified due to differences between
Sonatrach and Spanish companies
then stakeholders in the project.
In 2002, Sonatrach studied the feasibility of the Galsi: 1,465 km long,
connecting Algeria to Italy for a value
estimated at 2 billion dollars. The completion is expected for 2008.
2 to 3 billion cubic metres
with the TSGP
With regards the Trans-Saharan Gas
Pipeline (TSGP), of a length of 1,037
km, it should transport 20 to 30 billion
cubic metres of gas a year. The total
cost of the project is estimated at over
10 billion dollars. Sonatrach, for the
Algerian side, and NNPC, for Nigeria,
which are responsible for the formalisation of this project, have stated that the
company Sonatrach, already committed to many large-scale projects, can
find within the framework of the TSGP
a way of expressing itself alongside
large international companies specialised in engineering, construction and
the management of this large-scale
African project which is the TSGP.
For Mr Chakib Khelil, Algeria is not
stopping at a role of purveyor, trying to
assure added value on the final sites, in
Great Britain, for example, in Spain, in
Italy, with the creation of specialised
marketing subsidiaries, some of which
are already operational. With the
United States there are three letters of
intent.
These agreements provide for the supply of the American market with
Sonatrach stakes and selling on the
American market. The Minister recalled all the efforts made by Algeria to
develop LPG and the partnership
initiated in the domain with Japan and
other partner countries.
He also mentioned the increased liquefaction capacity and the reinforcement
of the transportation sector, particularly maritime transportation, with the
acquisition of large methane tankers to
serve the Asian and American markets.
For Mr Chakib Khelil, gas has a major
market share and oil will continue to
play an important role still through the
development of its growth potential
(more than 50% growth).
Algeria which had a quota of
900,000b/d has 1 million b/d currently. The speaker recalled that Sonatrach
had numerous sale options, that it was
keen to optimise its exports, that it had
new riches in America and in Asia, that
it was keen to encourage the increased
capacities of the methods of transport,
becoming shareholders abroad, the realisation of storage capacities and risk
management.
Considerable needs in Asia
Only the Asian market has considerable
needs and offers great opportunities for
Sonatrach. To access it, Sonatrach has
decided to purchase, as already specified, large tonnage vessels, to rent storage capacities in Korea and to reopen
its offices in Singapore.
Hence, Sonatrach is showing great
availability in order to respond to the
market’s demand. The discussion,
which accompanied the Minister’s
report, enabled him to specify a certain
number of points that are part of the
sector’s policy. With regards the eventuality of preserving our oil and gas
reserves, no one can say, stated the
performances
Chakib Khelil :
The Algerian subsoil is under-exploited
and we will find a lot more gas than
oil in the future
■
New calls for tenders for the operating of 15 blocks in the South.
From 2001 to 2007, the dollar lost 40% of its value but, at the same time,
the price of the barrel of oil tripled or quadrupled, and for the year 2007
alone the price of the barrel increased by 30%.
■ The recent surge in prices, above 90 dollars a barrel, is, above all, due to
the tension that has appeared on the border between Turkey and Iraq, with
the risks of a disruption of Iraq’s important oil production.
■ Even if it does not affect the relations between the two countries
The Algerian-Spanish gas dispute is “political”.
■
The Minister of Energy and Mines, Mr Chakib Khelil, indicated yesterday at the
El Moudjahid Forum that new appeals for tenders will be launched shortly for the
exploration and mining of 15 hydrocarbons’ blocks in the South with priority given
to companies which allow Sonatrach to access their resources as well as a transfer of technology.
“The awarding conditions of these appeals for tenders are different from the previous ones, as Algeria is looking for partners that, in exchange, give access to
their reserves and to the technology”, specified Mr Khelil, emphasising that the
codification of these new conditions was “being prepared”.
“Algeria is looking for partners with these characteristics”, insisted the Minister
whilst emphasising Sonatrach’s desire to use these new conditions as “leverage
for its development”.
Furthermore, to a question on the consequences of the euro’s increased strength
against the dollar on the national economy, Mr Khelil reiterated his conviction that
the weakness of the dollar, the main currency for paying for Algerian hydrocarbons’ exports, was cushioned by the current upsurge in oil prices.
“From 2001 to 2007, the dollar lost 40% of its value but, at the same time, the
price of the barrel of oil tripled or quadrupled, and for the year 2007 alone the
price of the barrel increased by 30%”, he explained to support his point of view.
For him, the attenuation of the effects of a weak dollar is also the consequence
of the actions of the country’s monetary authorities, particularly the Bank of
Algeria and its regulatory role in the management of foreign reserves, which
amounted to more than 90 billion dollars at the end of June.
Mr Khelil added, to support his analysis, that “world economic growth in 2008 will
be greater than this year due, in particular, to the fact that the recession in the
United States will not affect world growth”.
To a question on “the risk of future generations being deprived of hydrocarbons”,
Mr Khelil stated that “the Algerian subsoil is under-exploited” with about ten wells
per 10,000km2 compared to 100 wells per 10,000km2 in other countries.
“There is still a great potential in Algeria and we will find a lot more gas than oil in
the future”, he mentioned.
Last year, Algeria recorded 18 discoveries and 16 others from January 2007 to
date, he added. With regards the situation and the outlooks of the international
petroleum market, Mr Khelil upheld that the price of oil was, for the fourth consecutive year, achieving record levels in spite of a “well supplied” market, but that it
is driven by geopolitical and speculative factors which go beyond the role of an
organisation such as OPEC.
According to him, the recent surge in prices, above 90 dollars a barrel, is, above
all, due to the tension that has appeared on the border between Turkey and Iraq,
with the risks of a disruption of Iraq’s important oil production.
The Minister also mentioned the weak refining capacities as a factor pushing the
prices upwards. In this situation, “the increase in OPEC’s supply by 500,000 barrels a day, as of 1 November, is perceived as insufficient” by market players
preoccupied, according to him, by the need to rebuild stocks for the winter season. Nevertheless, oil prices will “ease off” as of the second quarter of 2008, affirmed Mr Khelil, mentioning that this is a period of the year when prices traditionally undergo a seasonal drop.
Minister, if we will double or triple the
reserves. There have been 16 discoveries this year and the Algerian subsoil is
under-exploited with a dozen wells per
10,00km2, far from the international
standard.
There is still great potential
to be discovered
There is still great potential to be discovered. We are not, stated the
Minister, like Qatar and Kuwait, small
countries that know what their reserves
are. We still have the possibility of discovering. There are also the country’s
needs; we cannot reduce the State’s
revenues by half. We need revenues and
there are needs to be satisfied. To protect the interests of the future generations, we need to look elsewhere and
aim to diversify our economy. We are a
mono-exporter country and we have to
diversify our production potential; if we
do not do so, there will be a real problem for the future generations.
Regulation work
The Minister further noted that regulation work is undertaken in the sector
with the setting up of specialised institutions with some responsible, specifically, for regulation and others for optimising the reserves and protecting
them. The Minister added that there
have not been precise responses once
and for all to the preoccupations of
some concerning the protection of
reserves for the future generations. On
a question concerning the Minister’s
recent statements on the euro-dollar
rate, Mr Chakib Khelil confirmed his
analysis which consists of saying that
the increase of the price of the barrel
compensates for the losses recorded
with regards the exchange rate.
3
increase in the price
of the barrel in 2
Between 2001 and 2007, he said, the
price of the barrel has quadrupled. In
2007, there was a 30% increase in the
price of the barrel. Now, the dollar,
explained the Minister, has not lost
30%. The speaker recognised a small
loss of purchasing power but the current price of the barrel compensates for
this. With regards the dollar, it will
continue to depreciate over the coming
months, with an impact on the global
☞
Energie & Mines
anuary 2008
PERFORMANCES
performances
☞
economy. But world economic growth
for 2008 is more important with more
interesting outlooks for world demand;
that said, on these problems, the Bank
of Algeria perfectly manages things.
With regards relations with the
European Union, the Minister revealed
that the EU is looking for energy at the
lowest price. It has the objective of opening up its energy market to have an
open, transparent and competitive
market.
The speaker recognised that the EU is
experiencing difficulties in putting this
in place, because the large operators do
not want to lose their market.
The emergence of independent producers might benefit the European consumer since competition between operators will, necessarily, be created.
The objective remains to reduce the
costs for the European. But there is not
a unified position in any case. Not yet
on this matter. Spain, Germany and
France have, for example, different opinions from that of Poland. The countries already mentioned want to keep
control over the gas pipelines. This,
however, is not a concern for Poland
which does not have to solve this type
of problem on its territory.
Algeria remains well
positioned
With regards Algeria, these ups and
downs do not affect our exports,
confirmed the Minister who added that
Energie & Mines
anuary 2008
Algeria remains well positioned. The
reciprocity so often evoked would like
for it to be possible for European operators to work in the producer countries and export their gas.
For Algeria, this does not pose a problem: the market is open. If there is
reciprocity, it is up to us to claim it and
to demand it. Concerning a question
on the optimisation of exports, we have
awaited, affirmed the Minister, the
amendment of the Hydrocarbons Act
and the application decrees to study the
new appeals for tenders which will not
be of the same nature as in the past.
Sonatrach will negotiate the management of the blocks which will require
recognition of the qualification of the
companies which have already defined
technical characteristics. The appeal
will be real leverage concerning a question on the Algeria-Spain dispute.
Three matters presenting
difficulties with Spain
Mr Chakib Khelil confirmed that, for
the time being, there are three matters
which all present difficulties of application between the two partners. The first
matter concerns Medgaz. Both parties
had decided on the joint construction
of this project.
At the same time, a new Hydrocarbons
Act has been published in Spain which
imposes conditions which are totally
restrictive for Sonatrach which, in spite
of a spirit of compromise, has not
managed to settle the problems which
were posed. With regards the second
dispute, that of the prices, the Minister
spoke on this subject of index clauses
and upheaval clauses. Sonatrach had
wished to revise the gas delivery prices
due to the market’s evolution - a claim
which is, furthermore, respectful of the
clauses of the contracts signed.
The rigidity of the Spanish position has
led Sonatrach to go to international
arbitration. The proceeding is going
ahead. The Minister confirmed that no
progress has been made on this problem. Proposals have indeed been made
by the Spanish firm, Gaz Natural, but
they remain below the Sonatrach offer.
Gassi Touil is the third matter in dispute, according to the Minister.
Mr Chakib Khelil recalled the tense
relations which have meant that the
Gassi Touil field has been put up as
part of an appeal for tenders.
Companies have been put in competition with each other on the international level. Repsol and Gaz Natural, the
two Spanish firms, submitted the best
tender. The site should have been commissioned in 2009. Repsol and Gaz
Natural asked for a revision due to too
high costs, confirmed the two firms’
representatives. The negotiations and
discussions dragged on and, given the
lack of solutions, Sonatrach terminated
the contract.
Sonatrach assumes
the project alone
The matter has gone to court. On 4
July, the reconciliation procedure
which should have taken place did not
achieve anything. 60 days after its triggering (the regulatory period) the
Spanish had not used it. Hence
Sonatrach was obliged to finalise the
termination of the contract.
Sonatrach is taking the matter back in
hand and will itself, without its partners, execute it with three years’ delay
on the initial timeframes.
The third matter is of a commercial
nature, reveals the Minister, who questions why there are so many difficulties.
Indeed, remarked the speaker,
Sonatrach has about forty contracts
which it negotiates in the best conditions. Now, in Spain, the prices are
regulated and any variation on the prices has repercussions on the Spanish
consumer - so as well as being com-
performances
mercial, the conflict is taking on political appearances.
edga a political problem
The Medgaz problem is, in the eyes of
the Minister, a political problem which
remains hanging on the price regulations. Concerning a question on taxes
on the super-profits made by foreign
companies, the Minister talked about
1.5 billion dollars of taxes. With
regards the price of gas, he recalled that
this is indexed to the price of oil. Mr
Chakib Khelil expects the same tax
revenues for 2007. Concerning a revision by OPEC of the production level,
the Minister recalled that no OPEC
meeting is planned before the one planned in Abu Dhabi next December.
The Minister hopes for an easing-off of
the market in the second quarter of
2008. Concerning the creation of an
OPEC of gas, Mr Chakib Khelil recalled the existence of a think tank put in
place in Doha and lead by the Russian
Minister of Energy. The group has to
submit its conclusions. The Minister
revealed that he has reassured the
European Union about the objectives
pursued. Nothing indicates that there is
a desire to embarrass the EU in this
matter.
Indexations an historic curve
Concerning gas being indexed against
the price of oil, this reality follows an
historic curve. Hence, oil followed coal
in its era. This is done for technical reasons. Oil and gas may be competitive
except in transportation at this stage of
the technology. In Europe, we find ourselves at the start of maturity in gas,
unlike in the United States once mature, the gas market will gain in size. It
may then move away from oil, but this
will not mean that it will be cheaper.
The Minister does not exclude tensions
on gas in the future due to the variation
in demand.
A clause which exists
in all contracts
Concerning upheaval clauses – such
clauses exist in all contracts. It is triggered when there is an upheaval in the
market. You then have to sit around a
table and discuss. If the clause does not
exist in the contract, the discussion
cannot be possible. Concerning the tax
on super-profits, this also exists in
Great Britain and in the United States.
Algeria applies it without discrimination on all companies.
A rapidly expanding continent
Concerning the African continent and
its energy resources, the Minister
revealed that this is a region which is
rapidly expanding and new players are
on
the
horizon
(Mauritania,
Madagascar, etc.) alongside those
already in place. The European Union
supports structuring projects with
Africa, particularly for recovering flared gases. Sonatrach, which remains
very active on the foreign markets, is,
of course, interested in the African
market, in Nigeria, Mauritania, Sudan,
Chad, Egypt and Libya where it is
already present on these two markets in
particular.
Mr Chakib Khelil confirmed that the
problem of deforestation in Africa is
still a worry. LPG must respond to the
wood shortage. The great problem with
the LPG distributed is the prices, the
transportation and the storage - all problems posed at the Afrec and at the
African Union level.
Countries must take charge
of corruption
Concerning the money from oil which,
according to some milieus, is used for
corruption and conflicts, there are,
noted the Minister, specialised organisations which evaluate this type of
situation and particularly the risks and
extent of corruption, in Germany and
in Great Britain which bring together
the interested companies and want to
work in transparency. That said, the
problem with corruption is a work
which must be dealt with in the countries. The Minister recognised that
some of them do not have elements of
protection, stating that the revenues do
indeed go to the Public Treasury. It is
the countries themselves which have to
take the initiative and assure the
control.
that, upon study, the market was deemed interesting: 20 to 30 billion cubic
metres is profitable, said the speaker.
There is, he said, currently a break
down in the project, due to the recent
presidential elections in Nigeria, but
the course of negotiations will resume
with the new authorities for the execution of the project.
We will look for partners to support the
project.
Same approach as for
and Galsi
edga
Our approach is the same as for
Medgaz, or Galsi; we already have
experience in this type of project,
confirmed the speaker. Concerning the
WTO and the issue of energy, this is
only posed by some partners for competition reasons, stated the Minister.
The gas market is not yet mature; neither is there homogenisation at the fiscal level, particularly in Europe.
Capacities but not sufficient
infrastructures
Algeria has the capacities but not sufficient infrastructures to transfer them to
Europe. The price of Algerian gas
reflects the costs; it is not subsidised.
Concerning Sonatrach and the development of SME, Sonatrach is interested in this market. It is counting on its
subsidiaries which will appeal to the
SME. Concerning seawater desalination, the project has been entrusted to
Sonatrach by presidential decision.
Concerning the president of OPEC, he
has a role of representing the
Organisation with its partners and
contact points. He is appointed for one
year and plays an important role within
the framework of the Organisation.
Alongside the President is a Secretary
General who has just been appointed
recently also.
The TGPS a profitable project
Concerning a question on the NigeriaAlgeria gas pipeline project, the
Minister stated that the project is profitable. We did not think this at the start,
admitted the Minister, who confirmed
Energie & Mines
anuary 2008
PERFORMANCES
performances
Hearing of the members of the government
President Bouteflika devotes
a session to the energy
and mines sector
■
The electrification rate reached
in 2
■ The gas penetration rate reached 3
almost 1 3 of the population
benefits from two sources of energy: electricity and natural gas
■ Strong growth in investments in the sector
The President of the Republic, Abdelaziz
Bouteflika, has devoted, within the framework of the continuation of hearings
of the members of the government, a
session to the energy and mines sector.
During this meeting, the achievements
and development outlooks of the sector
were reviewed, particularly matters with
a direct impact on the life of citizens and
the specific matters requiring State
intervention and/or support.
The report on the different
matters reveals
• Strong growth in investments in the
hydrocarbons sector to increase the
level of natural resources and their promotion.
• The importance of the investment
programmes in the country’s electrification and the public gas distribution,
with the expected contribution of the
State.
• The extent of the national seawater
desalination programme, in partnership, aiming to secure the country’s
drinking water supply.
The matter related to energy development was the subject of a particular
examination, in its components related
to electrification and public gas distribution, to the structuring projects of
the energy branch, to the development
of new energies and to the promotion
of natural gas fuel.
Electrification and public gas
distribution
The 2005/2009 programme is presented as follows:
• For electrification, this consists of
putting in place 17,479km of medium
Energie & Mines
8
anuary 2008
voltage and low voltage (MVLV) network, the connection of 337,250 households, 8 diesel plants and 16 solar
villages. The total cost is 45.3 billion
dinars.
• For gas distribution, this consists of
putting in place 9,700km of transportation network, 23,905km of distribution network, 4 propane stations and
the connection of almost 1,207,300
households. The total cost, 295.2
billion dinars, will be borne by the
State.
In 2006, the electrification rate reached
the 97% threshold which is a realistic
maximum rate that is difficult to exceed
due to the sparse nature of the remaining communities located in inaccessible zones. The gas penetration rate reached 38%; almost 1/3 of the population benefits from two sources of energy: electricity and natural gas. In the
next three years, it is planned to double
the current effort to achieve a penetra-
tion rate of 57% and make 2/3 of the
population benefit from natural gas.
In terms of achievements entrusted to
Sonelgaz, it should be pointed out that
18 isolated villages of the south are
powered by photovoltaic solar energy.
Structuring projects of the
energy sector
To satisfy the energy requirements of
the development programmes (eastwest motorway, railway network, seawater desalination, water transfer, housing), the adaptation of the energy networks relates to the accomplishment,
by the end of 2009, for an amount of
133 billion dinars, of 4 projects:
• 400KV east-west backbone, under
construction: DZD35 billion
• 400KV backbone – being launched:
DZD30 billion
• North-south backbone (High
Plateaus): DZD40 billion
• East-west/High Plateaus gas loop:
DZD28 billion.
performances
Development
of new energies
As part of the development of new
energies, it should be pointed out
that 18 villages of the Great South
have benefited from solar electrification, as part of the 95/99 national
electrification programme.
A second operation will be carried
out by virtue of the 2005/2009
growth support programme and will
concern the electrification of 16
villages in the wilayas of the High
Plateaus and south of the country.
Likewise, the launch is planned of
certain projects planned by the
“electricity production infrastructures’ development indicative programme” which aims to increase
the percentage of renewable energies in the national electricity production balance to 5% by 2015.
Promotion
of natural gas fuel
The national natural gas fuel development programme is broken
down into two stages:
• One programme for the 20072011 period for an amount of 2.7
billion dinars will concern the
acquisition of 175 buses by the
public urban transport companies,
the construction of 40 distribution
stations and their connection to
natural gas. The State will assume
the differential of the acquisition
cost of the buses using natural gas
fuel (additional amount evaluated at
15 to 30%), the investment related
to the distribution stations and the
connection costs.
• One programme for the 20122025 period, for an amount of 20.3
billion dinars, will concern the
construction of 112 service stations, the acquisition of 500 buses
dedicated to natural gas fuel. The
total amount to be borne by the
State will be 7.8 billion dinars.
The sector’s evaluation has also
revealed :
• The sustained development of the
hydrocarbons’ activities since the
start of the decade, with a growth in
investments which are likely to be
maintained in the medium term, in
view of increasing the level of natural resources to assure long term
coverage of the country’s energy
requirements and better promotion
on the international markets.
• The significant effort to expand
the electricity production capacities
to secure the satisfaction of heavily
increasing national demand, which
will be continued by long term
investment programmes, including
in terms of the country’s electrification and public gas distribution,
whose programmes are supported
by the State’s contribution.
• The launch encouraging, on the
industrial scale, the renewable energy development programme, particularly solar energy, which must be
continued and supported by a
contribution from the State for its
duration.
• The formulation of an appropriate legislative and institutional framework which has to enable the
implementation of an introduction
programme in the foreseeable future of nuclear electricity and greater
use of the potentials in this respect.
• The extent of the national seawater desalination programme, in
partnership, aiming to secure the
country’s drinking water supply.
On this occasion, the achievement
of the objectives within the imposed
timeframes has been confirmed.
At the end of this evaluation meeting, the President of the Republic
stressed the importance of a policy
for the duration whose implementation must be continued with consistency in order to formalise the
country’s great potentials and guarantee the coverage of its strategic
and vital needs in the very long
term. The Head of Government
also recalled the imperative of completing in time all the projects presented in order to respond to the
needs of the population concerning
sensitive goods and services such as
electricity, gas and water.
President Bouteflika has instructed
the government to overcome the
potential constraints in the completion of the projects for the energy
and mines sector which are monitored with special attention.
Programmes and investments
of a strategic importance
It is on the key sector of the country’s economy
that everyone focused during the hearing of the
Minister of Energy and Mines, Mr Chakib Khelil.
This was an opportunity for the President of the
Republic to encourage a large development of a
sector bearing wealth, investments of a strategic
scope and consolidation of public finances. What
results from the hearing of the head of the sector is precisely the importance of the investments which are granted to it in the domain of
hydrocarbons, of course, and natural gas particularly, but also in a domain as vital and structuring as the electric energy sector. Electrification
throughout the country and public gas distribution. Responding particularly to the essential
needs of the population which thus benefits from
the State’s contribution and the financed ease
on which the public authorities currently base
their policy. The adoption of seawater desalination programmes which is entering the sector’s
management as a serious concern and is today
national public given.
The sector’s 2005-2009 programme displayed
in its publication already high ambitions. In 2006,
by virtue of the application of this programme,
the electrification rate alone reached 97%. For
the same period, the gas penetration rate reached 38%. 1/3 of the population benefits, at this
stage, from two essential sources of energy:
electricity and natural gas. The forecasts for
2009 plan to double this effort to make 2/3 of the
population benefit from natural gas and assure a
57% penetration rate. The sector also displays
its presence by supporting the large infrastructure works in the country, the east-west motorway,
the railway network, seawater desalination and
network adaptation. The package dedicated to
this is 133 billion dinars. The sector has also
invested in the renewable energies – investments which are part of the ‘99 national electrification programme. At this stage, 18 villages of
the Great South benefit from solar electrification.
There is the same project for 16 other villages of
the High Plateaus and the South. The percentage of renewable energies should be increased
to 5% by 2015. With regards the national gas
fuel programme, 22 billion dinars approximately
are dedicated to it, by 2025. The roadmap, such
as revealed from the evaluation which was carried out, reveals an increase in investments in
the domain of hydrocarbons particularly which
must contribute to the increase in production
and to a stronger, sustained presence on the
international markets. The analysis also reveals
great effort in terms of the electrification of all
regions of the country. We note an increasing
interest in the development of the renewable
energies of nuclear energy and in the seawater
desalination programmes. The Head of State
said he was resolutely attached to a policy for
the duration for the sector by overcoming the
potential constraints. Satisfying the essential
needs of the population is a leitmotiv in the
reports of the President of the Republic.
Energie & Mines
anuary 2008
BANKSand
AND FINANCE
Banks
finance
A new Tax Act being prepared
Legal experts call for
the “decriminalisation” of tax fraud
The general tax authority
is setting down to putting
in place a new General
Tax Act This is a long-winded work which will have
to include all the tax matters governed by more
than legislative texts
This is what was announced by Mr
Yacef Belkacem Aarab, deputy director
of tax audit at this institution on the
fringes of the study day held at the
Supreme Court on the theme of “Tax
fraud and contraband”. Whilst revealing “the contradictions and defects” of
these acts, particularly in terms of terminology, given that they are inspired
by the French act, the same official states that this is an important requirement which must ward off the phenomenon of fraud which has taken on
“alarming” proportions in these last
few years.
With regards the penalties imposed by
the legislation imposed on tax frauds,
Mr Yacef considers that the penalties
contained in the provisions of articles
303 and 304 of the Direct Tax Act are
not really “suited” to the current
context. “On the one hand, we are
going towards the market economy
and, on the other, we are adopting a
hardly strict system aimed at the economic agents and investors”, he said,
calling for the modulation and relaxation of the penalties, mentioning, as an
example, the fraudulent taxpayer who
is incarcerated if the amount of his
fraudulent
transaction
exceeds
3 million dinars.
The deed is considered to be a crime
and the penalty is more than 10 years
in prison. That said, this penitence is
not really suited to the nature of the
breach, feels Mr Yacef.
Furthermore, he specified that the
amount of the fiscal pressures is not
very important in Algeria. It is the
lowest in the Mediterranean Basin and
the current trend, he explains, aims to
Energie & Mines
0
anuary 2008
reduce it more in view of making taxpayers do their tax returns. All the
efforts put in, continues Mr Yacef, aim
to rehabilitate first of all the ordinary
taxation.
Mohamed, a professor at the DjilaliLiabès University of Sidi Bel Abbès.
This has deprived the Public Treasury
of huge financial revenue. Oil taxation
had dissimulated things.
Tax fraud has reached 1
billion centimes
Sellini proposes
new bank notes
Where is Algeria in terms of tax fraud?
The same official refuses to give the
press estimates, feeling that “extrapolations are dangerous” and that it is very
difficult to put its total rate into figures.
Hence, the importance of this tax stake
on the economic scene. Questioned on
the ways of fighting this made available
to this authority, Mr Yacef states that
the means of intervention exist, since
the tax officers have the right to communication, to investigation and to
visits. Are the latter well protected?
The deputy director of tax audit
confirms that “yes” both through the
specific status of the authority and
through the criminal code. In response
to the insistent questions of journalists,
Mr Kiri Rachid, deputy director
responsible for legal disputes at the
Guelma Tax Authority, states in terms
of numbers that the rate of tax fraud
recorded in 2006 on the national scale
is around 10 billion centimes.
Whilst revealing the difficulties of calculating this, the same official stated in
this context that the number of complaints for tax fraud filed in the course
of 2006 with the national courts were
around 1,084, 710 of which for tax
fraud, 235 for refusal of payment and
solvency organisation and 139 for
breach in terms of right of guarantee
and precious materials. Mr Kiri further
notes that, in 2007, this phenomenon
saw a 30% to 40% reduction. Another
legal expert, Mr Bourmad, puts forward, for his part, the number of
12,000 tax fraud matters dealt with
annually, according to him. It should
be specified that this tax fraud phenomenon only started to be dealt with
seriously in 1990, states Mr Boudali
Accosted on the fringes of this study
day, Mr Abdelmadjid Sellini, Chairman
of the Bar Association of Algiers, made
the most of the occasion to say that the
tax authority has too many prerogatives. In his eyes it “paralyses” the investors and the activity of the economic
companies.
In his opinion, the entire economic
machine of the country must be
brought through the banking institutions and avoid the payments by
“bags”, proposing, in this context,
completely changing the design of bank
notes in view of detecting “dirty”
money. He also added that taxes do not
have to be increased to encourage economic investment. On another aspect,
Mr Sellini feels that there is no specialisation in tax law and the absence of a
training school capable of training legal
experts, being able “to look after the
defence of citizens”.
“The public authorities seem uninterested in the corporation of lawyers and of
their training, whereas the President of
the Republic requested, affirmed and
demanded this during the March 2006
conference”, he seethes.
With regards the penalties decided
upon against tax frauds, Mr Sellini
feels that imprisonment has never settled things and tax stories are monetary
stories which may be managed otherwise. It should be noted that this meeting saw the presence of Mr Berradja,
Presiding Judge of the Supreme Court,
Mr Mohamed Bouderbala, DirectorGeneral of Tax, among others,
Moroccan, Tunisian, Egyptian and
French officials and legal experts.
Banks and finance
Mr Laksaci confirmed during a meeting with the Chairmen & CEO
of banks and financial institutions
“The Bank of Algeria is observing a concentration
of loans in favour of certain private groups”
The Governor of the Bank of Algeria, Mr Mohamed Laksaci
stated, in Algiers, a certain “concentration” of bank loans in
favour of private operators, even a situation of “non-performing loans” for some of these groups.
“There is a phenomenon of a concentration of loans for private groups and a situation of non-performing debts for
some of them”, he confirmed during a meeting with the
Chairman & CEO of banks and financial institutions dedicated to the financial and monetary situation of the first halfyear. Without going into details on this observation, the
Governor remarked that the banking industry is evaluated
from two angles: the quality of the portfolio of loans granted
and the rate of mobilisation of savings.
According to the figures he disclosed, bank loans granted
during the first half of 2007 were 53.5% allocated to the private sector (compared to 52.9% at the end of 2006) for an
amount of 1,125.6 billion dinars.
As for the structure of loans in terms of timeframes, he
emphasised that medium and long term loans have increased, reaching 51.1% of all loans, at the end of June 2007,
compared to 49.6% at the end of 2006.
The other component covered by Mr Laksaci during this
meeting is the foreign exchange policy for which he confirmed that Algeria observed real foreign exchange rate stability which gives better macroeconomic anchorage and provides a better guarantee for investors.
“The Bank of Algeria is continuing its managed floating policy to assure the real exchange rate stability of the dinar”, he
said. For him, a stable real exchange rate is one of the elements of competitiveness in Algeria, particularly in a phase
in which its economy is increasingly opening up. In this
sense, he indicated that the IMF has confirmed, in a study it
carried out recently on the exchange rate policy in emerging
countries, that the real exchange rate of the dinar “is balanced and (that) the Algerian currency has not been undervalued”. Talking about inflation, the Governor emphasised
that the year 2007 is marked by an upwards inflationist trend
and that the inflation difference “is relatively extended” between Algeria and its partners.
Mr Laksaci further indicated that the Revenue Regulation
Fund (FRR) increased by 325.3 billion dinars in the first half
of 2007 compared to an increase of 503 billion dinars in the
second half of 2006, “which means a reduction in oil revenue”, according to him.
The liquid assets of the Revenue Regulation Fund are currently more than 3,000 billion dinars, it was reminded.
The Governor also emphasised that the large reduction in
foreign debt and the continuation of the sustained accumulation of foreign exchange reserves are proof of the “solidity
of the foreign financial situation”.
The outstanding foreign debt, which was 4.7 billion dollars
at the end of June, represents 5.08% of the foreign exchange reserves compared to 6.5% at the end of June 2006, he
specified. He also indicated that the net foreign assets of the
Bank of Algeria increased by 16.4% at the end of June 2007,
amounting to 6,419 billion dinars compared to 5,515 billion
dinars at the end of 2006. Furthermore, the first half of 2007
was marked by an increase in revenue from investments
abroad by the Bank of Algeria and a reduction in transfers of
Sonatrach associates, according to Mr Laksaci.
As for Public Treasury deposits with the Bank of Algeria,
these reached an amount of 3,597.95 billion dinars at the
end of June 2007. He also announced that Algeria’s foreign
exchange reserves reached 90.96 billion dollars at the end of
June 2007 compared to 77.78 billion dollars at the end of
December 2006.
On the decision of the ead of Government
Removal of the prohibition on public companies
depositing money in private banks
The measure prohibiting public companies and other state-owned institutions
from depositing their funds with private
banks has just been cancelled upon the
decision of the Head of Government,
Mr Abdelaziz Belkhadem.
The information, which has been the subject of comments, is therefore confirmed.
The authorisation now given to public
companies to deposit their assets with
national or foreign private banks will not
fail to be welcomed favourably by the private banks, of which there are many
today continuing to work in Algeria in
spite of the new draconian control measures recently decreed which have for-
ced some establishments to close. The
prohibition measure, which dates back to
August 2004, came further to the damage caused by the Khalifa affair where the
bank belonging to the businessman was
involved. Whilst the measure could be
understood as a preventative measure in
the context of the affair, the fact remains
that its prolonged enforcement appears
to contradict the rules of the market economy and did not fail to arouse reactions
from private bankers who feel penalised
by a measure which establishes discrimination. The removal of the prohibition
comes about at a time when the operation to open up the capital of Crédit popu-
laire d’Algérie (CPA) is in the process of
being finalised at a time when the privatisation of another public bank, the BDL, of
up to 30%, is announced. For these two
public banks, for which there is no lack of
foreign applicants wanting to become
shareholders, the decision will bear on
an international-scale bank.
The decision to authorise public companies to become clients of private banks is
likely to strengthen investors’ trust, whilst
contributing to revealing Algeria as a
country that respects the rules of the
market economy at the time of its membership to the WTO.
Energie & Mines
anuary 2008
BANKSand
AND FINANCE
Banks
finance
Banks wish to anticipate the new household indebtedness
A credit information centre
will be set up
oans have expanded from 1 2
billion dinars in 2 2 to 1
1 billion
dinars in 2
stated the SG of the Association of Banks and Financial
Institutions Abef at the El oudjahid Forum But it is the expansion in
loans which interests us with competition of
points
Mr Benkhalfa, who assured that the
banks have in their objectives “the
industrialisation of loans” (providing
them on a large scale), revealed that
banks are in the process of working on
a “toolbox to manage the risks” and
then on evaluating them properly. This
is a subject which worries the banks
since the Abef has asked the Bank of
Algeria to set up a credit information
centre “quickly” for households, like
the one which exists for companies and
which can anticipate the indebtedness
level, as well as the putting in place of
an interest rate observatory to decree
the central rate.
With regards property, it should be said
that this type of loan, even it has undergone a 2-digit increase in the last five
years with 10 banks on the market, the
activity “is still below the available
money stocks”, remarked the experts.
Its slowness is not unrelated to “the lack
of property bases and property deeds to
make use of the mortgage” which are
essential to long term, 20 to 30 year
loans, retorted the Abef delegate.
In all cases, consumer credits reached
63 billion dinars and the Ansej, Cnac
and Angem projects swallowed up 135
billion dinars for 95,000 financing
applications.
The secretary of the Association of
Banks and Financial Institutions further stated, with regards the bank
modernisation plan, that the year
2008-2008 will be “the era of the
amplification of electronic transactions”, the main concern of the banking
community. Furthermore, it is not by
chance that the officials have been in a
conclave, including those responsible
for the networks “in order to develop
Energie & Mines
2
anuary 2008
the roll-out plan in the last quarter of
this year”, explains Mr Benkhalfa who
gave a situation report on the banking
activity in Algeria. Before long “traders
will follow us in this impetus, said the
latter; we are certain of achieving interesting results and reproducing in 16 to
24 months’ time the experience of the
boom in mobile telephony”. This discreet appeal is significant as it has to be
recognised that cards are not designed
only for money withdrawals but also
for payments.
And the post office, which has distributed 3 million cards to its clients, is
experiencing “difficulties in interesting
traders in setting up payment terminals”, stated one of its officials. This
may therefore be useful to take into
account in the “electronic payment
development strategy considered by the
banks. To this end, the Abef wishes to
see the public authorities “grant tax
treatment with a lowering of taxes or
others TPA (corporate tax), IRG (income tax)” for traders who are involved
in this region.
For the Abef, the Algerian banks are
evolving through several parameters:
management, credit, solidity and financial security.
Today there are 6 public banks, 14 private banks and bank branches in more
than 4 specialised financial institutions.
In terms of diversity, we have 11 nationalities for capital contributions. With
1,316 branches, postal network not
included, and the creation of 75 bran-
Banks and finance
ches a year, “the bank coverage is still
limited since Algeria has one bank point
for every 28,000 inhabitants”, notes Mr
Benkhalfa. Algeria has set itself the
objective of 12,000 to 15,000 minimum.
And, moreover, this does not even enable us to be in line with modest countries such as Lebanon (8,000), Egypt
or Morocco. In the next two years, in
his opinion, we need to count on the
overhaul of the branch which will have
a new status and the renovation of the
information system which enables
reporting, i.e. having an overnight centralisation of the accounts.
TO BE RE E BERED
■ With the European Union’s assistance,
we will soon have a rating system that can
rate companies, making their relations with
the credit organisations easier.
■ Electronic clearing has enabled the processing of 7 million transactions, i.e.
250,000 to 450,000 a month, or even 400
billion dinars, which is a “good result”, one
and a half years after its set up, feels the
Abef.
■ Banks have quintupled their equity and
the level of unpaid debts has lowered
significantly compared to 1996/97 thanks
to “a provisioning policy of resources
deducted from the profits”.
■ Banks are achieving a return on loans of
2.5% and on equity of 41%, a rate that
“has not been done often elsewhere”, said
Mr Benkhalfa, which explains, he adds,
“the interest of foreign financial institutions
coming to our country”.
The banking activity is subject to controls
by organisations such as the Banking
Commission, the Court of Accounts, the
IGF, but the Abef, in view of respecting
ethics, is considering “putting in place a
peer review and control system”, based on
the Nepad mechanism.
■
The system to fight money laundering is
in place in banks, which is dissuasive. In
any event, “Algeria has never been blacklisted by the GAF”, declared Mr
Benkhalfa who recognises that the banks
have made several declarations of suspicions. For him there is not doubt that
“Algeria enjoys transparency which exists
nowhere else”.
■
Faced with the problem of taxes
and the black market
“5,000 shops closed in 2007”,
according to the UGCAA
Trade is going badly. Not only is it not
controlled enough, but other endogenous factors are related to it and have
dealt it the death blow. Faced with
high taxes, some 5,000 traders, working in the agro-food and clothing
industries have taken themselves off
the Trade & Companies Register this
year and intend to reconvert into the
black market to protect themselves
from taxes. Almost 600 service station
owners, having not been able to settle
their administrative situation, and
1,000 jewellers have also put the keys
under the doormat.
After giving the best of themselves for
may years, they have found themselves with their backs to the wall, begging the high authorities to stop this
bleeding. This is what was revealed by
the head of communications of the
General Union of Algerian Trades and
Craftsmen (UGCAA), Mr Tahar
Boulenouar, during a press conference held at the union’s national headquarters. Evaluating trading in the
month of Ramadan, the speaker
revealed that it was characterised by
the fluctuation in the prices of large
consumer products, but also, and
above all, a general anarchy, materialised by the importing of poor quality
products, particularly potatoes.
Enormous effort has been put in for
the organisation of the market, but
this has not enabled order to be restored and allow, as a domino-effect, the
legal traders to peacefully perform
their trading activities. The black market is gaining ground and 60% of traders work illegally.
This is not without unfortunate
consequences on the national economy, especially given that this situation
barely enables fair competition.
“The black market is the first obstacle
faced by investors in our country. The
time has come to put a stop to illegal
activity in view of a better organisation
of the market”, he said, emphasising
that, as it is, “trading only benefits a
restricted circle of illegal traders who
benefit from the anarchy to feather
their nests on the back of other
people”.
Given the extent that the black market
has grown in Algeria, the same speaker felt that the government’s intervention to stamp out this galloping
phenomenon is essential, along with
the support of the Ministries of the
Interior and Local Governments, of
Trade and Agriculture.
The UGCAA head of communications
further revealed that the importing of
milk and cereals will cost Algeria the
tidy sum of 1.5 billion dollars, whereas for cereals, more than 4 billion
dollars is expected. On the subject of
the 300,000 dairy cows which Algeria
intends to import before the end of
this year, Tahar Boulenouar said that
it would have been more sensible to
import more of them – he proposed
400,000 – to assure self-sufficiency in
terms of milk and by-products.
In the perspective of drawing up a
trade policy, the UGCAA is making its
proposals. This means reducing taxes,
stopping chaotic imports, putting an
end to counterfeit products which are
sold in Algeria, stopping the milk and
flour subsidy, upgrading all business
sectors and not only the companies, in
order to implement a policy that is
capable of assuring, once and for all,
that our country is self-sufficient in
terms of food.
Energie & Mines
anuary 2008
BANKSand
AND FINANCE
Banks
finance
Signature of a cooperation agreement
between BEA and the SBC Group
Banque extérieure d’Algérie (BEA) and the investment banking
and financing group (HSBC) have signed a master cooperation
agreement in Algiers.
The agreement, signed by the Chairman & CEO of BEA, Mr
Mohamed Loukal, and the Chairman of the HSBC (Hong Kong
Shanghai Banking Corporation) Group, Mr Philippe Pontet, plans
to put in place financial support and advice mechanisms designed to respond to the expectations and requirements of large
international groups. The purpose of this agreement is to pool
resources in order to assure financial advice and debt arrangement activities within the framework of financing schedules specific to financing large projects.
The projects targeted as a priority, within the framework of this
financial cooperation, are the large projects developed by
Sonatrach with strategic international partners both in Algeria and
abroad. It also covers other industrial sectors such as electricity
generation, seawater desalination plants and transportation
infrastructures, developed upon the initiative of the public and private clients of the two signatory establishments.
“Both banks will intervene as financial co-advisor in Sonatrach’s
projects and in agreements concluded between the Algerian
companies and their strategic foreign partners”, emphasises the
Chairman and CEO of BEA in a statement to the press.
According to Mr Loukal, the changes in the national economy as
well as the programming of large projects make it “necessary for
BEA to respond to the expectations and solicitations of the large
operators, by initiating more or less sophisticated fund raising
techniques such as the Financing Project and for which it has
become necessary to make use of the know-how of large specialists in the world such as HSBC which has accepted to instil
this in our executives through adapted training”.
Mr Pontet, for his part, specified that the HSBC Group intends to
set up in Algeria in a new banking sector which should “complete the existing financial system which the country needs to develop and not compete with the Algerian banks” in already existing
activities, he added.
The “strategic” partnership agreement signed with BEA “is part of
this framework and concerns, in particular, the contribution which
HSBC must make to the Algerian financial market in terms of
expertise in the financing of large projects”, he said.
“We will give BEA the expertise of the world’s number one in the
financing of large projects”, added Mr Pontet, promising to put
“the financial power” of the bank “to the service of the Algerian
economy”.
“Algeria has a central role to play in the Euro-Mediterranean keyzone”, with regards its human and financial resources and its new
ambitions, revealed the head of the HSBC Group.
HSBC, one of the leading banking and financial groups in the
world, which has close to 10,000 offices in 89 countries, recorded, in 2006, earnings of more than 22 billion dollars.
th
The BEA ranked 7 African bank by Jeune Afrique
The Banque extérieure d’Algérie (BEA) is
ranked in 7th place in Africa, according to
the ranking drawn up by the review Jeune
Afrique on the top 200 African banks.
The BEA won this place thanks to a balance sheet of 21.63 billion dollars, specifies
the review in its special issue for the year
2007.
The Algerian bank, which has thus gained
a place compared to the 2006 ranking, is
outranked by five South African banks and
the Egyptian bank, National Bank of
Egypt.
The first place in this top 200 is held by the
South African Standard Bank Investment
with a total balance sheet estimated at
139.26 billion dollars, followed, a long way
off, by its co-citizens Amalgamated Banks
of South Africa (71.15 billion) and First
Rand Banking Group (63.58 billion),
according to the data of Jeune Afrique.
In general, Jeune Afrique estimates that
the 200 African banks “are holding up
well” with a total balance sheet up by 15%,
in 2006, compared to the previous year
and occupy 24th place in the ranking of
the top 30 world banks dominated by the
Swiss UBS.
For the top 50 African banks in terms of
net earnings, BEA occupies 9th place with
an evolution of 90.14 million dollars, in
2006, noted the same source.
Mrs Fatiha Mentouri, Minister of Financial Reform
“No consequences of the “subprime”
crisis on the reserves”
The American mortgages at risk crisis (“subprime”) “has not
had negative repercussions on the investments of Bank of Algeria
in the United States, or on the foreign exchange reserves”, stated the Minister of Financial Reform, Mrs Fatiha Mentouri.
The Minister was questioned during a press conference on the
effect of this “subprime” crisis on Algeria's foreign exchange
reserves, part of which is invested in American treasuries.
“Bank of Algeria manages its foreign exchange reserves with all
the prudence possible which dictates to it the need to make safe
financial investments” abroad by diversifying them in the form of
long term financial securities and deposits, said Mrs Fatiha
Mentouri. Most of Algeria’s foreign revenues come from oil,
whose account currency is the dollar, but Bank of Algeria diver-
Energie & Mines
anuary 2008
sifies them immediately by converting them into various other
currencies such as the Japanese Yen and the British Pound.
According to the Governor of the Bank of Algeria, Mr Mohamed
Laksaci, 70% of Algeria’s foreign exchange reserves are invested
in the medium and long term in the form of securities with other
States, mostly in the United States.
These investments guarantee greater liquidity and low risks on
these deposits, he stated.
30% of the remaining reserves are invested in bank investments
abroad, according to the governor.
Algeria’s foreign exchange reserves were estimated, at the end of
June 2007, at almost 91 billion dollars.
Banks and finance
Hearing of the members of the government
President Bouteflika devotes a
session to the finance sector
■ The reform of the public finance system for greater efficiency of the
use of public resources and a better translation in the field of the sectoral public policies The reform of the banking and finance system in
support and in favour of the economy and the company
The President of the Republic Abdela i Bouteflika has devoted
within the framework of the continuation of hearings of the members of
the government a session to the finance sector ence within the framework of its missions the finance sector has opened two large works:
■
• The reform of the public finance system for greater efficiency of the use of public
resources and a better translation in the field of the sectoral public policies.
• The reform of the banking and finance system in support and in favour of the
economy and the company.
The reform of the public
finance system
Budgetary reform, public expenditure
and control
Major modernisation actions have been
initiated or in the process of being. In
budgetary matters, the reform related
to the modernisation of the budgetary
systems (MSB) has been adopted by
the government: It targets:
• a multi-year income and expenditure
management approach which relies on
a budgetisation per programme;
• accountability of the managers
through an evaluation and audit of the
performance and results;
• an improvement of the content and
the presentation of the State’s budget
for better transparency of the decision
and of the budgetary management.
The experiment conducted with five
Ministries has revealed the constraints
which have affected the reform’s
appropriation process, which has led to
an extension of the period of its adoption. However, short term measures are
planned to introduce more rigour in the
cost management of equipment programmes as well as the forecasting and
planning of budgets. In terms of execution of public expenditure, the reform
actions undertaken in this domain aim
to improve and simplify the execution
circuit of public expenditure. They
concern the adoption of the State’s
accounting plan and the modernisation
and reinforcement of the means
(human resources, infrastructures,
equipment, etc.). Auditing public
☞
Energie & Mines
anuary 2008
BANKSand
AND FINANCE
Banks
finance
☞ expenditure: measures initiated by the
government to reinforce the internal
and external audit of public expenditure particularly relate to:
• the improvement of the audit and
control methods through the putting in
place of an internal committee coordinated by the General Inspectorate of
Finance (IGF).
• The amendments to the public
contract regulations in the process of
being adopted.
• The preparation of the bills related to
the Finance Act and to the public
accountancy and the budgetary regulations.
• The reinforcement of the missions
and means of intervention of the
General Inspectorate of Finance.
• The drawing up of the specific articles of association of the audit and
inspection bodies.
Modernisation of the tax authority
A plan to modernise the tax authority to
provide it with an organisation and
procedures inspired by best international practices and more suitable service
resources has been initiated. This relates to:
• The simplification of the taxation system through the establishment of a
unique tax file and the unique lump
sum tax.
• The new organisation of the tax
management by “clientele” which has
required the creation of three new
structures, namely:
– the General Directorate of
Corporates (DGE) as the sole tax
representative of 860 companies, the
Tax Centre (CDI) and the Local Tax
Centre (CPI).
• The creation of a tax documentation
and information division responsible
for researching tax information and
building up a database.
• New missions are planned in terms of
fighting crime and corruption and protecting heritage.
• New procedures for dealing with
contentious matters aiming to improve
tax authority/taxpayer relations.
Reform and modernisation of the customs authority
The actions undertaken relate to:
• The organisation of the departments
through the reorganisation of the central authority, the redeployment of
Energie & Mines
anuary 2008
external services and the creation of an
Ecole supérieure des douanes,
• The fight against contraband and the
illegal trafficking of drugs: the actions
planned concern the authorisation
given to the customs authority to sell
the goods seized and the putting in
place of pilot supervision customs posts
on the east and west borders.
• The development of internal and
external frameworks and tools.
• The reinforcement of the resources
through the training of the human
resources and the development of
infrastructures and material resources.
Within the framework of the development programme, it is planned, for the
year 2008, to start priority actions
concerning, in particular, the adaptation of the Customs Act, the reinforcement of the fight against fraud and illegal trafficking, the intensive recruitment of human resources (1,500 customs officers a year), the development
of continuous training and the reinforcement of internal audit at all levels of
the hierarchy.
Fight against money laundering
The financial information processing
unit, which has undertaken a series of
actions aiming to support its organisation and its operating mode, has been
the recipient of 56 statements of suspicion coming mainly from banking institutions and a dozen requests for assistance coming from foreign counterpart
organisations.
Reforms and actions undertaken by the
national heritage authority
The programme decreed aims, in its
purpose, to give back to the domaniality and the land registry their eminently
economic role whilst ensuring the preservation and protection of the national
heritage. In this respect, the following
is particularly planned:
• The revision of the legislation and of
the regulations in view of assuring better promotion and protection of the
public domain and private domain of
the State.
• The putting in place of a specific
mechanism fixing new terms and
conditions for transferring and selling
land designed for the realisation of
investments.
• The establishment of a procedure
striving to ascertain the right of
ownership in view of the obtainment of
the title deed.
• Boosting of the general land registry
operations through the realisation, by
the National Land Registry Agency, of
works using subcontracting by national
estate experts and international cooperation, particularly in terms of training
specialised personnel and the carrying
out of land registration operations by
satellite.
• The cleaning up of the land and property of the public economic sector,
particularly the land of local public
companies (EPL), public economic
companies (EPE), whether dissolved or
privatised or likely to be.
• The pursuit of the property sale operation. This will mean quickly dealing
with the purchase applications made by
the regular occupants of the properties
belonging to the State and to the
OPGI, i.e. an amount of 600,000 units.
• Support to the investment decisions
by making available land at prices
encouraging the act of investing.
Financing of the economy
cleaning up of the economic
companies and debt
processing
Financing the economy
The domestic financing of the Algerian
economy is done through public expenditure which, today, devotes 10,444
billion dinars (all programmes combined) of loans to the economy for 1,987
billion dinars, of own financing of the
economic agents taken from a bank
savings account of 3,489 billion dinars
and a financing by the financial
(bonds) market of 170 billion dinars.
The dependency on the oil revenues
makes this financing very vulnerable,
particularly the budgetary finances
where the recurring and fixed expenses
required for the operating of the State
are almost two times the budgetary
revenues excluding hydrocarbons.
Furthermore, the employment of young
people has also benefited from financing from public banks for an amount
of 123.5 billion dinars. Consumer credit is experiencing a certain development, particularly the vehicle loan
financed by 65.2 billion dinars.
Banks and finance
The financial market
In 2006, the Treasury raised the primary market by a gross amount of 255.5
billion dinars which concerns the entire
range of securities (Treasury notes at
13 weeks as far as notes similar to
Treasury notes at 15 years). After
deducting repayments, the net outstanding of the Treasury notes issued by
awards amounted, as at 31 December
2006, to 281.8 billion dinars.
On the secondary market of State securities, the liquidity of Treasury notes
has been assured by the specialists in
Treasury securities (SVT). The latter
have compromised on a total amount of
211.6 billion dinars, 15.2 billion dinars
of which in favour of their private
clients, which demonstrates a relatively
significant intermediary level.
Insurance activity
With regards activity, the production of
insurance companies was demonstrated, at the end of 2006, by an evolution
rate estimated at 12% compared to
2005. The amount of premiums issued,
in 2006, was around 46.4 billion dinars
compared to 41.6 billion dinars in
2005. The activity remains focused on
two branches (automobile and industry
risk).
The financial cleaning up of the public
economic companies
The financial cleaning up of the public
economic companies must have as its
main objective the recovery of the
goods of activities of the public companies. Priority will be given to the viable
companies, with market outlooks, on
the basis of an in-depth analysis on a
case by case basis.
On the basis of criteria and conditions
determined in advance, 407 companies, out of a total of 1,002 companies,
have been considered eligible for financial cleaning up; the resources required
for this cleaning up are evaluated at
306.8 billion dinars.
In consideration of their financial cleaning up, the public companies commit
with the State, within the framework of
a multi-year contract, to the execution
of a recovery plan to achieve quantified
economic and financial results.
Public debt
The outstanding internal public debt at
the end of 2006 amounted to 1,779.7
billion dinars, representing 21.3% of
GDP. This ratio was 32.6% in 1999.
With regards foreign public debt which
amounted to 878 million dollars at the
end of 2006, actions have been undertaken in the sense of converting a part
of this (333.3 million dollars) and the
repayment of another part (100 million
dollars).
The remainder of the foreign public
debt (public and private companies),
established at 4.18 billion dollars, will
be treated by the conversion into bank
loans and/or by early repayment.
Training and upgrading actions
for human resources
With regards the administration of the
Ministry of Finance:
A shortage in terms of qualified resources has been clearly established. The
actions to overcome this target, on the
one hand, the reinforcement of the
workforce of the Ministry through targeted recruitment programmes and, on
the other hand, raising the level and
quality of the existing human resources
by putting in place a continuous training mechanism. The annual training
plan 2007 plans 135,000 training days
in favour of 22,000 civil servants with
the objective of training them in new
skills.
To
do
this,
a
budget
of
DZD414,750,000 has been mobilised.
The execution of these training programmes is, mainly, entrusted to the
sector’s training establishments. The
integrated human resources management sector of the central authority is
in the process of being put in place, and
its basic modules are operational and
particularly aim to automate all management actions of the personnel and
the remuneration and to have human
resources management charts.
A study on the problem of the relief of
the supervisory personnel within the
Ministry of Finance’s structures has
been launched. This study aims, in the
future, to give the structures of the
Ministry of Finance instruments for
evaluating and planning supervisory
personnel requirements and for planning the relief.
• Concerning the banking and finance
sector:
The bank training system relies on the
inter-bank establishments and the training centres internal to the banking
establishments. The training catalogues
now cover a very wide series of services
and deal with almost all the needs
expressed by the banks. The work on
developing the programmes, the
contents of the programmes and
improving the professional and specialised upgrading catalogues, initiated
more than 5 years ago, has been supported by the putting in place of partnerships and cooperation with several
countries.
The human resources management and
training structures must increasingly
deal with the new requirements related
to the new businesses and to the business redeployment of the banks. These
new perspectives will entail a reconfiguration of the strategy in terms of
bank training and a redeployment of
the structures consequently.
The overhaul of planning
in the conduct of our development
Experiences have shown that the economic and social developments which
have succeeded are those which are
part of medium and long term visions.
The response to this necessity requires
the overhaul of planning, not in its historic design, but in the context of an
open economy and society. It is in this
perspective that the General Planning
and Prospective Commission (CGPP)
has been created under the aegis of the
Ministry of Finance, on the directives
of the President of the Republic.
Three main missions have been fixed:
• The drawing up of a long term economic and social development vision.
• The drawing up of the next medium
term development plan (2009-2013 or
2010-2014).
• The reinforcement of the national
statistical information system and the
improvement of the volume and of the
quality of its production with, as a priority, supervision of the smooth running
of the general population and housing
census of 2008.
☞
Energie & Mines
anuary 2008
BANKSand
AND FINANCE
Banks
finance
☞ The financial reform
The financial reform is designed as an
all-encompassing policy aiming to
increase the efficiency, the security and
the quality of the financial services in
favour of the actual sphere without
constraints for the public finances.
The reform actions have targeted both
the banking and finance sector and the
insurance sector.
Banking sector
Four types of objectives have been assigned to the reform of the banking sector: the reinforcement of the stability
and profitability; the reinforcement of
bank intermediation and the reduction
of its cost; the quick modernisation of
the information and payment systems
to improve the quality of the banking
services; and the substantial development of property lending.
To this end, it has included the application of new internal regulations of the
boards of directors, the signature of
performance contracts with the managers, the signature of agreements between the shareholder and each director
dedicated to specific missions and the
reinforcement of the internal audit
tools by the setting up of audit committees. The capital opening process of
Crédit populaire d’Algérie (CPA) is
reaching its final phases after completing the “data room” phase. The next
phase will be the receipt of the contract
amendment requests from the banks,
followed by the submission of the technical and financial tenders of the tendering banks.
In the light of the CPA experience, the
minority opening of the capital of
Banque de développement local (BDL)
shall be carried out with management
transfer.
The refocusing of the activity of Caisse
nationale d’épargne et de prévoyance
(Cnep) and of Banque de l’agriculture
et du développement rural (Badr) on
their core businesses will also be implemented. It is within this framework that
Cnep-Immobilier has been sold by
Cnep to public insurance companies.
You should note the development dynamic of the private banks, particularly
those backed by large international
groups. The number of private bank
branches increased from 47, in 2003,
to 120, in June 2007.
Energie & Mines
8
anuary 2008
With regards the second objective, the
reinforcement of intermediation and
the reduction of its cost, the main
achievements recorded target the reinforcement of the general credibility
conditions of the activity of the companies through the implementation of the
provision of the Finance Act related to
the revaluation of the company’s assets,
to the market conditions, by putting in
place the legal framework for the
investment capital companies as well as
the legal and regulatory framework for
exercising the factoring activity.
Furthermore, and before the quick
development of consumer credit, an
inter-ministerial commission, chaired
by the Minister of Finance, has formulated the proposals to supervise and
secure this type of loan, which will be
submitted shortly for the examination
of the government.
The Minister of Finance has also been
entrusted with examining the young
person’s employment assistance and
microcredit provisions (Agence nationale pour le soutien à l’emploi des jeunes (Ansej), Caisse nationale de l’allocation chômage (Cnac), Agence nationale de gestion des microcrédits
(Angem)). An inter-sectoral committee
has been entrusted with evaluating the
different mechanisms by examining the
constraints and difficulties revealed in
their implementation.
The off-setting and the management of
the risks by the institution and the start
of operating of the Caisse de garantie
des crédits d’investissements (CGCI)
for small and medium-sized enterprises
(SME) are likely to reinforce this
objective. The CGCI, created and given
significant capital (30 billion dinars),
must see its activity kick-started before
the end of December 2007.
The compatibility of the terms of
resources and employment by the
mobilisation by the banks of long-term
resources to finance long-term employment also favour the reinforcement of
the bank loan market.
The quick modernisation of the information and payment systems to improve the quality of the banking services is
pursued in the continuity of the project
to modernise the bulk payment processing infrastructures within the framework of which the banks’ information
systems’ migration works continue to
be carried out.
After this upgrading focused on the
achievement of the technical prerequisites to remote clearing, the modernisation of the information systems is designed as a means of better risk management and of the business redeployment
of banks by improving the performances of the banking intermediary.
The fourth objective has been achieved
by a series of measures aiming to
encourage the development of property
lending. This concerns the law on
mortgage securitisation, the establishment of the legal mortgage in favour of
banks and a programme comprised of
roadmaps detailed by entity, including
the actions to be carried out and the
assistance needs in the domains specific to each of them in view of developing property lending.
Hence, in order to stimulate this market further, several actions have been
undertaken including, in particular, the
provision of technical assistance by the
World Bank (2003-January 2007)
which aims to improve the mortgage
market environment through:
• the creation of a training programme
in favour of all parties;
• the putting in place of a mortgage
securitisation mechanism;
• the creation of the legal and fiscal
conditions required for improving the
loan environment through different
provisions of Finance Acts;
• the definition of the action plans by
entity participating in the development
of mortgages.
In mortgage financing and property
financing in general, the Cnep-Banque
is in first position.
At the end of 2006, the outstanding
amount of its client resources was 573
billion dinars and that of its commitments (loans granted) 240 billion
dinars. A review has been undertaken
at the Ministry of Finance and Cnep to
separate the financing activities for
savers from the financing of housing
and property in general. All these
actions strive to favour a substantial
development of property lending.
The financial market
The reinforcement of the financial market in view of a more intense mobilisa-
Banks and finance
tion of the internal resources for the
development of investments has been
pursued by:
• an intensification of issues on the
bond market in 2006;
• a continued development of the
State’s securities’ market which constitutes, for the maturities of 3 months to
10 years, reference securities;
• the start of operating of the central
securities’ depositary bank “Algeria
Clearing” which has enabled a modern
institution to be incorporated in the
financial system for the management
and administration of dematerialised
securities, according to the universal
security standards.
In view of nurturing the secondary
market, the Minister of Finance is preparing the acceptance into the Stock
Exchange of Treasury-type bonds
(OTA) of 7, 10 and 15 years by the
latest at the end of 2007 and intends to
encourage the public economic companies’ (EPE) privatisation operations by
the Stock Exchange, once the Ministry
of Industry has decreed a list of EPEs
that can be privatised within this framework.
These measures concern the insurance
policy, the exercise of the activity and
the means of distributing the insurance
products.
The financial security of the insurance
companies is dealt with by the regulation of the banking stakes in the capital
of insurance companies and the latter
in the capital of banks, the requirement
for the minimum capital to be totally
paid up as of the incorporation of the
insurance company.
The definition of the powers of control
in terms of a change in share-ownership and evaluating the assets of the
company of guarantee fund responsible
for supporting, in case of insolvency of
an insurance company, all or part of
the debt.
Outlooks for the insurance market
These outlooks are based around several axes and will be achieved by encouraging the setting up of new operators,
developing the personal insurance market’s segment, and recapitalising public
insurance companies.
The new financial activities
Insurance sector
The objective to reinforce the stability
and the profitability of the sector was
continued in 2005 by the modifications
made to the order related to insurance
companies, by the implementation of
the new regulations of the board of
directors and by the conclusion of performance contracts and agreements
specialising the boards with regards the
public insurance companies.
The insurance companies have been
marked, in 2007, by the continuation
of the implementation of the new
Insurance Act promulgated in 2006.
Hence, the insurance supervision commission is being set up and a series of
applicable texts have been signed or are
the process of being signed.
This new act includes the following
reform focuses: the boosting of the
activity, the financial security of the
companies and the reorganisation of
the supervision. The boosting of the
activity is sought after by measures
supporting the development of personal insurance.
controlling costs and greater rigour in
the forecasting and planning of budgets.
• The banking restructuring and the
development of branch networks to
assure sufficient bankarisation of the
economy and a level of services that is
in line with the requirements and expectations of the citizens, in general, and of
the economic operators, in particular,
must be included as priorities of the
sector which must, to this end, mobilise
the resources necessary to achieve this
objective as soon as possible.
• The extent of the public and equipment expenditure programmes requires
an adaptation of the administration of
finances and its methods of intervention (forecasting, estimating, audit and
evaluation) to assure judicious allocation of the resources and better efficiency of public expenditure.
• The financing of the employment
assistance and company creation
mechanisms must be given the seal of
transparency and focused on the categories for which they are designed on
the basis of pre-established criteria.
• The law on savings and loans cooperatives has been promulgated thus enabling the extension of the loans and
deposits and mutuals’ activity, thus
supporting the microfinance mechanism.
• The factoring activity included in the
reform programme requires the definition of a specific legal framework
whose draft texts are finalised, particularly those of the Bank of Algeria.
• The development of leasing which is
achieving a financing volume of 13
billion dinars and which will be encouraged by new tax incentives proposed
in the Finance Bill for 2008.
As a conclusion to the evaluation of the
sector, President Bouteflika focused on
the following points:
• There is a need to accelerate the
modernisation of the budgetary system
to improve the drawing up and the
monitoring of public expenditure, particularly with regards the equipment
expenses which impose upon the financial authority greater vigilance in
Energie & Mines
anuary 2008
MINES
mines
1st International Conference on Mineral Resources
Chakib Khelil : “We export
more than we import”
■ Chakib Khelil indicated that Algerian mining exports are around
million dollars annually whereas Algeria imports
million dollars
of mining products
■ The 2
tonnes of uranium reserves are insufficient for sustainable mining according to the inister
■ The Nuclear Act is expected for next year announced
r Chakib
Khelil
“What is important for us is to have
placed Algeria on the world mining
map as an important player in this
domain, and this is one of the main
objectives of this conference”, stated, in
substance, the Minister of Energy and
Mines at the time of the opening of the
st
works of the 1
International
Conference on Mineral Resources
(CIRMA 1).
Mr Khelil, who highlighted in this
context the number of foreign investments drawn in over the last few years,
which are around 30, emphasised that
these partnerships have led to a volume
of 270 million dollars of investments. It
should be said that, as specified by the
Minister, this sector had been in deficit
for a certain number of years: “before
2000, there were no investments”.
These investments were absent after
the State had invested more than
1 billion dollars in 30 year, “without
picking up any profit”, he said.
However, specified Mr Khelil, Algeria
was once again on the world mining
map, since the year 2000, the date of
the promulgation of the new Act and
investors have returned: “this reform
was very important because it removed
the monopoly of the State which
was the majority shareholder in all
deposits”.
Another factor which has enabled the
arrival of foreign capital is the increased price of metals “which are three to
four times dearer. In the last few years,
the deposits have become very profitable”, in addition to the fact that, according to him, the transparency and the
Energie & Mines
0
anuary 2008
availability of information on the
Algerian mining heritage “are a major
asset”. Hence, several millions of dollars have been invested these last few
years thanks to the arrival of foreign
promoters for the promotion of several
minerals, such as gold, iron, zinc,
phosphate, etc.
Phosphate is, in fact, a very important
deposit for the future, according to the
Minister, since the forecasts state a
production of some 20 million tonnes a
year over the next decade, whereas they
did not exceed 700,000 tonnes in
2000. The same applies for uranium
whose proven reserves are also important (29,000 tonnes), but insufficient
for Mr Khelil who specified that these
would not be enough to cover the
needs of two 1,000-megawatt nuclear
power plants “beyond sixty years’
time”. French firms: contracts have
been won with the appeals for tenders.
In this respect, the Minister emphasised that the Nuclear Act will be amended in 2008, whilst stressing, to this
end, that our annual exports of mining
products, which are around 450 million
dollars, have exceeded our imports,
estimated at 400 million dollars a year.
Before the 2000s, these exports
were non-existent.
In the same context, Mr Khelil
recalled that the Nuclear Energy
Act should be promulgated in
2008. This text will enable the
nuclear sub-sector to be “well
organised” on the organisational
and technical component as well
as on the civil responsibility
component, he explained. With
regards gold production, the
Minister stated that the first
project on this matter, initiated
in 2001 with an Australian partner, should start production
next January with an annual
capacity of three tonnes.
Furthermore, Mr Khelil specified that the agreements to be
signed in the energy domain
between Algeria and France at
the time of the visit of the
French President, Nicholas
Sarkozy, to Algiers are those
won by French firms within the
framework of appeals for tenders such as the Total project
(Arzew vapour-cracking) and
the Alstom project (construction
of an electric power plant in
Terga).
Other than the conferences and
workshops around different
aspects dealing with the mining
activity in Algeria, an exhibition
of the participants was organised on the fringes of Cirma 1.
Likewise, this conference will be
the opportunity for the National
Mining
Heritage
Agency
(ANPM) to launch the second
contract awarding operation
related
to
19 mining sites located in the
Hoggar (9 sites), the north-east
(5), the north-west (4) and the
south-west (1) of Algeria.
Finally, this meeting, which is
likely to become a traditional
meeting for the coming years, is
also the opportunity to enable
the drawing up of quite specific
documentation on this specific
domain, particularly after an
exchange of ideas and experiences between promoters from
several countries.
Overview of the Algerian
mining potential
The 1st International Conference on
Mineral Resources (Cirma 1), which was
held in Algiers from 2 to 4 December last
year, is a real event for a greatly expanding
sector since the promulgation of the 2001
Mining Act.
■
Algeria’s assets in the mining sector, for
a long time neglected, are undeniable. They
are geological or mineral type assets with a
deposit potential still largely unexplored, but
also economic and institutional type assets
highlighted by the reforms introduced by the
2001 Act (which opens up the sector to national and foreign private investment) and the
putting in place of an institutional and regulatory framework that is deemed highly incentive.
■
■ Several partnerships have already been
concluded with world leaders in this sector
such as Mittal Steel, GMA, Orascom, HLIN
and WMZ.
Foreign direct investment in the domain
of mineral resources is evaluated, today, at
270 million dollars.
■
The granting of more than 800 mining
permits have enabled the State to draw in
more than 4 billion dinars in revenue.
■
The mining production, for a long time
stagnant, if not in regression for some materials, has experienced a spectacular progression in the last five years, i.e. 512% for
aggregates, +180% for kaolin, 72% for
phosphates and 42% for iron.
■
■ The production of gold and other precious
metals, present in quantity in the national
mining potential, is likely to progress. The current gold production is estimated at 400km a
year and we are counting on a future production of several tonnes annually.
■ The turnover made by the mining branch
amounted to 61 billion dinars in 2006.
isit to Algeria of the Bra ilian
Association of small and
medium si ed producers
of stones jewels and similar
products Abragem
Towards the creation
of a precious stones
transformation workshop
in Tamanrasset
A delegation from the Brazilian Association
of small and medium sized producers of
stones, jewels and similar products
(Abragem) made a visit to Algeria in view of
creating a workshop to transform and promote precious and semi-precious stones in
Tamanrasset. During their stay in
Tamanrasset, the members of the Brazilian
delegation became acquainted with the
place where the future workshops will be
established, with the nature of the rocks in
the region of Tamanrasset, with the local
crafts through the visits made to the local
craftsmen, and with the laboratory equipment of the ORGM. The specialists of the
Abragem association also led, in the presence of about forty local craftsmen, two
conferences-discussions on: the promotion
of stones, the working methods and equipment used, the appropriateness of grouping
the stone and mineral shaping trade into
associations and cooperatives. Upon their
return from Tamanrasset, the members of
the Brazilian delegation presented an initial
report on their visit and expressed, on this
occasion, their adhesion to the selection of
the city of Tamanrasset for the establishment of this project due to the existing
infrastructure, to the existence of the
ORGM laboratory, to the traditional knowhow of the local craftsmen in the manufacturing of jewellery which would easily have
added value with the introduction of the
shaped local stone. The Chairman of
Abragem committed to study the project.
With regards the trainers’ training mission,
the Chairman of Abragem recommended
that the training of the future trainers starts
in Brazil and is continued in Tamanrasset.
Further to a new appeal for tenders from the
Agence nationale du patrimoine minier ANP
2 mining permits awarded
for a total of 131 million dinars
Out of the 8 sites put up for production, 5 were awarded, whereas 22 sites out of the
48 put up for exploration were awarded during the 22nd session for awarding mining
permits which the Agence nationale du patrimoine minier (ANPM) has just organised.
The operation ended in total revenue of 131,436,000 dinars.
Limestone, marble, clay, sand and gypsum are the main substances concerned by the
operation.
The mining sites put up for tender are divided between the wilayas of El Bayadh,
Tissemsilt, Oran, Na ma, Adrar, Oum El Bouaghi, Tizi Ouzou, M’sila, Bordj Bou
Arréridj, Khenchela, Djelfa, Sidi Bel Abbès and Blida.
Energie & Mines
anuary 2008
MINES
mines
The Chairman & CEO of Enor has announced :
Appeals for tenders for diamond
exploration in Algeria
The Chairman
CEO of the Entreprise d exploitation des mines d or
Enor
r ustapha Ben erga indicated on the waves of radio Channel
II that appeals for tenders will be launched for the research and exploration of diamond deposits in Algeria
“In Mauritania, a foreign company has
discovered diamond deposits. There
are no reasons why we can’t find them
in Algeria”, stated the head of Enor for
whom the new indicators found in
some regions of the country accentuate
the probability of finding kimberlites of
diamonds.
“Technical-economic studies are required to be assured of the profitability of
these deposits” emphasised the radio’s
guest, without however mentioning the
planned date for the launch of these
appeals for tenders.
As a reminder, the Minister of Energy
and Mines, Mr Chakib Khelil, confirmed, in 2005, the existence of a potential diamond deposit in the region of
Reggane, more precisely in the location
which bears a very revealing name Bled
El Mass (diamond country).
“The name of this location gives us
information already, before even the
preliminary geological studies confirm
it, that there is a diamond deposit”,
indicated the Minister, who emphasised that other studies would need to be
carried out before envisaging its extraction. Furthermore, the speaker recalled
that Enor will, as of January 2008, start
the gold production of the Amesmassa
deposit (which hides huge reserves),
with the objective of achieving production of 3 tonnes a year. Enor’s
approach, according to its head, is guided by the prices of gold on the global
market: if the price is high, as is currently the case with 800 dollars an
ounce (31g), the company will mine
the low mineral deposits (at 4g per
tonne of earth), otherwise it will be the
rich mineral deposits which will be
mined.
Currently, the Tirek deposit, to the
north of Amesmassa, mined by Enor,
Energie & Mines
2
anuary 2008
the national producers to turn to
foreign companies to purify Algerian
gold. Enor has signed a processing
contract with a Swiss refiner.
Acknowledgements
produces between 400 and 500kg of
gold a year. Mentioning the new
Mining Act of 2001, the radio’s guest
felt that it has opened up the path to the
development of the sector, particularly
by opening up life to foreign expertise
in the domain of prospecting and
mining, with the assistance of renowned foreign companies.
“This act came in the nick of time, as
the world gold price is very high”, he
said, specifying that this text has pushed Algeria up to the rank of the most
important countries in terms of investment for the foreign companies.
Hence, the Chinese, Canadian, South
African and Australian are all companies which have obtained gold mining
permits, and also for other metals.
For the question of refining,
Mr Benzerga said that the complexity
of the operation, which requires high
technology equipment, and world recognition (stamping), have encouraged
Energie & Mines
anuary 2008
MINES
mines
Energie & Mines
anuary 2008
Energie & Mines
anuary 2008
MINES
mines
Energie & Mines
anuary 2008
Energie & Mines
anuary 2008
MINES
mines
Energie & Mines
8
anuary 2008
In a statement to the agency Reuters
“Algeria’s mining potential
demands to be known”
By
Mohamed-Tahar Bouarroudj ( )
Algeria s potentiality
big metals and minerals mining sector is
still n its infancy and
needs the involvement
of the industry s major
players to reach full
potential an official
Said
frica’s second biggest country, under-explored Algeria
offers investors majority
stakes n metals ventures, an
opportunity snapped up by Chinese
firms since the sector opened up to
foreign and private participation in
2001.
“We hope that the big investors came,”
Mohamed Tahar Bouarrouj, director
of mines at the Energy and Mines
Ministry told Reuters.
“Activity has clearly grown since the
new environment started, but we think
this has still not reached close to its
potential. We are at the start,” he said
in an interview.
“With foreign direct investment and
know-how we will boost exploration to
find new resources and improve our
knowledge of the subsurface,”
Bouarrouj Said.
Since 2001 the mining sector has worked hard to shake off its backwater
image, attracting foreign investment
pledges of $270 million in metals such
as gold, Iead and zinc, sealing 20 joint
venture agreements with overseas
interests, most of them
Chinese. The sector as a whale
employs 29,000 people.
“The Chinese have mare mining permits statistically than any others.
There are no South Africans at present, but we ought to attract them,”
Bouarrouj Said.
“The $270 million figure wiII be revised upwards.”
Australian
miner
Terramin
<TZN.AX> says t aims to become
one of the top 10 zinc producers an
the world when its Algerian mine starts
production by 2011 with an estimated
output of 250,000 tonnes per annum
of zinc in concentrates.
Terramin controls the Oued Amizour
project through its 65 percent share in
an Algerian holding company.
Bouarrouj confirmed start-up was
A
expected by 2011 and said output
would go to bath the Algerian and
international market.
Gold output stood at 377 kg in 2006,
the ministry Web site says, mainly
from the Tirek mine operated by a
joint venture between GMA Resources
Plc <GMA.L> and state-owned
Sonatrach.
ead inc mines reopenino
But output is set to rise to 3 tonnes per
year when the nearby Amesmessa
mine, also operated by the venture,
starts up in 2008. GMA owns a 52
percent stake of the Tirek-Amesmessa
project, with Sonatrach holding the
other 48 percent.
Arrouj Said Tirek’s output capacity n
fact stood at 600 kg per year “and with
Amesmessa coming on stream in 2008
we will reach three tonnes,” he said.
He said Algeria’s gold potential remained a promising target for foreign
investors: With an ounce at $785, there’s no doubt it’s very interesting.”
The El Abed zinc mine, closed n 2002,
was scheduled to reopen in 2008
under the management of the Office
for production and exploration and
geological research, a Chinese firm.
Algeria also planned to reopen a
lead/zinc mine at Shaabet El Hamra
near Setif town, he added, saying t had
been closed for several years for technical reasons. He did not elaborate.
Bouarrouj Said the 100 percent stateowned Ghazouet zinc refinery had a
production capacity of 40,000 t/year,
exporting output to neighbors
Morocco, Tunisia and Europe.
Algeria has many sites believed to
contain lead, zinc, gold, antimony, fluorine and rare minerals and uranium.
Extensive diamond traces exist, but as
yet no commercially-viable stones.
M.-T. B.
( ) Director-General
of Mines (MEM)
Energie & Mines
anuary 2008
MINES
mines
Cancor looks to start : Algerian mining boom
Expands from Quebec base with
new polymetallic acquisition
Par
Susan Kirwin ( )
Kamil Khob i is hard
to miss when he talks
about exploring in
Algeria
I think Algeria s
going to be the next
booming place in
terms of mining
says Khob i a native
Algerian who s called
Canada home for more
than 3 years
n a move to open up the country’s mining industry, the
Algerian government recently
auctioned off eight properties,
seven of which went to Chinese companies for between US$30,000 and
US$500,000 and one to Montrealbased Cancor for US$70,000.
Cancor’s newest property is the 44.5sq.-km Tan Chaffao copper-gold-base
metal property in the Hoggar district,
250 km north of a town called
Tamanrasset. Tan Chaffao is 45 km
northwest of the
Tan Chaffao East deposit, which is
being explored by a British junior.
Some work was done on Tan Chaffao
in the 1970s, uncovering several sulphide lenses with copper and gold discovered at surface, though little exploration bas been done in the area since
then. The lenses and associated stringers were found to be open laterally
and at depth, extending 300 to 500
meters, and up to 55 meters thick.
Cancor will spend about US$1 million
over two years for the first two phases
I
Energie & Mines
0
anuary 2008
of exploration, with US$100000 reserved for an initial National Instrument
43-101-compilant
report,
and
US$700,000 for geo-physics, sampling
and drilling, be-ginning this fall.
“We had to look to other horizons to
get interesting projects at lower prices”, Khobzi says. “Today, any project
in Canada is awful”. Khobzi also has
his sights set on a second Algerian property located along a 400-km-long
gold structure just south of the
Amessmessa gold deposit, currently
under development by an Australian
company.
“It’s like a Cadillac fault in the 1920s
when nobody knew about it. Look at
what’s happening (there) today”,
Khobzi says of the activity along the
300-km fault zone, in Quebec, which
has yielded about 100 million oz. of
gold.
Khobzi has just returned from Algeria
to present the technical offer for the
second property which was accepted.
Now will all come down to money. In
July, Cancor will submit financial offer
- the property will to highest bidder.
In terms of risk Khobzi lumps Algeria
with many other so-called high-risk
countries.
In the 1990s, more than 100,000 people were killed in fighting be-tweed die
military and islamist militants.
Although a democratic government has
been elected and violence bas declined,
the north African country has it’s share
of economic, social and political problems.
“The risk is the same as every other
country when you explore outside of
Canada”, he says. “0f course, sometimes there’s a bomb blasting in Algiers,
but that happens wherever you arc. In
London you get bombs, in Paris, in
Istanbul.”
The most recent terrorist attack in
Algeria, according to Foreign affairs
and International Trade Canada, happened on April Il, when suicide bombers killed at least 3O people and injured more than 300 others.
Cancor as raising $4 million to explore
a number of projects in Quebec’s
Abitibi region, but Khobzi says the
financial cost of exploring in Canada
today is quite high, which is what
makes Iooking elsewhere so attractive.
“At a certain point, we have to take
risks. Canadian junior companies are
all over the world... I’m just wondering
why there is no one in Iraq yet”, Khobzi
says with a chuckle. “But I’m sure one
day someone will be.”
Cancor as not the first Canadian company to acquire mineral rights an
Algeria A private company called
Sahara Resources claims to be the first
foreigner to do so in 2005. Landmark
Minerals (LML-V, LMLMF-O) signed
an option agreement with Sahara to
explore for gold, copper and uranium,
but soon after, the government cancelled all of Sahara’s permits without notice. Sahara and Landmark are still
involved in a legal battle concerning
those mineral rights.
S. K.
( ) The fervor in the voice of Cancor
Mines (KCR-T, CAOMF-O) president
In the Oxford Business Group
“Algeria’s golden future”
While it may not be
the great gold rush of
the mid-1 th century
in North America
Algeria is aiming to
kick-start a genuine
minerals boom of its
own further opening
up the country for
exploration and development
A
t the beginning of June, the
government announced the
results of tenders for the
exploration rights for nine
mining blocks, with all but one going to
companies from China. Most of the
blocks on offer have potential gold or
copper ore deposits.
The Chinese firms CGC Overseas
Construction
and
China
Geo
Engineering won the rights to conduct
exploration at sites at Bled Medina, In
Alaran, Aklet Danlel, Tinzebban,
Tihimatine, Amescor and Chet Iller,
with the winning bids ranging from
30,000 to 500,000 dollars.
Canada’s Cancor Mines was the only
other successful bidder in the tender,
gaining exploration rights for a block at
Tenchaffao.
In total, Algeria earned 6 million dollars from the exploration rights auction, a small amount if the sites prove
commercially viable.
China’s interest in Algeria’s mining
sector goes deeper than the successful
bids at the June tender. Earlier this
year, the Chinese company Shaolin
signed two exploration contracts for
sites in the provinces of Sétif, to the
east of Algiers, and in Tamanrasset in
the south. Both projects will be run in
partnership with Sonatrach, the national hydrocarbons company. Both
blocks are believed to contain deposits
of gold, as well as zinc and lead.
Speaking at the signing ceremony on
6 January, Algerian Energy and Mines
Minister Chakib Khelil said Algeria
wanted to attract more foreign investors.
“We already have partnership agreements with several partners. We want
to develop this sector”, he said.
In late May, Liu Xuehong, the vice president of China National Nuclear
Corporation’s overseas uranium exploration unit, said the company was holding talks with Algeria over possibly
buying into the country’s uranium
mining sector.
Faced with a potential shortage of fuel
for its growing nuclear energy generation programme, China has been shopping around for new suppliers. With
more than 56,000 tonnes of identified
uranium reserves, Algeria could help
China plug the gap.
The rebirth of Algeria’s mining industry, especially the gold sector, has been
a long time coming. After the country’s
independence, in 1966, and the nationalisation of its mines, the mining sector overall has not evolved. Most of the
investments in the sector have been
devoted to the mining of considerable
natural gas and oil reserves.
However, with the opening up of the
economy in the late 1990s and as part
of the drive to promote diversification
and encourage investment, new legislation was passed in July 2001 allowing
private and foreign companies to enter
the mining sector.
The new law guarantees equal treatment for all investors, allows for the
separation of above ground and under-
ground ownership, enshrines the right
of appeal to international arbitration in
the event of disputes and offers some
incentives to investors importing
equipment needed to conduct operations.
Above all, the mining law has enabled
part of the sleepy mining sector to be
denationalised.
It is difficult to evaluate the exact
amount of gold mining deposits that
Algeria has, due to the lack of mining
operations and land surveys. As the
sector is becoming deregulated and as
new players are arriving, new deposits
are updated.
One enthusiastic supporter of the
Algerian gold mining sector is Doug
Perkins, CEO of Gold Mines of Algeria
(GMA), which has a 52% interest in
the Tirek gold mine and exploration
project.
While surveys carried out in the 1980s
suggested deposits of 2.8 million oz,
Mr Perkins said recent studies show
this could be almost doubled, with the
mine’s potential being nearer 5 million
oz. This should serve as an incentive to
other overseas mining concerns.
“Mining companies would be seriously
silly not to be in Algeria”, Perkins said
in an interview with the specialised
press.
Energie & Mines
anuary 2008
PARTNERSHIP
Partnership
Toast from President Bouteflika at the lunch held in honour
of the French President
“There is a formidable potential for complementarities between Algeria and France”
The President of the Republic
r Abdela i Bouteflika gave a toast
during the lunch held in honour of the French President
r Nicolas
Sarko y on a three-day State isit to Algeria
ere is the full text:
“Mr. President,
Your Excellencies,
Ladies and Gentlemen,
I do not need to tell you my delight in
welcoming you on Algerian soil and wishing you and your accompanying delegation the warmest of welcomes.
Through you, we wish to express our
friendship to the French people and,
once again, we also wish to pass on our
sincere recognition to all French people
who have given us their help and solidarity, both during our War of
Independence and in the difficult times
we have experienced.
Mr President, you are well aware of the
friendship and esteem I have for you, as
well as the interest I continue to attach
to the development of the relations between our two countries. These relations
are based on a common history which
has had a profound impact on both of us
and which gives our relations an exceptional nature, as they rely on a human
fabric which strengthens them at the
same time as making them more complex. It is our responsibility to make the
most of them for the greater good of our
peoples and, more particularly, for our
youth who, not being responsible for the
past, nevertheless suffer from the pressure and consequences of it, and find
themselves entitled to demand a future
of peace, solidarity and prosperity different from the present that it has received
as heritage.
I am convinced that this visit will enable
us to deal, with honesty and courage,
with the problems arising in our relations and that we will find a way of
remedying this in a spirit of openness
and a shared desire of understanding
and friendship.
There is a formidable potential for scientific, technological and economic complementarities between Algeria and
Energie & Mines
2
anuary 2008
France which urges us even more to the
ambition that our relations, designed to
be exemplary, are firmly rooted in an
exceptional human pool of competences
and cultural affinities seeking personal
development.
Hence we have the responsibility of
encouraging, liberating, promoting and
supporting the scientific, economic and
cultural initiatives through the renovation, adaptation and modernisation of
the frameworks which govern our relations, by facilitating trade and the circulation of people, ideas and wealth.
Living proof of our past links and of the
vitality of our trade, the community in
France is rightly concerned by the relations between our two countries; it wishes to invest more in it.
This is a community which sometimes
experiences exclusion, perhaps suffers
more from a lack of understanding, cultural prejudices and religious ghettoisation. To create solid unity between our
two societies, it is our joint responsibility to respond to the appeals from new
generations looking for points of references, by helping them to rebuild a personality in harmony with their experience as well as with their history.
Mr President,
Algeria is, today, committed to a considerable economic, cultural and social
modernisation process, through an
unprecedented volume of investment
which will enable it to be ranked among
the emerging economies in the short
term. A major partner of Europe in the
energy sector, it is now called upon to
play a leading role in Mediterranean
trade, excluding hydrocarbons.
The realistic ambitions which it nurtures
for itself are open to those of its partners
that are ready to support it, and I think,
in particular, of French entrepreneurs
who are favoured over those of other
countries due to the proximity and the
facilities procured from a long practice
of trade and human exchanges.
Partnership
Mr President,
I know that you support the
Mediterranean Union project which is
particularly dear to you and which you
defend with much energy and optimism.
We have already discussed it and I have
not hidden from you that fact that I have
not been insensitive to your enthusiasm
and that, in Algeria, we are ready to
contribute to its establishment insofar as
we will have specified its outlines and its
objectives as well as the place it will take
alongside organisations which are already in place and which unite the countries of both banks of the
Mediterranean.
It is clear that North and South share
the same aspirations of safety, stability
and prosperity. These aspirations may
be fulfilled in a climate of solidarity
based on our unity in our diversity. But
we cannot ignore the obstacles which
have to be overcome and the crises we
need to surpass.
The largest of these crises is, obviously,
that of the Middle East where it is becoming more urgent than ever to end the
Israeli occupation of Arab territories and
enable the Palestinian people to have, in
total sovereignty, a viable State with
recognised borders.
The tragedy of the Palestinian people
has lasted over half a century and it
would be futile to imagine an appeased
and fraternal Mediterranean without
this situation being settled once and for
all. I believe I know, on this subject, that
France has always recommended the
respect of international law and the right
of all peoples to self-determination.
This has been the case on several occasions and particularly with regards what
concerns us directly since, after almost
eight years of a war of independence
costing many human lives, the Algerian
people gained independence by exercising its right to self-determination.
This undoubtedly explains our full solidarity with all peoples under foreign
domination who are fighting for their
right to self-determination.
This is particularly the case of the people of Western Sahara whose right to
self-determination is recognised internationally and should be able to be exercised freely and without restriction.
Mr President,
We must not lose sight of the fact that,
when you come to Algeria, you stand on
the African continent. You have, on
several occasions and in various circumstances, demonstrated your interest
in this continent which is struggling in
apparently insurmountable difficulties to
move away from under-development
and join the rest of the world in this
mobilisation which drives all of us and is
not concerned about those who do not
succeed in following its pace.
We fully join you in your concerns and
first and foremost because we are
Africans, intimately joined together with
all African peoples. I can tell you that,
despite appearances which might lead to
pessimism, things are moving in Africa.
The Nepad initiative, which you are well
aware of, is in the process of producing
its first results, and first of all by pushing
Africans to take responsibility and define
their own priorities and ambitions before soliciting encouragement and help
from the rest of the world. Talking about
Africa’s future is, therefore, and in my
opinion, a reasonable bet whose success
is assured.
France, of course, is called out to by the
situation of the African continent. But
the whole of Europe also is, as most
European countries have founded their
prosperity on the exploitation of African
territories they colonised at one time or
other and for longer or shorter periods.
The problem of illegal immigration to
Europe concerns young Africans who
are escaping poverty in their country
and believe they will find a better life
north of the Mediterranean. I do not
need to mention the seriousness of this
human tragedy and the despair this causes in the young who dare to face an
almost certain death in order to find better welfare.
We can understand the reaction of
European countries to this immigration
which is intensifying despite the risks it
presents. But this reaction will remain
futile if it only relies on policing repatriation measures in more or less acceptable conditions of immigrants to their
countries of origin.
It is certain that this is a human problem
whose dimensions are constantly increasing and this has to be dealt with by looking for the actual roots. This migratory
problem is not new; it has been a problem since the dawn of mankind where
human groups went looking for places
offering them possibilities for living,
with the migratory movement always
being from poor regions to the wealthy
regions. This problem therefore requires
being dealt with initially in a spirit of
solidarity and by giving all the aid necessary to the countries which are struggling in an under-development situation
that generates poverty and despair.
Mr President and dear friend,
The modern world has facilitated migration and, apart from the illegal immigration I have just mentioned, human intermingling is today favoured by the development of locomotion methods. This is
an event which must be hailed, as it is by
getting to know each other that men
succeed in understanding and in respecting each other.
The migratory flows between Algeria
and France have undergone the same
development, apart from the colonisation period where Algerian labour was
sought after and appreciated in France,
and during the French wars, from Sedan
to Dien Bien Phu where Algerians generously spilt their blood. This led to the
creation, in France, of a quite a large
Algerian colony which is, in fact, a bridge between our two countries, through
which our links of friendship and our
bilateral relations are strengthened.
On the other hand, I am sure that this
community, which contributes to your
country’s prosperity, is an element of
wealth of your population whilst remaining close to its origins.
I therefore think that any measure
attempting to facilitate and encourage
human exchanges between our countries is a healthy and well-advised policy
as it would serve the clearly understood
interests of both Algeria and France.
Mr President and dear friend,
I would like to tell you how delighted I
am about the possibility given to us,
through your visit, to pursue our meetings and exchange our views on the
problems which concern us directly, but
also on the international problems which
concern us both.
I would, however, like your programme
to also enable you to relax and get a taste
for the charms which can be offered by
our country and the hospitality traditions of our people.
Thank you.”
Energie & Mines
anuary 2008
PARTNERSHIP
Partnership
State Visit of President Nicolas Sarkozy to Algeria
“Reviving the relationship
between the two countries
is a priority of my action”
We are ready to face this part of our history colonial past and consider it without taboo even the darkest part of it
The President of the French Republic,
Mr Nicolas Sarkozy, stated, in Algiers,
that “reviving the relationship” between
Algeria and France is a priority of his
action: “a relationship indeed triggered
by the profound injustice of the colonial system”.
“Since the day I was elected, I have
wanted to make reviving the relationship between our two countries a priority of my action”, emphasised the
French President in a speech given
during a lunch held in his honour by
the President of the Republic, Mr
Abdelaziz Bouteflika.
“We are ready to face this part of our
history (colonial past) and consider it
without taboo, even the darkest part of
it”, continued President Sarkozy.
“Since Algeria’s independence, our two
countries have undertaken to build a
relationship indeed triggered by the
profound injustice of the colonial system. You, yourselves, fought this system, which contradicted the founding
values of the French Republic, as (the
late) Ferhat Abbas so eloquently stated”, remarked Algeria’s host.
He took this opportunity to pay tribute
to the “sacrifice of tens of thousands of
Algerians who died during two world
wars”, likewise hailing “the memory of
all the civilian and military victims of
the Algerian War”.
“Your history has experienced other
sufferings and I wish to express
France’s solidarity with the victims of
the terrorism which struck your country in the 1990s”, added President
Sarkozy, indicating that this “blind”
violence has also struck his country “on
its own territory, and through its nationals which lived here, who worked with
you, alongside you”.
Energie & Mines
anuary 2008
The French President emphasised that
“Algeria has been able to stay standing
and courageously resist, albeit often
alone and misunderstood at the time”.
“Know that your enemies are our enemies. I want to express to you all the
respect and admiration I have for the
courage of the entire Algerian people.
France is and will be at your side as we
know that you are at our side”, he indicated.
President Sarkozy further stated that
France “can and must help” Algeria to
become one of the emerging countries,
specifying that this is in the mutual
interest of the two States as, he said,
“their destinies are linked”.
“If the southern bank of the
Mediterranean did not succeed in its
economic take-off, how could the northern bank live in security?” he further
questioned, revealing that Algeria’s
prosperity, security, hopes and disappointments are also those of France.
Talking about the relations between the
two countries, President Sarkozy
emphasised “the fervent obligation of
building a shared future together (…)
to revive the Algerian-French relationship around a triptych: training, investing, exchanging”.
With regards investment, the French
President stated that “French companies are already investing”, emphasising, however, that “we need to encourage them together and help them to
move up the ladder (...)”.
For energy, the French Head of State
indicated that this is “a decisive element of the relationship between (the)
two countries”, adding that the signatures which have taken place in the
domains of gas and nuclear energy
“strengthen the indissoluble links
which exist between (the) two countries and prepare for the post-petroleum for the future generations”.
With regards exchanges between the
two peoples which represent “the
human dimension” of the partnership
between the two countries, he indicated
that “the Algerian community in France
is by far the largest foreign community
present on our soil and it plays a particularly dynamic role in (the) exchanges”.
President Sarkozy stated that he attaches “very great importance” to the circulation of people, emphasising the
need to continue and reinforce “on
both sides” the progress made on this
matter.
He expressed his desire to “implement
everything” to improve the circulation
of people between the two banks of the
Mediterranean.
On the question of the regional crises,
he indicated that “it is, overall, through
Partnership
the new vigour of their political collaboration,
that France and Algeria will be able to contribute
better to the settlement of the main regional crises”, specifying that “the conflicts in the NearEast are the focus of the concerns and frustrations of public opinions in our common region”.
“After the Annapolis conference, we have to
continue to put all our effort, both French and
Algerians, into helping the return of a real dynamic of peace (…)”, he stated.
With regards the issue of Western Sahara,
President Sarkozy hailed the new dynamism with
the holding of direct meetings between the parties, under the aegis of the United Nations, in
accordance with resolutions 1754 and 1783 of
the Security Council.
“With the support of all the countries of the
region which have an influence on this issue, led
by Algeria, I strongly hope that a lasting, realistic
and acceptable solution for all parties may be
found on this issue which has poisoned the relations between the countries of Maghreb for three
decades”, he added.
Finally, the French President invited Algeria to be
“one of the driving forces” of the Mediterranean
Union project which he has initiated.
Acknowledgements
r§UML∞«Ë WÆUD∞« d¥“Ë w∞UF± bOº∞« v∞≈
d¥bI¢Ë dJ® W∞U߸
fKπL∞« rßS°Ë wLßS° rJ¢œUOß v∞≈ ÂbI¢« Ê√ wM≠dA¥Ë w∞ VOD¥
dJA∞« w≤UF± vLßQ° …bOÆeL¢ W¥bK° wM©«u± rßS°Ë ÍbK∂∞« w∂FA∞«
«c≥ vK´Ë dO∂J∞« qCH∞« «c≥ vK´ rJ¢œUOº∞ ÊU≠dF∞«Ë d¥bI∑∞«Ë
ÍbOß rJKCH°Ë ÁUMOML¢Ë t° UMLK• U± «dO∏Ø Íc∞« „¸U∂L∞« ŸËdAL∞«
vK´ …bºπ± WIOI• v∞≈ ‰u∫¢ rJ∞U∏±√ sOBKªL∞« qØ œuN§Ë d¥“u∞«
wLßd∞« sO®b∑∞U° Êu±uI¢ d¥“u∞« w∞UF± r∑≤« U≥Ë lÆ«u∞« ÷¸√
w∞UF± .W¥bK∂∞« ÁcN° WM¥bL∞« “U¨ ŸËdA± “Uπ≤_ ‰UG®_« ‚öD≤_
ÊUØ bI∞Ë WHK∑ªL∞« r§UML∞«Ë ÊœUFL∞U° WOM¨ …bOÆeL¢ W¥bK° Ê≈ d¥“u∞«
r§UML∞« v∞≈ W∂º≤ r§UML∞« W¥«“u± u≥ o°Uº∞« …bOÆeL¢ W¥bK° rß≈
.wº≤dH∞« ¸ULF∑ßù« ÊU°≈ WKG∑º± X≤UØ w∑∞«Ë WIDML∞U° …œu§uL∞«
bBÆ rJO∞UF± v∞≈ ÂbI¢« Ê√ rOEF∞« ·dA∞ t≤S≠ ”Uß_« «c≥ vK´Ë
r§UM± : ôË√ : UNM± dØc≤Ë r§UML∞« Ác≥ `∑≠ …œU´≈ w≠ dOJH∑∞«ËdEM∞«
dOî_« «c≥Ë W¥Ë«e∞« w∫° f∂π∞« lKI± : UO≤U£ - ¸«d§u° w∫° b¥b∫∞«
- ‹«uMß lC∂∞ ‰öI∑ßù« bF°Ë W¥¸ULF∑ßù« …d∑H∞« w≠ öG∑º± ÊUØ
Ê√ UN≤UJ±S° w∑∞«Ë WOK∂π∞« o©UML∞U° W¥dªÅ q∑Ø œu§Ë : U∏∞U£
.vB∫∞« XO∑H¢ q±UF± v∞≈u∫∑¢
lÆ«u∞« ÷¸√ vK´ ‹bºπ¢ «–≈ ‹U•d∑IL∞« Ác≥ Ê≈ d¥“u∞« w∞UF±
WHB° …bOÆeL¢ W¥bK° vK´Ë W±U´ WHB° s©u∞« vK´ rF¢ Ê√ UN≤UJ±S°
WO´UL∑§ù«Ë W¥œUB∑Æù« WOLM∑∞« ‰Uπ± w≠ ULOß ôË lHM∞U° WÅUî
.WF¥dß WOJO±UM¥œ WØd• oKª¢ Ë W∞UD∂∞« vK´ wCI¢ Ê√ UN≤Q® s±Ë
…d± d∂´« Ê« ô≈ wMFº¥ ô r§UML∞«Ë WÆUD∞« d¥“u∞« w∞UF± dOî_« w≠Ë
…¸U¥e∞« ÁcN° U≤uL∑≠d® Ê√ vK´ rJ¢œUOº∞ Íd¥bI¢Ë ÍdJ® s´ Èdî√
rJI≠Ë W¥bK∂∞« ÊUJßË WOK∫L∞« ‹UDKº∞« qØ ‹UO∫¢ uK∂I¢ .WظU∂L∞«
.œU∂F∞«Ë œö∂K∞ lHM∞«Ë dOî tO≠ UL∞ tK∞«
ÍbK∂∞« w∂FA∞« fKπL∞« fOz¸
œu∞u± bL∫±
Signature of
5 agreements and
4 trade contracts
worth 5 billion euros
In Algiers, Algeria and France
have signed five agreements and
four trade contracts on energy,
culture and transport, in the presence of the Presidents of the two
countries, Messrs Abdelaziz
Bouteflika and Nicolas Sarkozy.
The first agreement, which is a
partnership agreement and the
documents related to an administrative and financial protocol,
were signed by the Minister of
Foreign Affairs, Mr Mourad
Medelci, for the Algerian side,
and by Mr Jean-Louis Borloo,
Minister of State, Minister of
Ecology
and
Sustainable
Planning and Development, for
the French side.
The Minister of Energy and
Mines, Mr Chakib Khelil, signed
with Mr Borloo a cooperation
declaration on the peaceful use
of nuclear energy. In this same
domain, a cooperation agreement on the peaceful use of
nuclear energy was signed by
Mr Fayçal Abbas, Secretary
General of the Ministry of
Energy and Mines, and France’s
Ambassador
to
Algeria,
Mr Bernard Bajolet.
In the cultural component, a
master agreement on cinematographic
coproduction
and
cooperation was signed by the
Minister of Culture, Mrs Khalida
Toumi, and her French counterpart, Mrs Christine Albanel.
A master agreement was also
signed by the Director General of
Algerian television (ENTV),
Mr Habib Chawki Hamraoui,
and Mr Emmanuel Hoog,
Chairman & CEO of the French
National Audiovisual Institute
(INA), on the transfer of part of
the latter’s documentary funds to
Algerian television related to the
history of Algeria from 1940 to
1962, from the time of the
French colonisation.
With regards the trade agreements, the Chairman & CEO of
Sonatrach,
Mr
Mohamed
Meziane, and his counterpart
from Gaz de France (GDF),
Mr Jean-François Cerelli, signed
a master agreement on the extension
of
the
long
term
gas contract between the two
companies.
Mr Meziane also signed, with the
Managing Director of Total,
Mr Christophe de Margerie, a
contract to construct an ethane
vapour-cracking plant in Arzew
(west).
The construction of a combined
cycle power plant in Terga (Aïn
Témouchent, west) was the subject of a contract signed by the
Chairmen & CEO of Sonelgaz,
Mr Noureddine Bouterfa, and of
Alstom, Mr Patrick Kron.
Finally, an operating and maintenance contract for the first line of
the future Algiers metro was
signed by the Managing Director
of the Algiers Metro Company
(EMA), Mr Abdelkader Mekerbi,
and Mr Pierre Mongin, President
of RATP-Development.
The signing ceremony took place
at the Palais de la culture in the
presence of the Algerian and
French delegations as well as
numerous journalists.
Energie & Mines
anuary 2008
PARTNERSHIP
Partnership
State Visit of President Nicolas Sarkozy to Algeria
FCE-Medef meeting : Option
for a long term partnership
The reinforcement of the long term economic partnership between Algeria and
France and the diversification of this partnership were the dominant themes
of the meeting of Algerian and French employers organised jointly in Algiers
by the Employers’ Forum, Forum des chefs d’entreprise (FCE), and the
Mouvement des entreprises de France (Medef).
This meeting, which was closed by a
speech from the French President,
Mr Nicolas Sarkozy, on a visit to
Algeria, who called for French companies to invest more in the Algerian market, will have enabled an improvement
of the business environment to be
revealed in the country through the
“success stories” presented by French
companies set up in Algeria and more
focus to be placed on the partnership in
terms not only of investments, but also
of the training of human resources and
the transfer of technology.
In his speech, President Sarkozy clarified his concept of partnership based
on an “exceptional partnership” focused on strategic projects for the countries’ future.
This also means, he added, encouraging French companies to participate in
the modernisation effort of Algeria and
to invest there and also to support it in
its training improvement policy which
it wishes to be, he confirmed, a “priority” of this cooperation over the coming
years.
Recalling that French investments in
Algeria have tripled in the last three
years to reach 300 million euros in
2006, Mr Sarkozy did however acknowledge that, with regards the potential
offered by Algeria and the importance
of the relations between the two countries, “French companies can and must
do better”. For him, “we need to step
up a gear”.
In this sense, he urged French
employers to “commit further still” as,
he stated, “the Algerian market is full of
promises” whilst pointing out that
Algeria has “some of the healthiest
finances in the world” and an “exceptional investment programme” as well
Energie & Mines
66
january 2008
as “courageous reforms” which have
been undertaken to modernise its economy.
Mr Sarkozy further stated that French
companies are ready to invest within
the framework of the privatisation programme in the industrial and banking
sectors.
He felt that “creating jobs and investing
in Algeria also means investing for the
stability of Europe and France”.
Wishing that his country would once
again become the number one foreign
investor in Algeria, the French
President emphasised that France is
making way with the investments planned with Total in Arzew and by GDF
on the Touat deposit, which represent
almost 2 billion euros, to which is
added the Alstom project for the construction of a tram assembly factory.
Training, a “major focus”
of cooperation
Dealing with SME for which he would
like lasting partnerships between those
of the two countries, the French
President encouraged the completion
of the project to open in Algiers a “maision de Marseille-Provence” by the
Chamber of Commerce and Industry of
this region of France for the development of this category of companies in
Algeria. Mr Sarkozy also emphasised
the training component which he said
was one of the “major focuses” of his
visit to Algeria. Whilst recalling his
country’s participation in the creation
of the Algiers Business School, he indicated that his country is also helping
with the creation of the future Higher
Institute of Technologies and with the
reform of Algerian business and mana-
Partnership
gement schools and expressed his support to the project of an Algeria-French
university.
On this point, he also claimed that
“French companies must now systematically incorporate technical training in
their tenders, as far as to include actual
transfers of technology”. As for the
contracts which will be signed during
his visit to Algeria, he indicated that
these amount to more than 5 billion
euros, related to structuring equipment: the trams of Oran and
Constantine, the management of the
Algiers metro, the project management
of a motorway, railways line, petrochemical factory, dams and a power plant.
An agreement on civilian nuclear energy will also be signed, he stated, specifying that this project is part of the framework of Algeria’s long term development strategy.
In his speech, Mr Sarkozy indicated
that, on the African continent, Algeria
is France’s number one client and that
is it number two after China for the
countries outside the OECD.
As for France, it is Algeria’s number
one supplier with almost 20% market
share. In terms of energy, Algeria is
France’s number 3 gas supplier with
16% of its supplies, he further specified.
Speaking in front of the French
President and the businessmen from
both countries, the Minister of Industry
and the Promotion of Investments,
Mr Abdelhamid Temmar, emphasised
that this meeting “marks the quality of
the economic relations” between
Algeria and France where “only companies are capable of reinforcing these
relations”. However, he noted, the
trade relations between the two countries have been marked by an “abrupt
reduction” of almost 50%.
Furthermore, the Algerian Minister called upon French companies to participate more in the development and
investment programmes in Algeria and
to intensify trade.
Mr Temmar particularly wished that
French companies would “adjust their
partnership strategy” with Algeria,
whilst assuring them that the Ministry
he heads will be available to support
them for the formalisation of their
investment projects. The speeches of
the French President Mr Sarkozy and
of the Algerian Minister Temmar were
preceded by an interactive discussion
between 150 French businessmen and
their Algerian counterparts.
GDF will invest 1 billion dollars
in the Algerian South
Passing over the few malfunctions still
hindering investments, often dealt with
in this kind of meeting, this time the
businessmen of both parties focused on
the examples of successful investment
projects undertaken by French companies in Algeria as well as on areas in
which the partnership may be strengthened.
Talking about its projects in Algeria, the
Chairman & CEO of Gaz de France
(GDF), Mr Jean-François Cirelli, indicated that his company will make an
investment of more than 1 billion dollars in the Algerian South which will
enable more than 400 jobs to be created in the specialities, particularly
exploration and production. Specifying
that GDF has been Sonatrach’s client
since 1965 and its number one
European client for LNG, Mr Cirelli
indicated that the duration of the relationship between the two companies
will go up to almost 55 years of partnership thanks to the renewal of its
Algerian gas supply contract which will
run up until the year 2019.
For his part, the Chairman of the Suez
Group, Mr Gerard Mestrallet, whose
company is present in Algeria through
hydraulic, engineering and water treatment projects, confirmed that its own
concept of developing the cooperation
between Algerian and French companies in the sectors it covers must not be
restricted to simply a supplier-client
relationship. This also means, he stated, putting in place an AlgerianFrench partnership capable of winning
contracts throughout the world.
Reporting on the company Seeal which
has been operating in Algiers since
2005 for a five-year contract, this com-
pany’s representative indicated that at
the end of 20 months of activity, this
company has been able to assure 99.7%
water quality, in accordance with the
internationally accepted standards.
Sustainable development
where only the workforce…
Running water available 24 hours a day
has currently increased to 80% compared to 65% beforehand in Algiers, he
noted. According to his forecasts, the
wilaya of Algiers will have running
water 24 hours a day by 2009.
He also indicated that this company
has cleaned up 5 beaches which prohibited bathing in the wilaya of Algiers. In
his speech, the Chairman of the FCE,
Mr Réda Hamiani, emphasised that the
major recommendations of Algerian
companies mainly rely on a sustainable
development “less and less dependent
on hydrocarbons and increasingly
dependent on the workforce”.
Faced with the stakes of globalisation,
Algerian industry (SME particularly)
wants more competitiveness and has
increasing needs in terms of developing
technology and management, he further said.
In this sense, he called upon French
companies to pursue their efforts in
view of diversifying their investments
and making the most of the opportunities offered by Algeria. For her part, the
President of Medef, Mrs Laurence
Parisot, said she was “surprised” by
reports stating a certain amount of
“coldness” from French investments
with regards the Algerian market in
terms of investments, recalling that her
country is the number one investor,
excluding hydrocarbons, in Algeria.
Summarising the experience of French
investors in Algeria, she emphasised
that the latter accept that “to invest in
Algeria, you have to be patient, but
when you commit to it, it works”.
Acknowledgements
From the President of the Employers Forum des chefs
d’entreprise to Minister of Energy and Mines
“Dear Minister,
I am writing to acknowledge receipt of your correspondence received today sending
the practical guide to HSE action in the Energy sector and the Energy and Mines
review. Thank you. I will certainly find a lot of interest in reading them. Yours faithfully,”
The President, Réda Hamiani
Energie & Mines
67
january 2008
PARTNERSHIP
Partnership
Algeria-France
In an interview on Algerian Radio
Mohamed Meziane : “French petroleum
companies still “cautious” about investing
in Algeria”
The Chairman & CEO of Sonatrach, Mr Mohamed Meziane, stated that
Algerian-French cooperation in the energy domain has not yet reached
“the level hoped for by the two parties” due to the persistent “cautiousness”
demonstrated by French petroleum companies about investing directly
in Algeria.
Talking on the waves of National Radio
Channel I, Mr Meziane stated that the
main French energy companies are still
hesitating about undertaking direct
investments in Algeria, preferring “safe
projects” particularly in the domain of
the construction of industrial infrastructures where dozens of French companies are already present, he specified.
“The level of French investment in the
energy sector is still low compared to
that of Americans, despite the comparative advantages offered by the geographic proximity and the language,
which should have favoured it”, added
the head of Sonatrach.
In this respect, Mr Meziane emphasised that French companies, with the
exception of Total and Gaz de France
(GDF) which directly invest in France,
attempted, during meetings with the
Algerian party, as part of President
Sarkozy’s visit to Algeria, to win, in
particular, industrial infrastructure
projects, mentioning the difficulties
hindering, in their opinion, direct
investment in Algeria.
To this end, he specified that “the new
Hydrocarbons Act enables all companies to invest” in the best conditions.
“The difficulties mentioned by the
French party, during these meetings,
are hardly likely to hinder investment”,
he said.
“The energy investment opportunities
offered by the Algerian market are
capable of supplanting all hindrances”,
he stressed.
For his part, the Minister of Energy and
Mines, Mr Chakib Khelil, reproached
French companies, in an interview on
Energie & Mines
68
january 2008
the television channel Beur TV, for not
investing in exploration and for looking
for safe energy projects, and stressed
the fact that French companies were
not more privileged than others.
Sonatrach “will not offer French companies more incentives than others”,
emphasised Mr Meziane, adding that
they (French companies) “must accept
taking some risks” in the same way as
any other investor.
This company head further felt that the
level of Algerian-French cooperation
was capable of achieving a “satisfactory level” just like the development of
some specific domains such as the
renewable energies, particularly civilian
nuclear energy.
He pointed out that his company was
looking for concrete projects in this
domain and that negotiations had been
initiated to this end.
These projects, specified Mr Meziane,
concern the use of nuclear energy in
the health sector, mining exploration
and seawater desalination. In this
respect, it should be pointed out that
Sonatrach had proposed that the
French partner invest in 4 or 5 desalination plants using nuclear technology.
On the fringes of President Sarkozy’s
visit, Sonatrach and Total signed a
contract to construct an ethane
vapour-cracking plant in Arzew of an
amount of 3.9 billion dollars with 1.6
billion dollars of financing from the
French company.
For its part, Sonelgaz signed, with
Alstom, a contract to construct a combined cycle power plant in Terga (Aïn
Témouchent) for a cost of 1.3 billion
dollars with 800 million dollars of
financing from the French partner.
The most important agreement related
to the five-year extension (2014-2019)
of the contract to supply France with
LNG for a volume of 6 billion cubic
metres and a cost of 15 billion dollars.
This cost is likely to increase in line
with the increase in gas prices on the
international market, specified Mr
Meziane, who stated that this shortterm contract reflected Sonatrach’s
new strategy which consists of progressively abandoning the rule of long-term
gas contracts.
Mr Meziane further indicated that, as
part of its strategy to expand abroad,
Sonatrach was looking to remove all
the obstacles hindering its rightful
ambition to access the European distribution market, in the name of the liberal principle of mutual investment.
“Globalisation forces us to accept their
investments, so why would they prevent
us from accessing the European distribution market?” he asked.
“Europe talks about an open energy
market, but takes measures contrary to
the principle of the right of energy producing countries to own oil and gas
pipelines on the consumer markets”, he
added.
“This question will be our leitmotiv in
all our future meetings with the
European party and I think that we are
in the process of gradually imposing
our ideas and our approach until we
succeed in being treated as an equal”,
concluded the Chairman & CEO of
Sonatrach.
Partnership
President Sarkozy in front of the students
from the Bachir-Mentouri University
“The Algerian people has fought
terrorism “alone and courageously”
The French President, Mr Nicolas Sarkozy, stated that the Algerian people has
fought terrorism “alone and courageously”, reiterating his country’s support to
fighting terrorism.
“If Algeria had not fought terrorism
in the 1990s, I would not be here
talking to you today”, stated Mr
Sarkozy during a speech given at
the Bachir-Mentouri University, in
the presence of the President of the
Republic, Mr Abdelaziz Bouteflika.
Speaking to young Algerians, the
French President declared: “You
must be proud of being young
Muslims, because Islam is a great
civilisation.”
“I wanted to talk to young
Algerians because they hold in their
hands part of the destiny of a great
civilisation which has contributed
to mankind wisdom, art, culture
and science and in which so many
men in the world still hope”, he
added.
For President Sarkozy, “youth will
make friendship live”, specifying
that “governments can make it the
principle of their policies but, at the
end of the day, it (friendship) will
be the work of the Algerian and
French youth”.
With regards Algerian-French
friendship, Mr Sarkozy felt that this
friendship “can only be based on
trust”.
“Algeria and France have to trust
each other”, he hammered home,
citing the cooperation agreement
on civilian nuclear energy signed
between the two countries, as a
“mark of this trust which France
has in Algeria”. “Because they have
decided to trust each other, Algeria
and France have agreed to consider
the implementation of an immigration policy which will be decided
upon together”, he continued.
According to Mr Sarkozy, this policy would enable the young people
of both countries to “be able to
study, more easily, wherever they
want, and enable entrepreneurs and
researchers to circulate freely”.
The French President further stated
that it would enable us “to fight illegal immigration better together”
and “to define together the incentives to be put in place so that the
elite of Algerian youth is encouraged to return to Algeria which
needs its intelligence, its skills, its
energy and its imagination”.
In this respect, Mr Sarkozy indicated that he had proposed to
President Bouteflika that they
“consider establishing a joint
Franco-Algerian university”, as well
as “joint centres of excellence composed of academics, researchers
and technicians from both our
countries which we will put in place
in medicine, microbiology, water,
renewable energies or major risks”.
With regards the Mediterranean
Union project, he confirmed his
commitment to formalise the idea
which he, himself, had launched.
“The Mediterranean Union, he
said, is a gamble dictated by ideals
as much as by reason”, specifying
that France “has come to propose
this gamble to Algeria” and that
France, “with Algeria, wants to win
it.
The French President further
undertook to fight all forms of
racism and Islamophobia, emphasising that Algeria “will always find
France at its side” when it comes to
fighting extremism and terrorism.
“Colonialism is an
undertaking of enslavement and exploitation”
The French President, Mr Nicolas Sarkozy,
indicated in Constantine that the “colonial system was unjust by nature and could not be
experienced other than as enslavement and
exploitation”.
“I have not come to deny the past”, added the
French President in front of the students and
professors of the Bachir-Mentouri University,
in the presence of the President of the
Republic, Mr Abdelaziz Bouteflika, emphasising that “Algeria and France need each
other”.
The French Head of State acknowledged, in
this context, that the “mistakes and crimes of
the past are unforgivable”, emphasising that
“our capacity to defeat the intolerance, fanaticism and racism that fuel future crimes and
wars will be what our children judge us on”.
“Let’s build on what unites us and not to what
divides us”, urged the French President who
called upon Algerians and Frenchmen alike to
experience “their diversity”.
Furthermore describing Emir Abdelkader as
“the greatest person in Algerian history”, he
revealed that “this hero fought until his last
breath for Algeria's independence”.
Highlighting his “so radiating” faith, “his so
authentic, so open and so humanist Islam”, he
also recalled that in 1860, in Damascus, this
man of wisdom and culture had saved “so
many Christian lives”.
On the Palestinian question, the French
President stated that “depriving the
Palestinians of a Nation-State is an injustice
which France does not accept”, launching an
“urgent” appeal to the people of Israel “not to
inflict on the Palestinian people the same
injustice that they themselves suffered for so
many centuries”.
“I appeal to the leaders of the Israeli people
and the Palestinian people to seize the peace
that is within reach today if they can show
themselves able to overcome the hatred…
there is no future in hate”, he added.
Energie & Mines
69
january 2008
PARTNERSHIP
Partnership
Partnership
Energie & Mines
71
january 2008
PARTNERSHIP
Partnership
Algeria-Italy : Senior level meeting in Alghero, Sardinia
The channel of friendship
and pragmatism
A real success both politically and economically above
all, the Algerian-Italian summit held on the island of
Sardinia and chaired jointly
by the President of the
Republic and the President of
the Italian Council of
Ministers, stood out due to
the pragmatism and spirit of
rationality that prevailed
during all the negotiation
phases, thanks, rightly, to the
vision and planning of the
leaders of the two countries.
From the satisfaction assuredly on
both sides through the first reading of
the summit’s final declaration, the feeling revealed and the ambitions
demonstrated can only contribution to
the translation of a treaty of friendship,
good neighbourliness and cooperation
and particularly favour the establishment of an economic and energy partnership, deemed, further, as a guarantee of the sustainability and solidity of
the relations and a lot has been done in
this context to attribute an all-encompassing nature to this cooperation to
the real foundations through the diversity of its strategic focuses and the originality of its design or of its drawing
up relying in this respect on understanding and the multiplication of
exchanges.
Both consistent and strategic above all,
the Galsi agreement, with all its socioeconomic impacts, is a preamble to the
promotion of this cooperation in view
of the assigned development prospects
of the partnership. In the domains of
basic infrastructures, defence, SME,
cultural and scientific domains and
training domains amongst others, the
political desire expressed and already
translated by concrete actions whilst
awaiting their reinforcement in favour
of the upcoming meetings, in accor-
Energie & Mines
72
january 2008
dance with the decreed timetable,
breaks away from a traditional relationship process to thus enable all the
ambitions and hopes to be fulfilled.
This hope is supported by the concordance of the points of view and positions on a certain number of subjects
of international news and on the vision
of a world which we want to be stable
and full of peace, communicative and
respectful of universal values, fair and
equitable in its relations, tolerant and
respectful of differences and of civilisations. Algerians and Italians are, in
this case, committed to fighting all
forms of terrorism and fighting illegal
immigration, whilst discussing certain
conflicts, such as the IsraeliPalestinian problem, the decolonisation of Western Sahara and the crisis
in Iraq on the basis of UN recommendations. Between the two banks of this
Mediterranean Basin, an authentic
bridge has been built whose construction obeys the rules of efficiency,
rigour and rationality to overcome
weather hazards, a context or passionate effect and the mood of the day.
Algeria and Italy have given the time
by the clairvoyance of their leaders
mindful, above all, of the interests of
their respective countries and committed to respecting their rights and
convictions. These leaders are animated by good faith and are determined
to make this Mediterranean Basin a
region of peace, progress and exchanges between the peoples of its two
banks. These leaders are, finally,
bound by their commitment to work in
the sense of a rapprochement between
a European Union and an African
Union, and European Union and
Mediterranean countries. This is a
great Algerian-Italian lesson in the
Mediterranean cooperation which
marks out and opens up the path at the
same time to the Basin's countries.
During a joint press
conference with his Italian
counterpart
Medelci calls upon
Italian companies to
increase their investments in Algeria
Mr d’Alema has announced that trade between the two countries will reach 60 billion
dollars.
In Alghero (Sardinia, Italy) the Minister of
Foreign Affairs, Mr Mourad Medelci, called
upon Italian companies to increase their
investments in Algeria deeming their number, 140 in total, “insufficient” at present.
Talking during a press conference held
jointly with his Italian counterpart, Mr
Massimo d’Alema, at the end of the senior
level Algerian-Italian meeting, the head of
Algerian diplomacy remarked that, notwithstanding this number, "the situation is evolving in the sense of an increased presence
of companies" in Algeria.
“We want an improvement and growth of
Italian investments in Algeria”, further added
Mr Medelci.
With regards the military cooperation between the two countries, Mr Medelci
announced that an Italian technical commission will stay in Algiers in January 2008
within the framework of training.
For his part, Mr d’Alema announced that
trade between the two countries "will reach
60 billion dollars", reaffirming, in this
context, that Italy "will sustain the bilateral
cooperation, particularly in the domain of
SME-SMI”.
In this sense, he stated that the “strategic
partnership” between Algeria and Italy
remains “a model to be followed for Europe
and the entire South-Mediterranean bank”,
adding that his country “supports Algeria’s
membership to the World Trade
Organisation (WTO)”.
Furthermore, he stated that “Italy considers
the terrorism in Maghreb a threat for this
region but also for Europe”, hence, he
added, “the necessity to combine our efforts
in the fight against this evil”.
Partnership
Cooperation on
the natural gas
market in Sardinia
Signature of an agreement with Sonatrach
Sonatrach and the autonomous region of
Sardinia announce that they have signed
an agreement defining the basic principles
of their cooperation on the natural gas market in Sardinia.
This agreement provides for the establishment of a joint venture company entrusted
with the development of the marketing and
the sale in Sardinia of Algerian natural gas
which will be transported through the Galsi
pipeline.
It represents another important stage in the
development of the Galsi pipeline project.
On this occasion, Mr Meziane, Chairman &
CEO of Sonatrach, stated: “We are particularly satisfied with the conclusion of this
agreement which demonstrates the common commitment to develop real cooperation which will enable Sardinia to access
the least polluting source of fossil energy.
For Sonatrach, this agreement is directly
part of its strategy to penetrate the
European gas downstream.” Mr Soru, president of the autonomous region of
Sardinia, for his part indicated: “We are
very proud of the progress being made on
the Galsi project and of the strong collaboration initiated with Sonatrach. This new
step forwards with the participation of Sfirs
represents a major partnership opportunity
for the future.” As a reminder, Sfirs is a
10% shareholder in the Galsi project which
is developed also in partnership with
Sonatrach with a stake of 36%, Edison with
18%, Enel 13.5%, Wintershall 13.5% and
Hera 9%. The Galsi project consists of the
construction of a pipeline comprised of two
on-shore sections (in Algeria and Sardinia)
and two offshore sections. Starting at Hassi
R’mel, the Galsi pipeline will stretch over a
distance of 1,470km approximately, crossing the island of Sardinia to end up in
Tuscany, Italy. Its initial capacity will be
8 billion cubic metres/year, which will
contribute to securing Italy’s gas supplies,
in general, and through this agreement to
the development of Sardinia’s gas market
in particular.
Senior level meeting in Alghero, Sardinia
Peace, collective security,
co-development
Algeria-Italy. Two countries that know each other well. Bouteflika and
Prodi, who both appreciate each other, have decided to meet to raise the
level of multipurpose cooperation relations and to instil in them the trust
which they have in each other. In addition to their bilateral relations,
which are likely to be reinforced in all aspects, and undoubtedly more so
after this meeting in Italy, Algeria and Italy are meeting within the framework of the Euro-Mediterranean dialogue and of the association agreement which binds the European Union to Algeria, and also within the
group of the “5+5”.
There are many fields of cooperation. Not only the energy sector binds
Italy to Algeria in terms of guaranteeing the oil and gas supply. Italy is an
industrial country, advanced on the issue of mastering technology, which
has a performing education system, which has a lot of experience in the
field of construction and public works.
Both countries can only reinforce their links and not only because they
are both on the coasts of the Mediterranean and both forced to register
their relations within the framework of a good neighbours policy.
Both countries base their foreign policy on three strategic pillars, namely:
peace, collective security and co-development.
The economic relations are likely to fair well as there is interest from
both peoples, from the businessmen of both countries. Relations in terms
of defence cooperation are likely to be reinforced initially in relation to
fighting terrorism, then in relation to security in the Mediterranean and
will then be translated both by the interoperability to be established by
the organisation of joint military manoeuvres and by the intensification of
the cooperation in terms of training.
Both countries’ businessmen, who will meet thanks to this opportunity
offered by the meeting between Bouteflika and Prodi, will identify the projects which will lead them to cooperate and, potentially, enter into partnership relations.
Agreement related to the Galsi
pipeline project finalised
The Minister of Energy and Mines, Mr Chakib Khelil, and the Italian
Minister of Economic Development, Mr Pier Luigi Bersani, finalised, in the
Rome, the Algerian-Italian intergovernmental agreement related to the
Galsi underwater pipeline project which should connect Algeria to Italy.
Furthermore, the company Galsi and the company Snam Rete Gas also
signed the agreement related to the construction of the Italian section of
this pipeline.
The Galsi pipeline, 940km long, of which 640km is on the Algerian territory, should supply some 8 billion cubic metres of gas a year to Italy via
Sardinia as of 2009, it was recalled.
The company Galsi, in charge of constructing the project, is owned 36%
by the national hydrocarbons company, Sonatrach, and the groups
Edison (18%), Enel and Wintershall (with 13.5% each), Hera Trading (9%)
and two companies of the Sardinian region with 10%.
Energie & Mines
73
january 2008
PARTNERSHIP
Partnership
Bouteflika to the Italian press agency Ansa
“Our bilateral relations
are highly satisfactory
in all sectors”
“I am determined, under all circumstances, to respect the sovereignty of the
Algerian people and all its means for democratic expression”.
The Prodi government has
made the development of relations with the Mediterranean
countries, and particularly
with Algeria, a priority. In your
opinion, Mr President, has
there been a real evolution in
the political, economic and
cultural relations between
Algeria and Italy?
The President of the Republic, Mr
Abdelaziz Bouteflika, granted an interview to the Italian press agency Ansa.
Here is the full text:
On 14 November the first summit between Algeria and Italy
will take place in Sardinia.
What report do you, Mr
President, make of the economic relations which bind your
country, Algeria, to Italy?
What are you satisfied with
and what would you like to
change and improve?
The economic relations between
Algeria and Italy are strengthening day
by day. Since the 2003 signing, by both
our countries, of the Treaty of
Friendship, Good Neighbourhood and
Cooperation, they have been evolving
through the establishment of a real economic partnership.
This evolution is favoured by the return
of peace and stability in Algeria where
Italian companies are increasingly setting up.
In this respect, in the last few years,
about forty investment projects have
been the subject of a show of interest.
Today, your country is our number two
client and supplier. This is highly satisfactory, insofar as more than 120
Italian companies are currently operating in Algeria which is, for its part, one
of Italy’s main partners, particularly
with regards energy.
But we could go a lot further on the
path of promoting economic partnership. In this respect, this would in fact
mean extending the traditional trade
relations through a real development
Energie & Mines
74
january 2008
partnership, by inviting our economic
operators to put their energy into the
potentials still unexploited which exist
on both sides, whilst making the most
of the excellent nature of the political
relations which bind Algeria and Italy.
When my friend Romano Prodi visited
Algeria in November 2006, we agreed
to give impetus to bilateral cooperation.
Everything is ready: an incentive and
securing legal framework, a strong
political will, the geographic proximity,
the economic potential of our two
countries, as well as the traditional
friendship between our peoples.
Algerians do not forget that your country was one of the first European countries to demonstrate an unequivocal
position at the time when Algeria was
going through a tragic situation in the
course of the last decade.
Already, our bilateral relations are
highly satisfactory in all sectors. They
stand out through a political dialogue
and cooperation in all circumstances as
well as through a quality economic,
technical and cultural cooperation
which excludes no domain. We are
delighted to note the evolution of our
bilateral cooperation, particularly since
2000.
Of course, there is still a vast field offered to its reinforcement and I think of
the huge possibilities which exist in
terms of investments in Algeria which
are not yet exploited to the utmost by
the Italian companies and particularly
the SME/SMI which make Italy
famous.
Partnership
This, naturally, is an objective which
we share totally and which we will pursue with all our Mediterranean partners
and, in particular, those with which we
have the most affinities, at the top of
which is, of course, Italy.
Algeria is Italy’s number one
supplier of gas. At what stage
is the Galsi pipeline construction project?
Algeria is indeed Italy’s number one
supplier of gas. The construction of the
second underwater pipeline, Galsi,
which will directly connect the two
countries, will further reinforce our
economic relations. The first step
towards the construction of this project
will be taken in Alghero with the signature of the related intergovernmental
agreement. This has already been finalised between the two parties.
This strategic work, which will be
added to the first Galsi Enrico-Mattei
pipeline, will be the second umbilical
cord which will connect our two countries and which will seal their community of fate.
In the last few months, numerous Algerian illegal immigrants have arrived in Italy, by
sea, particularly from the east
of your country. For you, Mr
President, what are the ingredients for solving the problem
of illegal immigration in the
EU countries but also in
Algeria, a country of transit,
origin but also destination of
illegal immigration?
Illegal immigration has become one of
the major concerns of the international
community. Whilst it is true that the
reasons for it are, obviously, known
and identified, the solutions envisaged
still fall short of the mark in terms of
responding to the complexity and the
sensitivity of a problem of multiple
dimensions.
The solution to this phenomenon cannot, naturally, benefit from an exclusively security treatment. The link to be
established between illegal immigration
and development seems obvious to me
and it is in all of our interests to work
together to give this link its full importance. The economic and social development constitutes, from this point of
view, the most relevant response to this
global phenomenon. But the results will
only be felt in a long term perspective.
In the immediate future, I feel it wise to
conjure the irrational perceptions of
this issue which sometimes lead to its
political instrumentalisation. It must
therefore be treated with serenity
through a healthy cooperation between
the States concerned whilst respecting
human dignity and the sovereignty of
all. This is what Algeria has undertaken
with a certain amount of success with
its African partners and what it plans to
pursue with its partners of the north
bank.
Two years after the approval
of the Charter for Peace and
National Reconciliation, what
report do you make, Mr
President, of the security
situation in Algeria? Does the
announced merger of the
GSPC with Al Qaida Maghreb
represent a risk of a return of
the violence of terrorism?
Allow me, first of all, to remind you
that the Charter for Peace and National
Reconciliation extends the initiative
that I launched in 1999 and which the
Algerian people adopted by referendum
in September of the same year.
This is a dynamic which aims, once and
for all, to go beyond the serious crisis
which the country experienced in the
1990s.
My initial objective was, before my
election, to stop the spilling of blood.
The results of the policy I have led
since are today visible, particularly with
regards the reduction of the terrorist
threat as well as the continuous improvement of the security situation with
what it has entailed as positive impacts
with regards society, the business climate and the return of investments.
Once again, I have to emphasise that
the national reconciliation, which is
today a reality, has looked after the victims, all the victims, of the national tragedy and that it remains a dynamic
process which cannot be confined to
statistical considerations but that it is
the responsibility of the Algerian people
to enhance it in order to escape the
spectre of discord once and for all.
The fact remains that the threat of a
resurgence of terrorism is always there
and it extends not only to the whole of
Maghreb, but in fact to the entire planet. This is the reason why our vigilance will not weaken, neither will our will
to combat this plague by all the means
available to us.
Less than a month away from
the next local elections, what
report do you make, Mr
President, of the situation in
Algeria? What do you foresee
after 2009? Is there someone
who you see as your future
successor who might take the
reigns of the country after
you?
The political reform process implemented in Algeria has led to the consolidation of the foundations of democracy
with the establishment of multipartism,
the reinforcement of the rule of law and
of good governance, of freedom of
expression and of the press and the
reinforcement of the democratic institutions at the local and national level,
thus enabling a larger involvement of
civil society in the management of
public affairs.
This participation is exercised on a daily
basis within the framework of democratically elected institutions where various
political lines are legally involved. It is
within this framework that the upcoming local elections are registered
which are, assuredly, an important
stage in the renewal of the elected institutions and contribute to the consolidation of what has been gained from the
democracy in our country.
For the remainder of your question,
you are trying to lead me into idle speculation. I will not go down that route,
but I will all the same stress how determined I am, under all circumstances, to
respect the sovereignty of the Algerian
people and all its means for democratic
expression.”
Energie & Mines
75
january 2008
PARTNERSHIP
Partnership
Algeria-Italy
Saïpem will construct the world’s
longest LPG pipeline in Algeria
The national hydrocarbons
company Sonatrach and
the Italian consortium
Saïpem-Snam Progetti
have signed, in Algiers, a
contract for the construction, in three years in
Algeria, of a liquefied
petroleum gas (LPG)
transportation pipeline of
more than 500km - the longest in the world.
The contract has been signed by the
head of transportation-by-pipeline in
Sonatrach,
Mr Hocine Chekired, and by the head
of transportation-by-pipeline in the
Italian consortium, Mr Nerio Capanna,
in the presence of the Minister of
Energy and Mines, Mr Chakib Khelil,
and of the Chairman & CEO of
Sonatrach, Mr Mohamed Meziane.
Baptised LZ2, this pipeline must
connect the Hassi R’mel gas field to the
Arzew petrochemical plant over a
length of 505km, i.e. the longest LPG
transportation network in the world,
according to Mr Chekired.
Costing 36.115 billion dinars (500
million dollars), the project includes a
24-inch pipeline, a pumping station at
Hassi R'mel, a pressure regulation post
at Sougueur (haret), a regulation and
metering terminal at Arzew and a
200km fibre-optic cable. It must be
constructed within a period of
36 months.
LZ2 will, through the two connection
lines, supply the Arzew LPG plants
(GP1Z and GP2Z).
The layout of this new pipeline has
been studied so as to avoid, as far as
possible, the agglomerations whilst
respecting the regulations in force in
terms of public health, safety and the
environment, according to Sonatrach.
LPG transportation in Algeria is currently done through the LZ1 transportation system built in 1973 by the same
Energie & Mines
76
january 2008
Saïpem. The acceptance of LZ2,
expected for 2009, will enable the LPG
transportation capacities to Arzew to
be increased from 9 to 15 million tonnes a year and the production capacity
will increase from 13 million
tonnes/year currently to 14 million
tonnes/year in 2010.
Mr
Meziane
emphasised
that
Sonatrach “attaches specific importance to the construction of this pipeline
with the quality and within the timeframes required and agreed to”.
If this strategic work is not completed
within the imposed timeframes, Algeria
shall suffer a lack of earnings of some
3.5 billion dollars a year equivalent to
the revenues expected from the exploitation and sale of this product, said an
executive of Sonatrach.
This project, added the head of
Sonatrach, “should respond to the
urgencies which accompany the expansion of the LPG chain and satisfy the
high technical and safety requirements
it comprises”.
Other than supplying the LPG plants to
the north of the country, this pipeline
will contribute to the overhauling of the
works and sections concerned by the
renovation, their replacement or their
upgrading and also ensure optimum
safety of the facilities and areas they
cross, he assured. The Minister of
Energy emphasised, for his part, “the
strategic importance” of this project
which is part of the vast programme of
the Energy sector related to the construction of a “reliable and performing
national energy infrastructure which
will reinforce the land development and
economic development recovery plans
of the country”, he added.
"The LZ2 project is an important
milestone of this programme”, he said.
The Chairman and CEO of Saïpem,
Mr Tullio Orsi, indicated, for his part,
that this project would constitute a
“challenge” both for his company and
for Sonatrach due to the complexity
and the requirement to construct it
within the required timeframes.
It should be pointed out that the
contract signed with Sonatrach also
provided for a training programme, in
Italy, for 80 Sonatrach engineers.
The Saïpem consortium, the world leader in the study and construction of
hydrocarbon pipelines, has recently
signed with Sonatrach another agreement related to the development of
crude oil processing plants in Hassi
Messaoud. It is also in competition for
the construction of the future Arzew
LNG plant.
Partnership
Algeria-Italy
Strengthening bilateral
cooperation
Two privatisation projects have been concluded with Italy (maritime navigation, ceramics) and a third is in the process of being concluded for the
purchase of two cement plants.
The Vice-President of the Italian
Employers Confederation (confindustria) and President of the Central
Council of SME, Mr Guiseppe
Morandini, ran a press conference at
the Italian embassy during which he
dealt with the bases of the bilateral
cooperation and the means of strengthening this in the light of the conclusions of the recent summit which was
held on 14 November last year in
Sardinia.
The speaker confirmed, to this end, the
commitments of the two governments
on strengthening the economic relations between the two countries likely
to change considerably, particularly in
the domains of the manufacturing
industries and the productive activities
in general, he indicated.
Mr Morandini, who visited our country
from 23 to 25 November last year
during which he met the Minister of
Industry
and
Participations,
Abdelhamid Temmar, the secretary
general of SME and Crafts,
Mr Lakhdar Guenoun, and the president of the Employer Forum des chefs
d’entreprise, Mr Réda Hamiani, stated,
in the same context, that the five
groups of Italian companies have
shown their interest in the Algerian
market within the Confindustria.
On another aspect, he stated that six
privatisation projects have already been
the subject of discussions with the
Algerian party, particularly in the construction, glass industry and mechanical
sectors specifying that 3 projects have
actually been started, 2 finalised, in the
domains of ceramics and maritime
transport, whereas the third project in
progress concerns the purchase of two
cement plants.
As a reminder, 12 privatisation projects
were in negotiation with the depart-
ment of Temmar in the gas and public
works sector particularly for a total
amount evaluated at 120 million euros.
Furthermore, the amount of the Italian
investments made in our country is 300
million euros.
The speaker, who talked about his
country’s interest in the development of
SME, with 98% of Italy’s industrial
fabric being comprised of small and
medium size industries, did however
emphasise the obstacles in the way of
the initiative to invest in Algeria.
He mentioned three difficulties, namely the complexity of the start-up procedures, the lack of adaptation of the
banking system at an economic pace
and the lack of qualified training for the
work force. Italy, which has been able
to incorporate itself in the dynamic of
the competition which the Algerian
market is experiencing, is present in
our country through more than 125
companies listed in 2007.
Hence, the partnership with Algeria is
not limited since it is multi-sectoral and
is dedicated in the domains of textiles,
construction, food and of course energy which has the lion’s share in the
trade between the two countries.
Confindustria hence intends to seize
the opportunities within the framework
of the privatisation process to strengthen its position on the Algerian market. According to the representatives of
the Italian Employers Confederation,
the incentive advantages enable a corporate recovery or the launch of new
investments, with the infrastructures
required being available. The geographic position of the two countries, a
less expensive workforce and affordable energy costs are other parameters
which encourage the Italian employers
to come to invest in Algeria.
Energie & Mines
77
january 2008
PARTNERSHIP
Partnership
Algeria-Spain : Chakib Khelil in Aïn Témouchent
“Medgaz is an important
project for Algeria and the
European Union”
More than 10 billion
dollars for the Algerian
petrochemical industry
in 2008
The Medgaz project,
which will be completed
in July 2009, is “not only
important for Algeria, but
also for the European
Union”, stated, in Aïn
Témouchent, the Minister
of Energy and Mines, Mr
Chakib Khelil, during his
inspection visit to this
project’s construction
sites.
The Minister recalled, in a press meeting, the advantages of this gas project
which will enable Algeria to export 8
billion cubic metres of gas/year as of
July 2009 and guarantee the security
of supply of the countries of the
European Union. “In return, the
Algerian State will draw in annual
revenues of around 1.5 to 2 billion
dollars”, he specified.
Medgaz, which will connect the
Algerian city of Béni Saf and the
Spanish city of Almeria, is the third
Algerian gas pipeline which will serve
the European gas market, and also be
used to develop the local economy by
supplying energy to the aluminium
and fertiliser factories planned in the
neighbouring industrial zone and the
new Terga electric power plant, further to the east. “This entire region
will be teeming with projects which
will create thousands of temporary
and permanent jobs”, added the
Minister. The two companies, the
Franco-Spanish group Technicas
Reunidas Amec, in charge of the
construction of the compression station and of the Almeria plant, and the
Algerian group Cosider TBS for the
construction of the Algerian-side station, as well as the placement of the
Hassi R’mel pipeline in Béni Saf, are
Energie & Mines
78
january 2008
within the timeframes and will be
completed in time, further emphasised Mr Chakib Khelil. “The Algerian
part of the project will be finished very
soon whereas the works of the compression station are going to start.
The latter will propel high pressure
gas into the pipelines placed 2,160m
deep in the sea - a world record”,
emphasised Mr Chakib Khelil. The
Medgaz project, of a total cost of 900
million euros, will be the third
Algerian pipeline which will supply the
European market with gas, after the
Maghreb-Europe
gas
pipeline
(GME), which crosses Morocco and
supplies the Spanish and Portuguese
markets, and the Transmed which
supplies Algerian gas to Europe via
Tunisia, he recalled.
The Minister of Energy and Mines,
Mr Chakib Khelil, announced in Aïn
Témouchent, still on the fringes of his visit
to the Medgaz project’s construction sites,
that “in 2008, Algeria will invest more than
10 billion dollars in the petrochemical industry”. “We are going to grant several petrochemical projects, including the Skikda and
Ghassi Touil liquefaction plants which will
be built in the next few years, stated the
Minister on the site of the compression station of the Medgaz gas project. With
regards mines, the Minister “hoped, next
year, to be able to inaugurate the TirekAmesmessa mine” which might produce
3 tonnes of gold a year. In the future Aïn
Témouchent industrial zone, which will
cover 6,400ha, Mr Chakib Khelil indicated
that the aluminium project is currently in its
final phase and that its construction might
start next year with its 2,000MW electric
power plant, and a fertiliser project (ammoniac and by-products).
With regards the risks of marine pollution
which the emissions of brine or the industries planned in the region might engender,
the Minister stated that the aluminium plant
or the desalination station will not have any
environmental impact. Beforehand, he had
announced that the Medgaz project will be
inaugurated in July 2009, with a production
of 8 billion cubic metres/year designed for
the European gas market, it is recalled.
Partnership
Medgaz shareholders
Suspension
of the conditions
for increasing
Sonatrach’s capital
On 30 January 2007, Sonatrach filed
with the National Energy Commission
(CNE), the regulator of the Energy sector in Spain, a request for the granting
of an administrative authorisation for
the increase in shares of the capital of
the company Medgaz.
This request was made further to the withdrawal of Total and BP from the company
Medgaz, as the latter did not obtain a
contract to supply gas through the future
pipeline. The accumulated share of the two
companies, i.e. 16%, was therefore returned to Sonatrach. On 8 May 2007, the
CNE published a document related to its
decision to stipulate conditions for increasing Sonatrach's voting rights, corresponding to its additional 16% stake in the company Medgaz and to a set of measures
granting the CNE a right to review all the
decisions taken within Medgaz. The CNE
had stated that, by increasing its stake in
the capital of Medgaz, Sonatrach would
have a significant influence both as a shareholder and as a member of the board.
The conditions imposed aimed, then, to
make the voting rights corresponding to
Sonatrach's additional stake inoperative.
Sonatrach then filed recourse with the
regulator, at the start of June 2008, in order
to cancel these restricting conditions.
Sonatrach also obtained the support of its
four partners (Cepsa, Iberdrola, Gaz de
France and Endesa) within the company of
Spanish law Medgaz, responsible for the
construction of the Algerian-Spanish underwater gas pipeline. Indeed, the company
Medgaz, in turn, filed recourse with the
Spanish Ministry of Industry against the
conditions imposed by the National Energy
Commission (CNE).
On 19 July 2007, the Ministry of Industry
issued a resolution which revokes the
conditions imposed by the CNE.
In Market News
Chakib Khelil in an interview with
the Spanish agency EFE
“Repsol and Gaz Natural has
not been able to manage and
run the Gassi Touil project”
The Minister of Energy and Mines granted an interview to the Spanish
press agency EFE on the fringes of the Summit of the Heads of State of
the member countries of OPEC which took place in Riyadh. In this interview, Mr Chakib Khelil indicated that Repsol and Gaz Natural, the two
Spanish companies, have not been able to manage and run the Gassi
Touil project whose construction they had taken responsibility for.
To this end, the Minister justified the eminently commercial arguments
which prevailed in the termination of the contract by Sonatrach. "We
have signed several contracts with foreign companies for the sale of gas
after the completion of this project", particularly indicated the head of
Algerian energy. He also specified that this commercial conflict will have
no impact on the economic relations with Spain. "If we have made the
decision to use a partner, it is to accelerate the completion of this project
and not to delay it.” And this is just what the two Spanish companies
have done. Hence, Sonatrach has decided to take the project in hand
with a lot of delays. This project, decided on five years ago and which
saw the entry into partnership of the two Spanish companies, should
have been completed in 2009, but the delay acknowledged by the two
parties has meant that the Algerian company has had to review its cards
and terminate the contract after several summons.
Better, the use of an international commercial court was deemed necessary for Sonatrach in the sense that it has lost a lot of money in this matter. This was not to the liking of Repsol and Gaz Natural which also solicited the same court. The Spanish companies are claiming the trifle of
300 million euros in damages, feeling that they have been wronged by
the unilateral termination of the contract. It should be pointed out that the
Gassi Touil project is the largest ever contracted by the two Spanish
companies in North Africa. This, according to the Spanish daily newspaper Expansion, it is around 7,000 million dollars. The termination of the
contract has, we should remind you, been over-politicised by the now expartners of Sonatrach, going as far as to activate the Iberian right wing
press which has launched itself into a campaign against the Spanish
State on Western Sahara. It required Moratinos, the Spanish Minister of
Foreign Affairs, to confirm that the problem is commercial for the Iberian
newspapers to tone down their reports.
Energie & Mines
79
january 2008
PARTNERSHIP
Partnership
Miguel Angel Moratinos, Spanish Minister of Foreign Affairs
“Spain and Algeria: two links
of an energy chain between Europe
and Africa”
“The future of Algeria and Spain requires an even more ambitious strategic
partnership in terms of energy”.
Based at Plaza de la Provincia, in the
centre of old Madrid, the Santa Cruz
Palace, the former headquarters of the
Ministry of Foreign Affairs, continues
to be used, from time to time, as a meeting place for the Minister. Our meeting took place in this place loaded with
history. A pure product of Spanish
diplomacy, Miguel Angel Moratinos,
Minister of Foreign Affairs since 18
April 2004, is an unrivalled connoisseur of Arab, Maghreb and Middle East
issues. His tropism, supported by real
expertise, has never wavered. Indeed to
the contrary. Since he has been the
head of Spanish diplomacy, he has
resolutely registered his country in a
consistency, which does not however
prevent multi-polarity, with essential
geostrategic orientations such as, for
example, the Mediterranean or
Maghreb. During this exclusive interview, Miguel Angel Moratinos deals
with numerous current subjects, particularly the relations with Algeria.
Le Quotidien d’Oran : Since
you have been the head of the
Ministry of Foreign Affairs,
you have put in place, inter
alia, a real “Arab policy” for
Spain. What explains this strategic decision of Spanish
diplomacy?
Miguel Angel Moratinos : For us,
this is an Arab policy which is part of a
Mediterranean policy. We do not forget
the other players in the region. It is a
more overall view which indicates and
determines that the Mediterranean
Basin must have a priority in Spain’s
and the European Union’s strategy. I
Energie & Mines
80
january 2008
Let’s stay on this bilateral relationship of Spain with the
countries of the South bank.
Spanish companies are
increasingly relocating to
Maghreb, making this region
its “strategic depth”. Could
you give us an idea of the
nature of these exchanges?
believe that what has been missing for
many years is a strategic commitment
from the EU with regards the countries
of the south of the Mediterranean. We
have not been able to respond to the
strategic changes that have arisen since
the fall of the Berlin Wall. Of course,
we have been able to restore the geography and history of the EU through
the adhesion of new members from
Central and Eastern Europe. But, we
have not succeeded in having a new
strategy with regards the countries of
the South. This is why we tried to pick
up the momentum started in 1995 by
organising the Euro-Mediterranean
Summit in Barcelona, in 2005. With
this in mind, we are ready to work to
give new impetus through the French
President’s Mediterranean Union
initiative.
The Maghreb countries are our priority
focus. I don’t have specific figures in my
head but, for example, talking about
Tunisia, which is the furthest country
from Spain, we have tripled the number
of Spanish companies. During my last
visit to this country, President Ben Ali
congratulated me on this. In this perspective, our economic and financial
presence in Algeria and in Morocco is
extraordinary!
This is normal – we work as partners!
We have agreements of good neighbourhood, friendship and cooperation with
all Maghreb countries. In this context, it
is normal for the Spanish economy and
businessmen to get involved for the
social and economic development of
North Africa. Whether in Morocco,
Algeria or Tunisia, we have achieved
very high numbers in terms of trade.
Your "strategic partnership"
with Algeria was recently criticised with the commercial
dispute between Sonatrach
and the companies Repsol
and Gaz Natural. Where does
this stand? And how do you
politically analyse this affair?
No, not criticised! We have already
constructed the Medgaz which is a
Partnership
direct connection between Algeria and
Spain. So, how can we then talk about
or imagine an energy crisis between
Spain and Algeria at a time when we
have taken the strategic bet of being
united not only by a gas pipeline. Spain
is 40% - and perhaps 60% in the future - dependent in terms of Algeria’s
energy. That there is a problem between companies does not mean that we
are in a crisis! The two countries have
never achieved such high trade and
investment capacities as those of today.
It is normal for there to be problems
when the relations are so intense.
tion to the problem of Western Sahara.
I believe that the time has come for the
efforts of the two parties, under the
auspices of the UN, to lead to results.
We encourage them to negotiate and
find a solution, which must rely on the
resulting principles and rights and on
international legality. Today, there is a
new approach. Two rounds of negotiation have already taken place; there will
be a third one in November. And this
time we hope to make some progress.
We can no longer continue to be inert
give a situation of blocking inside
Maghreb. Because this must not stop
the Maghreb integration.
Meaning…
We are constantly in touch with each
other and our dialogue is solid. We will
try to help the two parties find an amicable solution. We are convinced that
the future of Algeria and Spain requires
an even more ambitious strategic partnership in terms of energy. In this
context, we also have to consider the
future Sub-Saharan gas pipeline. Spain
and Algeria are two links of an energy
chain which will unite Europe and
Africa. At a time when many countries
were looking towards the east (Russia)
and looking for other supply sources
and when no one invested in Algeria,
we were there and we still are!
However, we need to discuss and resolve the small incidents which might arise
here and there.
As seen, Spain is not indifferent to its neighbours of the
South. Regionally, there is a
dispute which is blocking
Maghreb integration – the matter of Western Sahara. To get
out of the current blocking,
could Spain play a role of facilitator in this matter?
We have already played a role! The former personal representative of Kofi
Anna, former Secretary General of the
UN, had resigned. We found ourselves
at a given time in total deadlock. There
was a need to convince the two parties,
to commit the United Nations, to
convince the Secretary General for the
appointment of a new personal representative. In all of this, Spain was in the
forefront, looking for an ultimate solu-
Today, the Euro Med is the
subject of numerous criticisms. Disillusions, disappointments, dissatisfactions…
these are the words which are
mentioned the most. In your
opinion, do we need to go
towards a "Barcelona plus"?
And what are the new avenues
that should be favoured?
It is always healthy when there are criticisms. It forces us to take initiatives.
Consequently, if there are no criticisms
this does not mean that nothing is happening. When we launched this initiative, we had reached the conclusion,
after long discussions, that a process
had to be initiated. I stress the word
process. This, in fact, enables us to
mature our approach as we make progress in order to solve the different
issues which are present within the
Euro Med region. However, the time
has come today to make progress and
move towards a “Barcelona plus”.
What does this mean exactly?
We need a lot of institutions to be put
in place for this to work more systematically, and to reflect the partnership
more. Things should not be decided on
solely in Brussels. Of course, the Euro
Med committee works well, but this is
not enough. The same applies for the
annual ministerial meeting of the
Ministers of Foreign Affairs. Today,
you have to go towards more common
institutions, common projects and
commitments. It is in this perspective
that President Nicolas Sarkozy’s initiative is based.
You are one of the very first to
have reacted to this idea by
publishing an article in the
newspaper El Pais, indicating
that we need to move further
still in the content of this project…
I think that we always need to be more
ambitious. The positive element of this
approach is that France comes back to
the Mediterranean with a strong initiative. It has to be supported to succeed
in its objectives.
But today, apart from the notice effect, it is an empty shell.
Do you have specific ideas on
this subject?
We are in the process of working together with our Italian and French
friends. We also have informal discussions because we do not want to disagree with our French friends.
Consequently, we need to avoid imposing a ready-made model. The initiative must be structured together. From
this point of view, the French President
has already presented his ideas; we
have decided to establish intense collaboration efforts with our Italian friends
and the partners of the South.
We are in the process of maturing our
reflections in order to see what we can
present.
During his State Visit to
Morocco, President Nicolas
Sarkozy specified a certain
number of things on the
Mediterranean Union. He
expressed his preference to
move towards concrete projects for the region. But we
still have not understood the
structuring of this union compared to what already exists.
What is your point of view in
this respect?
We need a more Mediterranean regional area. We hail the French proposal.
Let’s not forget that the European
Economic Community started with the
large projects. We have already talked
with our French friends who are completely in agreement with carrying our ☞
Energie & Mines
81
january 2008
PARTNERSHIP
Partnership
☞ concrete
strategic projects, such as
security, immigration, the environment, culture and the dialogue of civilisations. This has made a lot of progress. All these subjects are important.
How would this Mediterranean
Union be financed? And from
where will the money come?
There is quite a lot of financing, but we
also need the private sector’s contribution. When the project is good, we find
the money. There are already Italian
and Spanish initiatives in terms of private and public investment agencies.
We also have the FEMIP and the
European Investment Bank (EIB).
We are not lacking financial instruments. What is important is to have a
clear project and political will. Do the
Mediterranean countries wish to participate in a large geopolitical area or
not? For us, this is obvious and it must
be done. We have the opportunity of
having a more active and more committed France. Let’s make the most of
this idea. We want to remain ambitious
in our Mediterranean policy.
This is a French initiative. How
do you position yourself as
Spanish?
Everything
which
affects
the
Mediterranean and enables us to make
progress in the cooperation and the
pursuit of solutions to real problems
which affect us is positive. Our major
concern is summarised in this question: what do we have to do for it to be
efficient? So, we need a Mediterranean
structure which can be, later on, transferred to or incorporated in the Euro
Med process, a “Barcelona plus”. We
have to start working between
Mediterraneans; we also have to think
of the strategic stakes which affect not
only the European countries of the
Mediterranean but also all the countries of this region.
For the opinion of the countries of the South, the Euro
Med is a far-off process and
has no reality for the peoples
of this region. How do we
Energie & Mines
82
january 2008
ensure that the latter are
more associated with this
ambitious idea?
The Barcelona process has spoken a lot
about peoples. Only the public opinions
have not been well informed. The
Euro-Mediterranean free trade area
implies the economy and the welfare of
the citizens of the South. When we do
university exchange programmes to
enable students to go on courses in
Arab, Muslim, Spanish or Italian universities, this also affects the peoples.
Not to mention the cultural programmes. But, obviously, it needs to be done
more politically.
It is true that, for us, this was a disappointment! Spain will have the presidency of the European Union in 2010;
we have a new possibility of re-launching and laying out a real EuroMediterranean structure which would
have a parliament, a commission, etc.
There are a lot of things to be done!
Your experience and your
expertise of the realities of
the Middle East enable you to
understand its complexity. In
your opinion, what are the
conditions for the new peace
negotiations between
Palestinians and Israelis to be
able to be unlocked despite
the different points of view?
We have a new opportunity for peace.
Both parties must understand that this
opportunity must not be missed to
make peace. I believe that everyone is
aware of the importance of this new
expiry date which is presented. Our
American friends have also understood
that this is a great opportunity. We have
to support them. The time has come for
this vision of two States – Israel and
Palestine living in safety and peace – to
become a reality. We have to immediately establish the great outline of the
Palestinian State so that this can assume its new responsibilities. All this
must be achieved with the help of the
international community.
But how will the Europeans be
associated with this initiative?
They are already associated. Messrs
Blair and Solana represent the EU. All
the countries of the Mediterranean
Basin are in touch with the players on a
daily basis. In this sense, we have to let
the two parties negotiate the terms of
reference of the future conference,
encourage them and stimulate them so
that they assume their political responsibilities during this historic meeting.
All those who know the region
and follow the ups and downs
of the Iranian nuclear issue
ascertain that all the elements of a military strike
against Iran are met. Doesn’t
this risk messing up everything and throwing this part of
the world into a new chaos?
This worry exists, but there is also the
certainty that everything has to be done
to avoid the military option. I believe
that everyone agrees on the need for
firmness in relation to Iranians so that
they provide guarantees and assurances
which comply with the resolutions of
the UN Security Council and the
International Atomic Energy Agency
(IAEA) in Vienna.
From this, we have to stop any possibility of military escalation in order to
find a diplomatic and peaceful solution
by talking together in depth.
Consequently, we have to focus on the
diplomatic option.
In Le Quotidien d’Oran
on 5 décembre 2007
Partnership
Algeria-Spain
The Sonatrach-EDP strategic
partnership enters into force
■
Sonatrach will supply 1.6 billion cubic metres of natural gas a year to EDP
designed for three projects in Spain and in Portugal.
■ This partnership thus confirms Sonatrach’s contribution to the securing
of the energy supplies of Europe, in general, and that of the Iberian region,
in particular.
In accordance with the provisions of
the Memorandum of Understanding
(MoU) signed on 11 April 2007,
Sonatrach and the Portuguese energy
group Energias de Portugal (EDP SA)
signed, on 31 October 2007, agreements to put in place the strategic partnership covering the domains of natural gas and electricity in the Iberian
Peninsula.
To this end, the agreements in question
relate to the natural gas supply by
Sonatrach to EDP, on a long term
basis, covering an annual contractual
quantity of 1.6 billion cubic
metres/year, most of which will be
designed for three combined cycle
gas/turbine (CCGT) electric power
plants in Spain and in Portugal, in
which Sonatrach will have a 25% stake.
The CCGT projects planned within the
framework of this partnership concern
the following three plants under construction:
■ Soto 4, based in Asturies, Spain, of a
capacity of 425MW whose commissioning is expected in August 2008.
■ Lares 1, based in Figueira da Foz,
Portugal, of a capacity of 440MW
whose commissioning is expected in
July 2009.
■ Lares 2, based in Figueira da Foz,
Portugal, of a capacity of 440MW
whose commissioning is expected in
August 2009.
Hence, in accordance with the MoU of
11 April 2007, the signature of these
agreements ratifies Sonatrach’s stake,
permanently,
in
the
General
Supervisory Board of EDR which, as a
reminder, is the highest strategic body
of the Portuguese group.
For Sonatrach, this strategic partnership falls within the framework of the
formalisation of its objective to export
85 billion cubic metres/year of natural
gas by 2010 and of its strategy to
consolidate its position on the Iberian
gas market and its involvement in the
gas downstream, particularly through
the participation in the electricity production.
This partnership thus confirms
Sonatrach’s contribution to the securing of the energy supplies of Europe,
in general, and that of the Iberian
region, in particular.
Energie & Mines
83
january 2008
PARTNERSHIP
Partnership
First visit to Algeria of the President
of the Federal German Republic
Mr Kohler : “Algeria is on
the right track, that of openness
and reforms”
“Germany expresses its desire to support Algeria within the framework
of the EU, for its development.”
The President of the Federal German
Republic, Mr Horst Kohler, expressed
in Algiers his country’s desire to support Algeria, within the framework of
the European Union (EU), to “continue its economic and social development and its journey towards modernity”. “Within the framework of the EU,
we want Algeria to obtain the support it
deserves to continue the economic and
social development process that it has
started and to continue its journey
towards modernity”, stated Mr Kohler
to the press.
Germany “has a huge interest for this
great and important country that is
Algeria and which is undergoing development in peace and stability”, he
added, at the end of his meeting with
the President of the Republic, Mr
Abdelaziz Bouteflika. Algeria “is on the
right track, that of openness and
reforms and with the participation of
young people, and Germany is ready to
support it on this track”, he stated.
He assured that he “agreed with
President Bouteflika when he said that
Europe could demonstrate a bit more
dynamism in its relations with the
Mediterranean countries”.
“We also agree on the fact that the
Barcelona process is, certainly, a good
thing, but it is still far from having
exhausted all the possibilities offered in
the domain” of cooperation, he said.
Germany, “which is only three hours
away in the plane away from here,
wants to be a good neighbour of
Algeria”, he emphasised.
Mr Kohler, on the other hand, expressed his joy of coming to Algeria to
make a State visit and “meet with my
Energie & Mines
84
january 2008
friend President Bouteflika with whom
I have already had very friendly discussions”. “Here I have noted the hospitality and frankness of a friend and all
this makes me optimistic for all the
issues we have to cover in Germany, in
Algeria and in Europe. In this climate
of trust and openness, bilateral cooperation has a good basis on which we
can build”, he assured.
With regards his talks with President
Bouteflika, Mr Kohler said that they
“particularly related to Algeria’s future”. “My assessment, as that of
President Bouteflika, is that Algeria is
not only rich in terms of raw materials,
but also because of its youth, its ambitions and its expectations for the future. Areas of cooperation are opening up
between our two countries in training
and education and also in transportation”, he assured.
“We also talked about strengthening
our trade and I agree with President
Bouteflika when he says that the current volume of our trade, evaluated at
2 billion euros, is not sufficient and
does not correspond to the potentials
which our two countries have”, he also
revealed.
“We want to identify the areas in which
we can strengthen our trade and work
to wake up the interest of German
investors to come here to Algeria and
contribute to the diversification of the
Algerian economy which is required to
create jobs and offer a professional outlook to young Algerians”, he noted.
Partnership
Mr Kohler also felt that “the
agreement which has just been
signed on the non-double taxation between Algeria and
Germany is an important
contribution
to
develop
German
investments
in
Algeria”.
The German President also
confirmed that his country “has
followed with sympathy” the
development of the situation in
Algeria “since its freedom fight
and also during the years of violence”.
He indicated that President
Bouteflika and he himself
“agreed on the fact that terrorism and violence are not means
(of expression) in the political
debate”, stating that the
Algerian President enjoyed the
admiration of Germany “for his
reconciliation initiative in
Algeria”. He further said he was
“happy to hear President
Bouteflika express his confidence in Germany after its reunification and his desire to see
Berlin play a more important
role on the international scene”.
Mr Kohler also assured that he
had participated “willingly in
the Forum for Africa’s development, within the framework of
the cooperation between the
industrialised countries and
Africa, and because President
Bouteflika is one of the initiators
of
Nepad”
(New
Partnership
for
Africa’s
Development).
He also congratulated the fact
that “the reform efforts in
Algeria are extended over the
continent, particularly in subSaharan Africa”. “It’s a good
think that everyone is assuming
their responsibilities, particularly in the domain of good governance, as it is on this basis that
the credibility and legitimacy
are built in order to claim support”, he felt.
The time for realism
Outside the Nepad meeting, it is important to place the visit
of the President of the German Republic in the bilateral framework. Initially, it should be emphasised that this is the first
time that a German Head of State is making an official visit
to Algeria. This visit is of an undeniable political nature, particularly in the current economic climate.
F
irst of all, it illustrates better
than all the discussions the
exception cachet of bilateral
cooperation. Since Algeria’s
accession to national sovereignty, bilateral cooperation has always followed a
national tendency towards enhancement
and improvement.
Trade has been continuous even if there
is a potential to be explored and therefore to be developed. But, above all, the
economic relations have always been
characterised by good performance.
Since 1962, German companies have
been present in Algeria. More than this,
Germans have contributed to the realisation of several large-scale projects, particularly during the period of the industrialisation policy after independence.
At this time, and despite the cold war
ambiance, Germany played its role by
facilitating the transfer of technology and
know-how. Algeria owes it a few industrial accomplishments of great importance such as, for example, the Aïn Smara
tractor manufacturing plant. It can therefore be put forward, in full peace of
mind, that trust, mutual respect and a
more equitable perception of the interests
have prevailed in the design and implementation of bilateral cooperation.
Today, these same principles persist and
everything leads us to believe that the
future will be more promising still.
Indeed, Algeria’s development project
opens up more attractive prospects as its
potential is an undisputed reality. Other
than the infrastructure development programmes which mobilise some 150
billion dollars, Algeria aspires to develop
its economy to overcome its dependency
on hydrocarbons.
The opening up of the national economy,
as globalisation requires, but also the
other opportunities in the industry’s sector, with the implementation of the
industrial, agricultural and tourism strategy open up an entire panoply to
German investors.
The latter have a considerable advantage
insofar as they know Algeria already.
On another aspect, Germany is the pivotal country of the EU. Algeria has dense
and intense relations with this region.
The partnership agreement with the EU
is an asset for our country, provided that
the EU can help it to upgrade its economy. In this respect, Germany can contribute to it, especially given that, on the
issues of the hour, its positions merit
interest and particularly reflect a completely appreciable “realpolitik”.
In a few weeks time, it will be the turn of
the French President to visit our country
with, in his agenda, the Mediterranean
Union, an ambitious project but whose
outlines deserve being specified.
As ascertained, Algeria is arousing the
interest of all the important countries of
the EU. This proves, quite simply, that it
has appreciable assets but particularly
that it has become a force to be reckoned
with in the Mediterranean Basin. This is
a given.
It is also the faithful reflection of the
Algerian potential but, above all, of
Algeria’s desire to contribute to the
emergence of a region of peace, security,
friendship and development where trust,
mutual respect and the banishment of
any politician policy will predominate.
Energie & Mines
85
january 2008
PARTNERSHIP
Partnership
Algeria-Germany
Energy security and climate
change, a challenge for
Germany and Algeria
The Algerian-German Chamber of Commerce and Industry organised, in
Algiers, a conference-discussion on the theme “Energy security and climate
change, a challenge for Germany and Algeria”.
The President of the Federal Republic
of Germany, Mr Horst Kohler, the
head of the government, Mr Abdelaziz
Belkhadem, members of the government and Algerian and German businessmen took part in this conference.
The protection of the environment and,
in particular, the fight against climate
change, is a necessity which we should
all - political and economic representatives as well as civil society – “take particularly to heart”, felt members of the
chamber. It is in this context that the
German President stated during his
speech that the energy requirement has
reached a “new dimension due to the
strong growth of the emerging countries”.
He emphasised that the energy supply
is not only important for the industrialised countries, but also developing and
emerging countries in order, he said, to
“be able to advance in growth and thus
create jobs”.
Mr Kohler did however state that “if we
want to curb somewhat the costs of climate change, our objective must
consist of halving CO2 emissions, on
the global scale, by the end of the first
half of our century”. On this subject,
the German President told those present that the subject of energy is related
to a second crucial issue, namely climate change, “caused by man’s own
hand”, feeling that these consequences
“concern us all, whether or not we
want it and whether or not we are
aware of the fact that it is a problem”.
“Climate change has progressed and
the public is becoming increasingly
aware of it in the industrialised countries”, he emphasised, recalling the
Energie & Mines
86
january 2008
appeal launched by the Nobel Peace
prizes as to the urgency of acting. “The
longer we wait, the greater the repercussions of climate change to be financed”, insisted the German President.
Mentioning Algeria, Mr Kohler stated
that this country, with its huge gas and
oil reserves and the strong increase in
the prices of the latter, has transformed
into a great beneficiary for exporting.
However, he was questioned, amongst
others, on the means of using its revenues for sustainable development and
on the repercussions for the economic
development and on the partners with
which we can cooperate in the long
term with trust. “Trust plays a crucial
role in the question of knowing whe-
ther we can manage to shape globalisation to the benefit of everyone”, he stated, feeling that Algeria can play an
important role in this context both in
the demonstration of the good use of
these revenues, and with regards the
signal it sends other African countries.
It should be noted that this event,
mainly designed for the economic
players of the renewable energy
domain, and more particularly solar
energy, must be used as a platform for
professional meetings between the
players of each of the two countries in
view of evaluating the different possibilities of cooperation.
Partnership
Algeria-Germany
Signature of a non-double
taxation agreement
Algeria and Germany have signed, in
Algiers, a non-double taxation agreement to encourage German investments in Algeria, particularly in the
industrial domain.
The signature of the agreement took
place at the office of the President of
the Republic, Mr Abdelaziz Bouteflika,
and his German counterpart Mr Horst
Kohler. The Ministers of Foreign
Affairs, Mr Mourad Medelci, Finance,
Mr Karim Djoudi, and Industry and
the Promotion of Investments, Mr
Abdelhamid Temmar, attended this
ceremony, for the Algeria side. On the
German side, the Secretary of State for
Foreign
Affairs,
Mr
Georg
Boomgaarden, and the Secretary of
State, Head of the President’s Office,
Mr Gert Hotler, were present.
"We are very happy with the signature
of this agreement which will facilitate
the activities of German investors in
Algeria, by reducing the bureaucracy”,
stated to the press Mr Boomgaarden.
"We will work together to strengthen
our bilateral trade relations further", he
added, emphasising that German
industry "can make a considerable
contribution regarding the diversification of the Algerian economy".
For his part, Mr Medelci indicated that
“this very important agreement completes the legal framework of AlgerianGerman cooperation which has already
enabled the relations between the two
countries to make progress in the economic domain and will certainly give a
new boost to German investments in
Algeria”.
An electric cable project connecting
Algeria to Germany being
looked into
The company New Energy Algeria (Neal) intends to launch
the project for the construction of a 3,000km long electric
cable which will connect Adrar to the German city of Aachen,
announced the managing director of this company,
Mr Toufik Hasni, during an Algerian-German press conference on the theme of “Energy security and environmental
protection”.
The layout of this mega-project should pass through
Sardinia, the north of Italy, Switzerland and finally Germany
announced Mr Hasni during this conference in which the
President of the Federal Republic of Germany, Mr Horst
Kohler, and the head of the government, Mr Abdelaziz
Belkhadem, participated.
According to the explanations given by Mr Hasni, this is the
first project of this size which will content the African continent to Europe, through a solar electricity network which will
cross the Mediterranean. “The impact of the Adrar-Aachen
cable consists of the diversification of the electric energy
resources”, indicated the head of Neal.
According to estimates made by the German Space Agency,
this project requires a budget which may reach up to 2 billion
euros, and between 12 and 18 billion euros for the construction of solar power plants which will be installed in the
Algerian South and may produce 6,000 megawatts of electric
energy. The formalisation of the “Adrar-Aachen” project is
awaiting the agreement of the political leaders of the two
countries and the involvement of the consortium of investors
that will buy the solar electricity, including Sonatrach and
several German companies, added the MD of Neal.
Furthermore, the German Minister of the Economy and
Technology lingered on the new and renewable energies in
Germany and the Algerian-German cooperation in this
domain.
“Our country is a leader in the domain of environmental
technologies on an initiative to export solar energy; this is a
favourite domain for us - we have great ambitions to share
our experience with our Algerian partners”, she indicated.
The President of the Algerian-German Chamber,
Mr Andreas Hergenrother, for his part emphasised “the evergrowing presence of German economic operators in Algeria
and particularly in the water management and treatment
domain, particularly in the south of the country”.
The partnership between the public and private companies
was also covered during this meeting.
In this sense, Mr Mohamed Fechkar, President of the
Algerian-German Chamber of Commerce and Industry,
explained the technical solutions provided by German companies in terms of treating industrial waste and recycling flared gases in the oil deposits.
Energie & Mines
87
january 2008
PARTNERSHIP
Partnership
Algeria-European Union
Mr Medelci in Brussels : “Algeria
ready for a strategic partnership
with Europe”
The one-day visit to Brussels of the Algerian Minister of Foreign Affairs,
Mr Mourad Medelci, has enabled the economic and human problems which
the implementation of the association agreement, in force for two years now,
is clashing with, to be smoothed out. Three major topics were proposed during
meetings held with the European Commissioner for Foreign Affairs, Mrs Benita
Ferrero-Waldner and the Vice President of the Commission of Justice,
Freedom and Security, Mr Franco Frattini.
This relates to the early start of negotiations on the deregulation of services,
a chapter which should only have started after Algeria’s membership to the
World Trade Organisation (WTO). But
the importance of this sector in world
economic cooperation and the concern
for boosting the EU commitments to
support Algeria’s membership to the
WTO have dictated the need to resume
talks with the EU on this matter.
Indeed, the EU, on its own initiative,
had committed in its speeches, at least,
to support Algeria’s membership to the
WTO, but this commitment has not
been followed through. Hence the
Minister was keen to remind the EU of
its promises and asked for more concrete, more substantial and more effective support.
The commission’s officials have
demonstrated a very clear will to support Algeria in this process and have
promised to dispatch to Algiers a mission of experts in the coming weeks to
“clear the way for and start in serenity”
the opening of the service chapter and
support to WTO membership.
The second major topic dealt with
energy cooperation - an extremely sensitive subject to the EU, in terms of
security of hydrocarbon supplies and
nuclear energy. On this matter, both
parties showed more than ever a
convergence of interest, according to
the terms of Mr Medelci.
During the visit of the Minister of
Energy and Mines to Brussels, last July,
Energie & Mines
88
january 2008
This presence, for
a company such as
Sonatrach, implies
that there is an honest
agreement with the
EU which enables it
to invest in the EU in
the same way as its
European counterparts, in the name
of reciprocity.
the condition called the final destination “clause” was abandoned by Algeria
in exchange, awaited and not yet
concluded, for the opening up of the
European market to Sonatrach.
This traditional clause made it an obligation for Algerian gas importers not to
sell this product to a third party or, at a
pinch, to share the additional profits
which would result from this sale. In
consideration of which, the EU committed to open up the European market
to Sonatrach so that it can sell its gas
there.
Furthermore, the European bill, which
will prevent, if adopted, companies
whose majority shareholder is a single
Partnership
owner, even a State (as is the case of
Sonatrach), from being an exporter, a
transporter and also a distributor in the
EU, would not concern Algeria.
As according to the assurances given by
the European Commission, this measure would not be imposed on countries
which, like Algeria, have opened up
their upstream energy sector to
European investors.
Algeria’s strategy, explains Mr Medelci,
consists of anticipating, of creating networks and of being present on the
international markets. This presence,
for a company such as Sonatrach,
implies that there is an honest agreement with the EU which enables it to
invest in the EU in the same way as its
European counterparts, in the name of
reciprocity. Hence we have great
concerns and hope that this point is
upheld through a formal agreement.
This agreement, the strategic partnership in the domain of energy, being fervently negotiated for more than a year
now, will be concluded, probably, in
2008, or a bit later.
The head of Algerian diplomacy revealed also a desire to go further and to
work on a strategic agreement in the
energy domain which could take
account of all the cooperation aspects,
including in the renewable energy sector.
Another dispute related to energy has
been cleaned up; Algeria and the EU
have reached an agreement in principle
which will be finally finalised in the
coming weeks between Algeria and the
EU with the participation of Spain, to
settle, finally, the problem of the double
taxation of gas practiced by Algeria in
favour of companies of Algerian law.
As a retaliatory measure, the EU, in
fact, imposes a very high additional tax
on fertilising products manufactured by
the Algerian-Spanish joint venture
Fertial (with a Spanish majority), by
means of which the gas, a major input
in these products, is sold at a price
lower than those of the international
market. The EU now accepts that
Algeria practices this double taxation
on its domestic market and for exporting, with two conditions that the prices
of the domestic market remain higher
than the cost price and that this taxation is applied without discrimination
to all companies working in Algeria.
This additional tax thus deprives
Algeria of one of its assets: the comparative advantage given to it by the
cheap availability of an input such as
gas and, hence, questions the interest
of the cooperation with the EU, especially given that the progressive dismantling of customs barriers will lead,
towards 2017, to the creation of a free
trade area where Algerian companies
will face the competition of the
European giants with no protection.
The third, almost conflicting matter –
the circulation of people - has also been
the subject of new discussions.
Algeria has always refused to confine
The EU has responded
favourably to the
Algerian request to
double the technical
support in order to
reinforce the SME-SMI
fabric in Algeria in
both quantity and
capacity.
itself to cooperation in this field to the
surveillance of the European borders
against the inflow of illegal immigrants
and to the agreements on accepting
illegal immigration, without improving,
at the same time, the legal conditions
concerning the circulation of citizens
with visas.
The EU has proposed to Algeria, just
like other European partners such as
Russia, Ukraine and the Balkan countries, to facilitate the granting of visas
particularly to targeted professional
categories (executives, students, businessmen, etc.) in exchange for
Algeria’s contribution to combating
illegal immigration flows, in cooperation with the other Maghreb countries
of transit and the countries of origin,
particularly sub-Saharan Africa. Both
parties have committed to make concrete proposals which will be submitted
for approval in the 3rd session of the
Association Council in February 2008.
Finally, one of the tangible results of
this working visit of Mr Medelci, the
EU has responded favourably to the
Algerian request to double the technical
support in order to reinforce the SMESMI fabric in Algeria in both quantity
and capacity.
The agreement in principle agreed
upon, which will also be finalised in the
next session of the Association Council,
relates to doubling the number of
SME-SMI (currently 200 to 300 companies) eligible to company start-up aid
and particularly managerial training, an
Achilles’ heal of the Algerian economy.
Furthermore, with regards the transition from the framework of the
Barcelona process to the European
neighbourhood policy, strongly desired
by the EU, Mr Medelci declined this
proposal.
He explained this with Mrs FerreroWaldner, as he feels that Algeria does
not wish to go in a direction without
knowing why, or if, we can bear what
results from it.
“We are awaiting a more in-depth
explanation from the EU so as to
understand what this contributes. Thus
we have said that our integration in the
European neighbourhood policy is not
on the agenda.”
Acknowledgements
Mr Chakib Khelil,
Minister of Energy and Mines
“Thank you for the seventh edition of the Energy and Mines review in its English version. I would like to thank you for it and wish you every success in your mission.”
Minister of Youth and Sports
Hachemi Djiar
Energie & Mines
89
january 2008
PARTNERSHIP
Partnership
Algeria-European Union
Mr Poeöttering: the EU notes
and supports “the strong
will to modernise and
democratise Algeria”
The European Union notes that there is a “strong will to modernise and democratise Algeria”, stated the President of the European Parliament, the German
Hans-Gert Poeöttering. In an interview with the APS on the eve of his departure to Algiers for an official visit from 28 to 31 October, Mr Poeöttering intends
to express to the Algerian authorities “our entire support to the development
of the country, to the fight against terrorism and to the defence of human
rights”.
The President of the European
Parliament intends to “personally
ascertain the evolution of the situation”
during the meetings he will have with
the President of the Republic,
Mr Abdelaziz Bouteflika, and the Head
of the Government, Mr Abdelaziz
Belkhadem,
as
well
as
with
Mr Abdelkader Bensalah, President of
the Council of the Nation, and
Mr Abdelaziz Ziari, President of the
National People’s Assembly.
Questioned on the concrete support
which the EU can give Algeria,
Mr Poeöttering stated that Algeria’s
development “relies, first and foremost,
on the importance of its own resources”. At the same time, he revealed that
“the political dialogue with Algeria is
highly advanced and the EU can
contribute to the modernisation of the
country, particularly by increasing the
technical cooperation”.
This for him, more precisely, means
“formalising the actual possibilities and
the perspective ones” which the EUAlgerian association agreement offers
both partners. This being the case, “the
development and cooperation efforts
with the EU must be completed by
increased cooperation between the
Maghreb countries”.
Among the topics, which the President
of the European Parliament intends to
mention, are two priority issues in the
agenda of bilateral cooperation.
Energie & Mines
90
january 2008
The signature of a master agreement
on the establishment of an energy
“strategic partnership” between the EU
and Algeria “in the process of discussion”, and which must, according to
him, enable “the support to the reforms
in the energy sector in view of the progressive harmonisation of the energy
markets of Algeria and of the EU”, the
development of “energy infrastructures
of mutual interest” as well as “the development of the technological cooperation and the transfer of expertise”.
As for illegal immigration, which is a
crucial
concern
of
the
EU,
Mr Poeöttering feels that this “com-
plex” phenomenon requires “a global,
long term approach. It must be treated
jointly with the countries of origin and
of transit”.
The European Parliament, he assured,
wishes for the putting in place of a “real
European immigration policy and the
creation of legal instruments aiming to
discourage illegal immigration”. He is
of the opinion that the putting in place
of a common immigration policy that is
“effective and takes account of the
imperatives dictated by the respect of
fundamental rights and human rights”
is a “priority objective”. The European
Parliament “also insists on the impor-
Partnership
tance of integrating immigrants
into the European societies”.
The President of the European
Parliament further proved to be
sceptical with regards the French
proposal of a Mediterranean
Union, as it does not associate
all the members of the EU and
its institutions, and duplicates
the existing contractual cooperation frameworks (Barcelona process
and
European
Neighbourhood Policy).
Mr Poeöttering upholds that
“there must be really European
initiatives, if some Member
States are, in fact, ready to make
progress in this direction, we
should not forget that a lot of
projects are in progress and
must not be ignored, at the intergovernmental level (Euromed
policy within the framework of
the Barcelona process) and community level (neighbourhood
policy, but also parliamentary
activities such as the EuroMediterranean Parliamentary
Assembly - EMPA - which brings
together
the
European
Parliament and the national parliaments both of the European
Union and of the Mediterranean
partner countries of the Union,
of which the President of the
European Parliament is the Vice
President)”. On another topic,
Mr Poeöttering, known for his
strong commitment to the dialogue of civilisations, has set himself as a priority, as the President
of the European Parliament, “the
promotion of the intercultural
dialogue”.
Rejecting the theories on the
“clashing of civilisations”, he
feels that “this, rather, means
promoting the peaceful co-exis-
tence between different cultures,
particularly Christianity, Islam
and Judaism”.
This dialogue “must be firmly
rooted in tolerance and truth.
Tolerance is not synonymous
with a pure and simple acceptance of everything. Tolerance
implies respecting the convictions of others whilst remaining
faithful to ones own.”
Mr Poeöttering feels that it is
“important” that “the partner
countries
understand
that
cooperation is not simply a technical question: cooperation
starts in common values which
each of the parties should promote constantly and together
(human rights, human dignity,
fundamental freedoms)”. “I am
entirely convinced that the intercultural dialogue can only progress if it is based on truth and
tolerance”.
The year 2008, he recalled, has
been declared by the EU as
“European Year of Intercultural
Dialogue”, which will give the
European Union the opportunity
to “highlight the themes of the
European
Neighbourhood
Policy, on the one hand, and of
the intercommunity relations
within Europe, on the other”.
“We will encourage the intercultural
dialogue
in
the
Mediterranean region, amongst
others. The EU will commit in
favour of peace, cooperation and
friendship to build an intellectual
and cultural bridge across the
Mediterranean”, emphasised the
President of the EP.
The EuroMediterranean
“Tempus” programme’s report
examined in
Constantine
The report on the actions carried out within the framework of the common European project
“Tempus” (Trans-European Mobility for University
Studies), designed initially at the University of
Constantine, was, with the examination of the possibilities of renewing it, the theme of a working session at the headquarters of the Faculty of
Economic Sciences and Management of the new
city of Ali Mendeli (Constantine).
The meeting enabled the representatives of the
Mentouri University of Constantine, as well as
those of the university establishments of Jijel and
Skikda, now interested in the programme, to report
the results of this three-year project financed by
the EU for an amount of 530,000 euros.
The dean of Mentouri University, Prof Abdelhamid
Djekoun, presented a brief report of the acquisitions achieved within the framework of this cooperation programme which is reaching its end.
Among the results of this project qualified as
“ambitious and very profitable to the three university institutions concerned”, Mr Djekoun emphasised
the creation, in particular, of 7 professional degrees, of at least 4 masters with 12 specialities in
economic sciences, management, biology and
electronics and an entrepreneurship centre.
The European Union, through the “Tempus” programme, finances and supports the higher education reform policies carried out in certain countries,
including those of the Mediterranean Basin. In
Algeria, this programme is particularly designed to
support the university establishments in their
modernisation efforts and in those of putting in
place a professional education which responds to
the economic and industrial needs.
Energie & Mines
91
january 2008
PARTNERSHIP
Partnership
Algeria-Iran : Visit to Algeria of President Ahmadinejad
“We are ready to cooperate
in all domains with Algeria”
Bouteflika-Ahmadinejad
head-to-head
■ President Bouteflika invited to Iran
■ The banking, financial,
hydrocarbons and even
agricultural sectors are all
domains which interest
Iranian investors.
■
“We are ready to cooperate in all
domains with Algeria, and we will provide you with all the experience we have
gained in the last decades.” This is
what was stated by the Iranian
President, Mr Mahmoud Ahmadinejad,
to Algerian businessmen.
Indeed, Algeria’s host, who chaired the
two countries’ Businessmen Forum,
particularly emphasised that his country was “ready to give Algeria the benefit of its experience in certain domains,
particularly in petrochemistry and the
automobile industry”. Hence, he affirmed that he intended to support “personally” any approach striving to develop a fruitful bilateral cooperation.
The Iranian President also continued
to emphasise all the elements in common and of concordance which bring
the two countries together - elements
such as a glorious revolutionary past,
enormous economic potentials and
close civilisations.
“Iran and Algeria can become a very
important economic power in the
region if these two countries exploit,
together, their enormous resources in
the hydrocarbons’ domain, where the
two countries have a very large potential”, explained the Iranian President.
Mentioning the actually exploitable
potential, Mr Ahmadinejad indicated
that Iran has no less than 56% of oil
Energie & Mines
92
january 2008
reserves and 36% of gas reserves of
OPEC. This country also owns 18% of
the world’s gas resources.
“In my opinion, there is a need to
increase bilateral cooperation in this
domain”, he further stressed before
adding that his country can give invaluable help in domains as diverse as
agriculture (more than 2 billion dollars
annually in exports) and industry (13
million tonnes of steel produced in
2007).
Furthermore, the Iranian President
advocated the setting up of an economic information collection committee
on the investment potentials in both
countries, to accelerate the cooperation
process. In this context, he mentioned
the need to reactivate and formalise the
old agreements signed in the previous
years, and particularly those concerning the banking and financial sectors.
With regards most of the discussions
with the President of the Republic,
Mr
Abdelaziz
Bouteflika,
Mr Ahmadinejad specified that a positive response was given to him by the
latter in order to create, shortly, an air
link between Algiers and Tehran, not
only to promote tourism, but also to
“be in line with the political relations
between our two States”.
These relations are links which should
be reinforced during the next visit
which President Abdelaziz Bouteflika
hopes to make to Iran in 2008, as
Ahmadinejad announced.
Other questions were also able to be
taken into account and settled, particularly with regards the question of establishing preferential tariffs in the trade
relations between the two countries,
including a joint commission responsible for studying this matter, as well as
the matter of removing the double taxation for investments in one of the two
Partnership
Signature of
four cooperation
agreements
These deal with the habitat, justice,
culture and airline services.
■ President Bouteflika:
“We feel it is unacceptable to thwart the
right to acquire nuclear technology
for peaceful purposes.”
■ President Ahmadinejad:
“We hail the return of peace and security in
Algeria, as well as President Bouteflika’s
“good management”.
Algeria and Iran have signed four bilateral
cooperation agreements, dealing with the
habitat, justice, culture and airline services,
at the time of the State Visit made to
Algiers by the Iranian President,
Mr Mahmoud Ahmadinejad.
The first documents concerns an executive
programme for 2007-2009 between the two
countries' Ministries of the Habitat, signed
by the Ministers responsible for the sector,
Mr Noureddine Moussa, on the Algerian
side, and Mohamed Saïdi Kia on the
Iranian side. A report on the exchange of
documents dealing with the cooperation
agreement in the cultural domain, signed in
Algiers on 25 December 2002, was further
signed by the Minister of Culture,
Mrs Khalida Toumi, and the Iranian Minister
of Islamic Culture and Guidance,
Mr Mohamed Hussein Safar Harendi.
Both Ministers of Foreign Affairs, Messrs
Mourad Medelci and Manouchehr Mottaki,
signed, for their part, the report on the
exchange of documents dealing with the
judicial cooperation agreement in the criminal domain, concluded on 19 October
2003, and an agreement on the
“airline services”.
The four agreements were signed during
an official ceremony at the headquarters of
the Presidency of the Republic, in the presence of Presidents Abdelaziz Bouteflika
and Ahmadinejad.
countries which should meet up
after the month of Ramadan,
according to the Statesman.
Finally, there is still a lot to be done
to promote and build “fruitful”
trade relations for the two countries, now that the will is expressed
by both parties, emphasising, in a
last trait of spirituality that, “it is
from great combats that great victories are born; we have nothing to
fear of the obstacles and have to
face up to the challenges”.
For his part, the Algeria Minister of
Industry and the Promotion of
Investments, Mr Hamid Temmar,
who co-chaired this meeting, specified from his side that this meeting would rightly enable the
Iranian industrialists to acquaint
themselves with the change in the
business climate and with the
investment possibilities in Algeria,
in an economy that is now wide
open to free enterprise.
Energie & Mines
93
january 2008
PARTNERSHIP
Partnership
9th session of the Africa Partnership Forum
President Bouteflika :
“We accord maintained
attention to governance”
The President of the Republic, Mr Abdelaziz Bouteflika, stated in Algiers
during a speech on the occasion of the 9th session of the Africa Partnership
Forum. Here is the full text:
“Excellency President of the Federal
Republic of Germany, Your Highnesses,
Ministers and Personal Representatives
of the Heads of State and Government,
Ladies and Gentlemen,
I wish to bid you welcome amongst us
and assure you that my country shall
spare no effort to contribute to the full
success of your meeting. We are especially honoured of the presence among
us of His Excellency Horst Kohler,
President of the Federal Republic of
Germany.
His participation in this opening ceremony is a strong signal of the important attached by Germany and the G8,
which his country currently chairs, to
this forum and to its crucial role in furthering the partnership between Africa
and the developed countries.
Your initiative, “Partnership with
Africa” is a testimony of this commitment and has bolstered the efforts
displayed, to this very end, at bilateral
and multilateral levels. As you have
pointed out on several occasions,
“Africa is a continent with a future”.
This conviction is also our conviction.
The prosperity of Africa also means the
prosperity of its partners.
It is in this spirit that we conceive of
our relationship with the G8 countries,
a relationship we wish to be of mutual
benefit, one that fully breaks away with
the logic of subservience that prevailed
in the past.
As we have often reiterated, through
the principles and objectives of
NEPAD, the development of the continent in priority challenges the Africans
themselves. This development should
meet the actual expectations of African
Energie & Mines
94
january 2008
people and can only be achieved with
their active participation.
It rests first and foremost on the mobilisation and the valorisation of the
natural resources available to this
continent. The accompanying of such
efforts by the development partners
and the international community in
general of course remains a prerequisite that must not be shirked. For this
accompanying to be really effective, it
should be focused round priorities defined by the Africans themselves.
Within the framework of this Africa
Partnership Forum, the premier objective should remain striving towards a
better pairing of our efforts so that the
dynamics of dialogue, cooperation in
solidarity, and mutually profitable partnership put in motion since Kananaskis
fully meets our hopes and expectations.
The present gathering will be able to
valorise the important progress achieved along such lines. Moreover, it shall
not fail to find out the ways and means
required to consolidate such advancement. It is pointless to emphasise the
magnitude of the challenges to be
addressed as Africa, in the current circumstances, will probably be the only
continent that will fail to meet the
Millennium Goals set for 2015. It is yet
time to act, act promptly and act in
union. This is the message that we have
retained from the Heiligendamn G8
Summit. This message should inspire
and guide your discussions.
Mr President, Ladies and Gentlemen,
the African countries are all engaged in
huge reform programmes. Though a
positive assessment of the first outcomes of such reforms can be made, there
is little doubt that the results still fall
short of the mark. Thus, in the economic sphere, the creditable economic
growth rates achieved by a great number of African countries have not been
matched by a significant reduction of
poverty. In matters of health, education, employment, housing and gratification of the vital needs of populations,
challenges substantial, and in need to
be addressed urgently.
The processes involved in recasting and
streamlining the institutions in charge
of development have shown the long
path still left ahead of us before we
enjoy institutions that have the capacity efficiently to meet the quantitative
and qualitative requirements of our
societies and of our economies. These
processes have brought to the fore the
crucial importance of the governance
issue as part of the manifold dynamics
relating to the transformation of societies. Governance, good governance, in
fact constitutes the core lever and the
main engine for development.
This is the reason why we are henceforth addressing governance with
unflinching care for governance. This
is also the reason why we have proposed that the leading theme of this our
meeting of today be that of governance
as it relates to development.
Obviously, success in the development
process is conditional on improving
and enshrining sustained integration of
rules and standards of good governance into all the areas of activity. Our
efforts to this end are geared essentially towards transparency in the management of public finance, towards the
creation of an institutional environment
that constitutes an incentive for national and foreign investments and also
Partnership
towards combating the terrible
plague of corruption.
Combating corruption has, in
particular, become one of our
major concerns. More than in
anywhere else, each act of corruption taking place on our
continent has dire consequences
on socio-economic development.
Eradicating this phenomenon
requires the effective mobilisation and active commitment of all
the African countries, and yet
also the effective mobilisation
and active commitment of all
their development partners.
The initiatives adopted in this
regard by OECD and the World
Bank are indeed praiseworthy,
but their scope is still limited. Yet,
the fostering of governance in
Africa may not be reduced to the
sole combating of corruption,
nor be the sole motivation for
such combating.
Mr President, Ladies and
Gentlemen, the establishing of
the African Peer Review
Mechanism is a response to such
concerns. This mechanism
expresses a will to go beyond and
break away with those approaches to, and methods for, governance, whose limits have been
demonstrated, approaches and
methods that have not enabled
the continent to score progress.
Over half of the member countries of the African Union have
already accessed the Mechanism;
meanwhile, the review processes
are taking place in a growing
number of countries.
The effort displayed through the
African Peer Review Mechanism
is to be seen as part of a global
approach striving to generate a
culture of transparency and to
install institutions whose role is
to reduce the areas of armed
conflicts, to broaden the loci
where peace and stability prevail,
to foster constitutional legitimacy
and people representation, to
establish and enshrine democratic governance systems based on
broad participation, and to
encourage regional and continental integration processes.
Algeria has fully endorsed this
logic of African renewal.
We have indeed committed deep
reforms geared towards a sustainable enshrinement of democracy, of the rule of law, of political
pluralism, of freedom of expression, of the protection and fostering of human rights, of equal
opportunity and of social justice.
These reforms have been applied
to all the strategic areas of our
society’s life.
The policy of civil concord and
national reconciliation, endorsed
by referendum by the Algerian
people, has brought about a restoration of peace and stability
and made it possible to channel
the whole nation’s efforts and
resources towards a new take off
of the country’s socio-economic
development.
Today, Algeria is a huge institutional, economic, social and cultural work site, moved as it is by
a staunch determination to mobilise all its resources and devote
the towards calling into play such
instruments as may enable the
country to be attuned to the
requirements of modernity.
We are nurturing the same ambition for our continent, a continent whose development and
prosperity remain our constant
concern and the object of all our
endeavours.
I wish full success to your works
and thank you for your kind
attention.”
Knowledgements
The Ambassy of the Federal Republic of Nigeria in Algiers
The honorable minister
Ministry of Energy and Mines People’s Democratic Republic of Algeria
We wish to refer to your letter ref. N° 1165/CAB.07 of 09/099/2007 and to
acknowledge with thanks the receipt of a book in respect of the Energy
sector elaborated by the Company of hydrocarbons in Algeria. Please
accept the assurances of our highest consideration.
O. O. Osasona, Chargé d’affaires a.i
Horst Kohler
“For fair trade between
Africa and the industrialised
countries”
The President of the Federal Republic of
Germany, Mr Horst Kohler, pleaded in Algiers for
the establishment of fair terms of trade between
Africa and the industrialised countries, particularly
proposing the removal of customs duties on transformed African products.
In his opening speech of the 9th session of the
Africa Partnership Forum (APF), Mr Kohler
emphasised that these fair terms "must be reflected in the outcome of the ongoing trade negotiations” in order to lead to “Africa’s integration in the
world economy”.
For the German Head of State, globalisation
means “an interdependent international community” which consists of finding “common solutions
that will benefit all”.
“We need policies and verifiable procedures to
ensure that Africa’s natural resource wealth benefits, above all, Africa’s own peoples”, he further
emphasised, adding that “talking to each other,
listening to one another, tackling things together
[…] - this is what we need if our development policy for the entire planet is to prove successful”.
In this context, Mr Kohler felt that the APD “can
play an historic part" in achieving this objective.
Dealing with the African Peer Review Mechanism
(APRM), carried out within the framework of
Nepad's initiative, the German Head of State stated that this initiative “must instigate a sweeping
process of political and economic reforms that will
bring lasting improvements to economy and society” in African countries.
On this point, he said that Algeria’s review within
the framework of the APRM gives it “a largely
clean bill of health”, calling upon western countries to learn from this initiative.
“The time is over when only the countries of the
North can provide solutions to development problems”, he said.
Furthermore, mentioning the Nepad initiative
which targets, he specified, peace, democracy,
good governance, regional cooperation and
Africa’s integration in the world economy,
Mr Kohler expressed his desire to see this African
cooperation offer accepted by the international
community.
Nepad is “an offer from Africa to the international
community. It is an offer I very much hope the
industrialised and emerging countries will accept”,
he said. With regards the Millennium Development
Goals (MDG), the German Head of State emphasised the importance of working together on
achieving them so that the commitments it made
to the other are delivered on.
Energie & Mines
95
january 2008
PARTNERSHIP
Partnership
Project launch conference in Brussels
The TSGP reinforces
Sonatrach’s African leadership
The Trans-Saharan Gas-Pipeline
(TSGP) project highlights Sonatrach’s
African leadership and reinforces
Algeria’s major role in its dual capacity
as supplier country and potentially
transit country, recognised both by the
African partners and by the EU.
The launch of this project has come up
against “some resistance due to the
pressure” exerted by large petroleum
companies which wanted to keep
control of the marketing of these
resources in Africa, according to
experts present at the TSGP launch
conference in Brussels.
“Strong political will” at the highest
level of the Algerian and Nigeria States
was needed to remove the latest “reticence” and to launch this project led by
Sonatrach and its Nigerian counterpart
NNPC (Nigerian National Petroleum
Cie) – a will reinforced by the New
Partnership for Africa’s Development
(NEPAD) which has made it one of its
main “integrating and structuring”
programmes.
The 4,128km long gas pipeline requires an investment of 10 billion dollars,
and will cross 1,037km over the
Nigerian territory, 841km in Niger and
the longest section, 2,310km, will cross
the Algerian territory as far as the
Mediterranean coast at Beni Saf to the
west or El Kala in the east of the country.
Although this is Nigerian gas, this
country’s representative of the Minister
of Energy, Mr Tony Chukwueke, stated
that Nigeria “will rely on” Algeria for
the exporting of this gas, given its experience and know-how recognised in
terms of pipeline construction and its
proven knowledge of the European and
international market.
Algeria’s African leadership is “undisputable”, according to Nigeria’s representative, and it would be unproductive
to deprive it of this for the moment.
This know-how and the many partnerships of Sonatrach with European
firms will be even more invaluable given
Energie & Mines
96
january 2008
that the competition will be stiff in the
coming years with the arrival on the
European market of new large suppliers of Europe (the Gulf countries
and Central Asian countries), according to the specialists.
This projects profitability for Algeria
will be 15% (500 million dollars in
revenue for 3 billion exports by the
TSGP) and will exceed the average
return on investment in gas pipelines
(12-13%).
Algeria’s final participation formula has
not yet been decreed, but specialists do
not exclude the idea that it could be the
buyer of all or part of the Nigerian gas
intended for Europe and that it will be
responsible for exporting, or even marketing in a very small part in Europe.
Sonatrach will have “no problem in finding outlets for this gas”, particularly
given that world demand will continue
to increase for a long time still, stated
the Minister.
With Europe, Algeria is also reinforcing
its position as one of the main gas suppliers to the EU with 95 billion cubic
metres a year in a few years’ time.
With its pipeline networks, its underwater gas pipelines, already in service,
its participation in exports in the
African continent, this role could be
reinforced in the future.
As one of the “priorities” of its common energy policy, the EU has set itself
the conclusion of a strategic partnership with Algeria.
The European Commissioner for
Energy, Mr Andris Piebalgs, “strongly”
wished for this partnership to be
concluded as quickly as possible.
Algeria, for its part, is “ready”, reconfirmed the Minister of Energy and
Mines, Mr Chakib Khelil, who recalled
during a press conference that it is the
EU which has delayed the mission
which should have finalised this partnership in Algiers two months ago.
The partnership will be signed “when
both parties are at ease; we are at ease”,
he said.
The EU official further launched, once
again, a strong signal, proclaiming
Algeria’s “reliability” for over 30 years.
Even during the dark years, proudly
state Sonatrach’s directors, “never did
Algeria falter, not even for one hour” in
its trade obligations, sometimes “at the
cost of unknown human losses”.
When, in 2005, due to the RussianUkrainian gas conflict, gas risked a
shortage in Europe, the EU made use
of Algeria’s availability and, in some
cases, the surplus gas supplied by
Algeria was even resold by Europeans
on juicier markets in the United States,
he added.
This “recognition” reiterated three
times in the last few months by the
highest authorities of the EU, far from
being neutral, reinforces Algeria in its
trading test with one of the member
countries of the EU, Spain, and confers
to it additional respectability, acquired
further by the seriousness of its commitments in view of penetrating the
distribution market in Europe particularly.
The TSGP is at its phase of “creating
the project company and seeking
potential buyers for this gas” which has
lasted two to three years. Once this aim
is achieved, the construction phase will
be initiated by the international partners (gas suppliers to Europe and
banks particularly) over a period of
four to five years so as to be ready to
release this gas by 2015, according to
the forecasts.
The project’s two initiating firms,
Sonatrach and NNPC, have enough
liquidity to reassure the partners and it
will be “easy” to find additional financing, once the project company stage is
reached, as was the case for the
Medgaz (Algeria-Spain) project, the
Algerian delegation assured.
Partnership
Algeria-Tunisia
Signature of nine cooperation
agreements
The works of the
16th session of the
Algerian-Tunisian joint
cooperation commission, which took place
in Algiers, were sanctioned by the signature of 9 cooperation
agreements in the
presence of the Head
of Government,
Mr Abdelaziz
Belkhadem, and
the Tunisian Prime
Minister, Mr Mohamed
Ghannouchi.
In the domain of employment, the two
countries signed an agreement aiming to
exchange documents, the legislation,
studies, information and visits of the
heads of this sector and to develop programmes encouraging employment, the
integration of young people and support
to companies in charge of employment
and professional guidance.
Both parties also signed an agreement
on the mutual recognition of driving
licences in order to facilitate the circulation of Tunisian and Algerian citizens
between their respective countries and
to reinforce the contacts between the
two peoples.
In terms of protecting plants, both parties have agreed, by virtue of the agreement signed, to exchange information
through the organisation of joint supervision campaigns of the propagation of
plant diseases to protect the plants in
both countries.
Both parties signed an appendix to an
agreement related to children and the
elderly. This concerns cooperation in
terms of exchanging legislation and
audiovisual documents, training for
children and people with special needs,
the putting in place of databases and
communication networks between the
companies and the drawing up of
research and studies.
Both parties also signed a cooperation
agreement in the domain of industrial
property between the Algerian Institute
of Industrial Property and the National
Standardisation
and
Industrial
Property Institute of Tunis.
This agreement shows the desire of
both countries to adopt the standards
in force.
Algeria and Tunisia signed an executive
cooperation programme in terms of
social aid (2007-2009) which provides
for the exchange of legal texts and the
training programmes to train handicapped people, train social supervisors
and the professional insertion of unemployed people with special needs.
To reinforce the trade relations and
encourage investment, both parties
signed an action programme between
the National Foreign Trade Promotion
Agency and the Tunisian Export
Promotion Centre. The text states the
exchange of statistics and legislation
related to foreign trade, data related to
the respective markets, trade information other than customs duties as well
as the organisation of work placements
for the executives of both countries.
With regards media cooperation,
Algeria and Tunisia have signed an executive cooperation programme (20072009) with the objective of reinforcing
the cooperation between the two brother countries in the light of the agreement concluded, in the previous
session of the large joint bilateral
cooperation commission last February
in Tunisia, between the two press agencies and the two television companies.
An executive programme in the domain
of professional training was also signed
(2008-2009) aiming to support this
sector, particularly through the training
of trainers, the exchange of experiences
and the drawing up of training programmes and methods.
Acknowledgements
Alpha Oumar Kounaré to Chakib
Khelil on the Energy and Mines
review
Convoying two publications addressed
to his Excellency Prof Alphe Oumar
Konare, Chairperson of the commission,
by his Excellency Dr Chakib Khelil,
minister of Energy and Mines of the
People’s Democratic Republic of
Algeria, the chairperson expresses his
appreciation for the valuable publication
ad requests the esteemed embassy to
convey his fraternal best wishes to the
minister. The commission of the African
union avails itself of this opportunity to
renew to the embassy of the people’s
democratic republic of Algeria the assurances of its highest consideration.
Energie & Mines
97
january 2008
PARTNERSHIP
Partnership
Investments : the vice-president of the EIB
“Algeria is the best
market of the southern
Mediterranean”
Mr Phillippe de
Fontaine-Vive said he
was “surprised” by the
hesitations of foreign
investors to go into
Algeria. “These investors are wrong.” “They
have to invest now,
not tomorrow.”
The Vice-President of the European
Investment Bank, Philippe de FontaineVive, indicated in Marseille that Algeria
is “the best market of the South
Mediterranean region” to be able to
pull in foreign investments.
On the fringes of the 3rd EuroMediterranean Business Conference,
the Vice-President of the EIB stated to
the APS that “Algeria has sufficient
public finances to assure investments in
major structuring projects capable of
reinforcing its national sovereignty and
guaranteeing its freedom of action”,
adding that, in this respect, “Algeria
does not need European or foreign
contributions”.
Faced with this reality, the EIB has
decided to focus its efforts on the private sector which “needs investments
to accelerate growth quickly and to
create more jobs”, added its VicePresident.
Phillippe de Fontaine-Vive said he was
“surprised” by the hesitations of
foreign investors to go into Algeria.
“These investors are wrong.” “They
have to invest now, not tomorrow”, he
indicated.
The Vice-President of the EIB also
announced his trip, in December, to
Algeria, to sign the first stake-holding
contract of this bank in an Algerian
company. This is the company “Les
nouvelles conserveries algériennes”.
“The EIB will be a shareholder within
NCA. We are still in the negotiation
phase to fix the level of our stake in this
Algerian company”, he added.
Mr Phillippe de Fontaine Vive also
pointed out the plan to create a
Mediterranean bank. “This project is in
maturation phase.” It will probably be
discussed in the summit of the Heads
of State of this region, proposed for
next June by President Nicolas
Sarkozy, within the framework of his
idea of a Mediterranean Union, he
added.
According to the agency Anima
Algeria is the number 2 Mediterranean
country which draws in the most FDI
The Euro-Mediterranean Network of Investment
Promotion Agencies, “Anima”, emphasised that Algeria is
still among the countries of the Mediterranean basin
which “draws in the most foreign direct investments”.
In a study presented at the time of the 3rd EuroMediterranean Business Seminar, organised in Marseille
by the press group The Economist, Anima indicated that
Algeria is in 2nd place in terms of volumes of foreign
direct investments (FDI) granted in the space of nine
months (from January to September 2007). No less than
6.2 billion euros have been committed to finance 78 projects, concerning different niches and sectors such as
banking, insurance, food, energy, health, electronics and
services and distribution.
Egypt is in first place with a volume of 7.15 billion euros
for 81 projects listed.
Energie & Mines
98
january 2008
In this study, Anima notes for the same period the “appeal
regained” by the Mediterranean region. “In 9 months of
the year 2007, 500 FDI were recorded, mobilising
43 billion euros”, reports the Mediterranean network, specifying that the main sectors mobilising investments are
construction and property (14 billion euros), energy
(9 billion euros), banks (8.3 billion euros) whereas the
volume of FDI in the telecommunications sector reduced
to reach 2.4 billion euros.
In this same period, indicates Anima, the Gulf countries
represent the largest investors in the Mediterranean
region (36%).
We are also seeing a return of the European countries
with 31% of the projects. “With regards destination,
Maghreb is returning in force”, further specifies the same
network.
Partnership
3rd Economic Forum on 20 and 21 January 2008
Algeria hopes to draw in
50 billion dollars of Arab FDI
in 2008
The initiation of the second economic recovery support plan, given a significant financial package of 150 billion dollars, has greatly contributed to
drawing in foreign investments, particularly Arab ones.
Hence, the general climate marked by
political stability and regained security
will have enabled the conditions favourable to attracting Arab capital to be
met, particularly from the Gulf countries which, this year, have recorded
considerable financial surpluses estimated at 1,000 billion dollars further to
the increase in the oil price. The privatisation process launched by Algeria is
the other incentive factor that is likely
to focus further the investment opportunities on our country which has a
wide range of advantages such as the
revision of the related texts.
During a press conference held in the
presence of Mr Hocine Faouaz, regional director for North Africa within the
El Iqtissad oua el Aâmal Group, partner of the Algiers Economic Forum
planned for 20 and 21 January 2008,
the President of the Algerian Chamber
of Commerce and Industry (Caci) indicated that this great economic meeting
should see the participation of 300
businessmen from Arab and international financial institutions. Meaning that
the 3rd Algiers Economic Forum, placed under the high patronage of the
President of the Republic, will be an
opportunity to optimise the terms of
welcoming Arab capital and initiating
the businessmen of the region in the
Algerian reality, often unknown due to
media-coverage, whether voluntary or
not, to Algeria’s disadvantage.
Inter-Arab trade represents
2% of our foreign trade
In 2006, the volume of Arab FDI in our
country was around 35 billion dollars
in the first quarter of 2007. This figu-
re, which was 10 billion dollars in the
first quarter of 2007 and 35 billion dollars at the end of the third quarter of
the same year, should reach, according
to the forecasts, an amount of 40
billion dollars at the end of the current
year, 25 billion dollars of which granted by the Emirate Group Immar.
Algeria hopes to increase this figure to
more than 50 billion dollars for 2008,
noted Mr Bendjaber who added that
inter-Arab trade only represents 2% of
our foreign trade.
The President of Caci, mentioning the
reforms undertaken by the Algerian
State with the effect of encouraging
foreign investment, did however
emphasise the persistence of the constraints linked, in particular, to indus-
trial land and bureaucracy. For his part,
Mr Hocine Faouaz directly posed the
problem of land ownership, given that
the Algerian State is opting for the process of concession when related to
foreigners. The speaker also stated that
Algeria should set up a structure that is
exclusively responsible for the large
investments in order to take account of
this category of projects. With regards
the January forum, he confirmed that
this meeting will enable the evolution of
the land to be sounded out and, potentially, the investment opportunities to
be known.
Mr Faouaz affirmed that, since the
2000 forum, about fifteen Arab investors have set up in Algeria. This figure
is likely to increase given the potentials
offered by the national market, especially given that our country is felt to be
the future centre of foreign investments
by the observers of the economic scene.
The most coveted sectors are services,
tourism and construction.
Acknowledgements
From the African Petroleum
Producers Association to His
Excellency, Dr Chakib Khelil, Minister
of Energy and Mines,
“Your Excellency,
I am honoured to acknowledge receipt
of your letter dated 29 July 2007 in
which you sent me the Energy and
Mines review. Thank you so much for
this important source of information.
Yours faithfully,”
The Executive Secretary
David Ekoume
Energie & Mines
99
january 2008
RD
OPEC Summit
SUMMIT
3rd3OPEC
Energie & Mines
100
january 2008
3rd OPEC Summit
Energie & Mines
101
january 2008
RD
OPEC Summit
SUMMIT
3rd3OPEC
President Bouteflika :
“A qualitative leap to lay down
the paths for dialogue”
Mr Bouteflika: “The long term strategy, which has emanated from the Riyadh
Summit, aspires to protect the interest of the future generations by maintaining this vital equilibrium which relies on our concern to strengthen the links
of cooperation, partnership and responsible dialogue between the exporting
countries and their petroleum consumer peers, as a sine qua non condition to
the achievement of our aspiration to guarantee prosperity for everyone.”
Assuring the stability of the market,
pursuing the international dialogue on
energy security, without losing sight of
the now priority problems of the environment and of sustainable development, - these are the three essential
points to which, in a final declaration,
the Summit of the Organisation of the
Petroleum
Exporting
Countries
(OPEC), organised in Riyadh, has
committed.
This summit saw the active participation of Algeria, making the President of
the Republic, Mr Abdelaziz Bouteflika
say, in his speech at the closing session
of this 3rd Summit, that this session
has achieved a qualitative leap. This
leap has enabled it to reinforce the
foundations and strengthen the ranks
of the organisation in a specific international climate which calls upon us,
more than ever, to promote our links of
close cooperation and to lay down
paths for dialogue and exchange with
our partners in the world with the
effect of protecting our mutual interests, furthermore stated Mr Bouteflika.
He emphasised, in this context, that
Saudi Arabia enjoys a preponderant
role within this organisation.
“Once again, my brother servant of the
Holy Places, you have demonstrated
your customary ability to take up the
challenges and assume the historic
responsibilities each time it is a question of serving the supreme interest of
the people and of the States of OPEC
as you demonstrated, recently, during
the Arab Summit in Riyadh, last spring,
which you successfully presided over.”
Hence, as our President has specified,
Energie & Mines
102
january 2008
rd
“if the 3 OPEC has been crowned by
great success, it is because of the high
sense of responsibility demonstrated by
our Majesties, Highnesses and
Excellences brothers and friends,
Heads of State of the member countries who have enriched the deliberations of the summit with their constructive ideas”.
The long term strategy which has emanated from the Riyadh Summit, according to Mr Bouteflika, aspires to protect the interest of the future generations, by maintaining this vital equilibrium which relies on our commitment
to and our concern about reinforcing
the links of cooperation, partnership
and of responsible dialogue between
the exporting countries and their petroleum consuming peers, as a sine qua
non condition to the achievement of
our aspiration to guarantee prosperity
for everyone”, he further emphasised,
before particularly specifying the fact
that “it is in this aspiration that we find
our sustained effort to reinforce our
solidarity with the least developed
countries”.
The Head of State thus emphasised, in
this respect, the fact that the Riyadh
Declaration, which sanctioned this
OPEC summit, participates from the
desire to actually make a reality of the
objectives “to which we aspire and
which have been the essence of the
OPEC policy since its creation”.
Finally, Mr Bouteflika was keen to
recall that “this policy was already established at the time of the first summit
held in Algiers which had the great
merit of crystallising and of laying
down the foundations and the principles which were effectively expressed
during the Caracas Summit”.
3rd OPEC Summit
It should be said that, as is customary,
this organisation, which has once again
become a force to be reckoned with
over the last ten years, has always been
keen to protect the great international
equilibriums, hence the decision taken,
once again, by the thirteen countries of
OPEC, to continue to supply the world’s petroleum markets in a “sufficient
and reliable” way.
“We have decided to continue to ensure the supply of the petroleum market
in a way that is sufficient and reliable in
order to respond to global requirements”, thus indicated the text of the
Riyadh Declaration, which also highlighted the importance of world peace
for the stability of the energy markets
and investments in this sector. The
declaration even called to “strengthen
and broaden the dialogue between
energy producers and consumers”,
through the International Energy
Forum and other regional and international channels, as well as with the large
economic groups and the emerging
powers such as Russia and China.
The summit’s final declaration did not
mention the problem of the depreciation of the dollar and the Iranian proposal to study the possibility of fixing
the world’s oil prices in currencies
other than the American currency
alone, but the fact remains that the text
specified that the organisation would
“study the means of reinforcing the
financial cooperation between the
member countries of OPEC, including
a proposal made by some Heads of
State”. Furthermore, the organisation
confirmed that it wished to work with
all parties to “guarantee global markets
balanced with suitable prices”.
It also shared its desire to supply the
energy markets “at competitive, cheap
prices to assure better quality of life on
the global scale”. This is a very important decision, particularly given that
OPEC, which is keen to protect the
equilibriums, has affirmed the right of
producers and investors to “acceptable,
stable and equitable revenues”.
The organisation also undertakes to
“work together with the international
community in promoting different programmes related to sustainable development, particularly in terms of social
progress and development and protection of the natural environment”.
Finally, the Riyadh Declaration encouraged the development of carbon capture and storage technology, in view of
reducing greenhouse gas emissions.
However, in spite of all these resolutions taken, the fact remains that oil
prices have increased by almost a dollar
- a situation which makes analysts state
that the meeting has had no impact on
the market, since the issue of quotas
was not covered and that the next meeting, in Abu Dhabi, “should be more
significant”.
■ The President of the Republic,
Mr Abdelaziz Bouteflika, did not fail,
in his closing speech of the 3rd
OPEC Summit, to express his many
thanks and gratitude for the warm
welcome and exceptional hospitality
given to him since his arrival on
Saudi Arabian soil.
■ The current members of OPEC,
of which there are now thirteen, are
Algeria, Angola, Equator, Indonesia,
Iran, Iraq, Kuwait, Libya, Niger,
Qatar, Saudi Arabia, United Arab
Emirates and Venezuela.
■ They produce more than 300
million barrels of oil a day (mbd)
and respond to approximately 40%
of world production.
■ The world’s oil prices are expressed in dollars and the decline of this
currency (less than 25% in a year)
is reducing the revenues of the
OPEC producer countries.
■ OPEC’s previous two summits
were held respectively in Algiers, in
1975, and Caracas (Venezuela), in
2000.
■ Although dissentions appeared
between the different leaders, particularly the Iranian and Venezuelan
leaders, with the others, everyone
left on good terms. The closing
ceremony gave rise to endless hugs
and kisses between all the Heads
of State.
■ The sumptuous dining rooms and
conference room of the Saudi
Convention Centre, provoked the
admiration of numerous people present at this summit and several
asked how the enormous arches of
the immense main room managed,
without any pillar, to support this
architectural jewel.
Energie & Mines
103
january 2008
RD
OPEC Summit
SUMMIT
3rd3OPEC
King Abdallah :
“Oil is an energy for
construction and not an
instrument of conflicts”
It is with the desire and the concern for laying down a long term strategy and
enjoying a role of moderator on the world energy scene that the thirteen
Heads of State present at the 3rd Summit of the Organisation of the Petroleum
Exporting Countries (OPEC) signed the final report, bearing the name the
Riyadh Declaration.
Indeed, the resolutions read by the
Secretary
General
of
OPEC,
Mr Abdallah El Badri, in a sumptuous
room of the Saudi Convention Centre,
highlighted the importance of dialogue.
This dialogue will enable the divergences to be smoothed out, according to
him. Hence, the Organisation of the
Petroleum Exporting Countries insisted
on the need to smooth out the divergences for the establishment of world
peace. This peace will assure the stability of the energy markets and, of course, favour investments in the sector,
according to the final declaration of the
Riyadh Summit.
The Organisation of Petroleum
Exporting Countries also insisted on
the development of technologies favouring “clean oil” and particularly on carbon storage, to fight against global
warming, according to the text, as has
it also committed to continue to supply
the world petroleum markets in a “sufficient and reliable” way.
Hence, as explicitly announced by the
Secretary General: “We have decided
to continue to assure the supply of the
petroleum market in a way that is sufficient and reliable to respond to global
requirements.”
With regards the environment, OPEC
said it was favourable to the development of “clean oil” technologies. On
prices, OPEC made no direct comment, whereas the barrel is trading
close to its record levels, but confirmed
the right of producers to “acceptable,
stable and equitable revenues”.
For its part, Kuwait announced at the
OPEC summit in Riyadh a contribution
Energie & Mines
104
january 2008
of 150 million dollars to the environment protection fund, created upon the
initiative of Saudi Arabia which has
donated 300 million dollars to it.
This donation was announced by the
Emir of Kuwait, Sheikh Sabah AlAhmad Al-Sabah, in a speech given at
the OPEC summit as support “to the
scientific research financing programme on energy, the environment and climate change”. It should also be said
that this contribution reinforces the one
made by King Abdallah of Saudi
Arabia, who announced the creation of
a fund assigned 300 million dollars for
the protection of the environment
financed by Riyadh at the time of his
opening speech at this summit.
“I announce that the Kingdom will give
300 million dollars to constitute the
core of a programme which will finance the studies on the environment,
energy and climate change”, said the
Saudi sovereign.
It was therefore whilst hailing the Saudi
initiative that the Emir of Kuwait called
upon the other OPEC members to “put
more effort” into “supporting scientific
research in view of producing a nonpollutant fuel”.
This two-day meeting, attended by the
most important leaders of petroleum
producing countries, is therefore original in all respects, given the fact that
several divergences of points of view
marked it. The Riyadh Summit enabled
the organisation to deal with the entire
dimension of the stabbing issue of
emitting carbons into the atmosphere
and is already a “positive result to be
credited to the organisation”, as
emphasised a great many experts.
It should be noted that the issue of the
protection of the environment took up
a large amount of the deliberations of
this 3rd summit, even if the problem of
the decline of the dollar was blacklisted
particularly by the Venezuelan and
3rd OPEC Summit
Iranian Presidents who continued to sweep it under the
carpet.
“Oil is an energy for construction; it must not become an
instrument of conflict and of
emotions”, stated, yesterday,
King Abdallah.
OPEC wishes to achieve its
objectives and ensure long
term stability in the world,
indicated
the
Secretary
General of the Organisation,
Abdallah Salem El Badri,
saying he was extremely satisfied with the results recorded
by the Organisation since its
creation before calling upon
the member countries to
continue to take up the challenges in the future.
“We have taken up challenges
in the past and we have to
transform the challenges put
before us into opportunities of
growth and development for
all peoples of the planet”, he
emphasised.
“OPEC’s production capacities have been greatly satisfactory leading to harmonious,
global development”, confirmed Mr El Badri, who called
for making OPEC an instrument of prosperity and wellbeing for everyone.
Organised on the back of a
record increase in the oil price,
the extraordinary summit enabled the King of Saudi Arabia,
Abdallah Ibn Abdelaziz, to call
for ensuring that oil is not
made an “instrument of
conflict” and to take account
“wisely” of the impact of black
gold on the global economy.
Oil “is a means of development and construction and
must not become an instrument of conflict”, stated the
Saudi King at the opening of
rd
the 3
Summit of the
Organisation of the Petroleum
Exporting Countries. “Our
organisation has always adopted an approach of wisdom
and moderation and has
always laid down paths for
dialogue to the consumer
countries”, he added.
OPEC “was created (in 1960)
with the aim of defending the
interests of the producer countries and, at the same time,
protecting the global economy”, he recalled.
From Algiers to... Riyadh
The members of OPEC, of which there are now thirteen, are Algeria, Angola, Equator, Indonesia, Iran,
Iraq, Kuwait, Libya, Niger, Qatar, Saudi Arabia, United
Arab Emirates and Venezuela. They produce more
than 300 million barrels of oil a day (mbd) and respond
to approximately 40% of world production.
Finally, the Riyadh Declaration encouraged the development of carbon capture and storage technology, in
view of reducing greenhouse gas emissions. OPEC’s
previous two summits were held respectively in
Algiers, in 1975, and Caracas (Venezuela), in 2000.
Leaders present
The leaders of the OPEC countries present in Riyadh
for the summit were:
• Algeria: Abdelaziz Bouteflika (President)
• Angola: José Eduardo Dos Santos (President)
• Saudi Arabia: Abdallah Ben Abd Al-Aziz Ben Al
Rahman Al Saoud (King)
• United Arab Emirates: Sheikh Khalifa bin Zayed Al
Nahyan
• Indonesia: Vice President Jusuf Kalla
• Iran: Mahmoud Ahmadinejad (President)
• Iraq: Jalal Talabani (President)
• Kuwait: Sheikh Sabah Al Ahmad Al Jaber Al Sabah
• Libya: Chokri Ghanem, President of the National Oil
Company (NOC)
• Nigeria: Umaru Yar’adua (President)
• Qatar: Sheikh Hamad Bin Khalifa Al Thani
• Venezuela: Hugo Chavez (President)
At the time of the Riyadh Summit, Equator has to become
a member once again of OPEC after leaving it in 1992 and
its President, Rafael Correa, is participating in the meeting.
Challenges, but also ambitions
For a great many specialists of the issue, “OPEC’s image
in the world has changed”, particularly when the representatives of the organisation insistently confirm in
Riyadh and since the start of the works of this conference that a barrel priced 100 dollars does not interest the
organisation particularly given its ability to respond to
demand for oil regularly and OPEC’s contribution to building a better world. This is why OPEC’s priorities are
summarised in the stability of the market which inevitably
requires abundant supply and regular and safe supplies,
as expressed by OPEC’s main leaders during the course
of the summit.
To meet expectations, the OPEC countries have committed to a vast programme of investments of a total amount
of 500 billion dollars between 2005 and 2020.
These investments will enable OPEC to assure, thus,
additional production of 9 million barrels/day, according to
the statistics provided by the organisation on the fringe of
this summit.
Mr Khelil, who will become the President of OPEC in
January, called for “looking further afield” and recommended the path of dialogue with the producer countries to
assure the sustainable equilibrium of the petroleum market, with the prospect of an upsurge in world demand by
2030, due to the increasing needs of China and India,
according to the estimates of the IEA.
OPEC “will set about strengthening the dialogue with the
petroleum consumer countries, a dialogue that is extremely important for the organisation” to “protect both the
revenues of the member countries and the security of
energy supplies of the world’s economies”, he revealed.
Energie & Mines
105
january 2008
RD
OPEC Summit
SUMMIT
3rd3OPEC
Chakib Khelil :
“The adoption of a long term strategy
The main contribution
of the Riyadh Summit”
The OPEC summit, which has just finished in Riyadh, distinguishes itself from
the two previous ones by the fact that it has enabled the organisation to
adopt, for the first time, a long term strategy, declared the Minister of Energy
of Mines, Chakib Khelil, in an interview granted to the APS.
Mr Khelil explained that this strategy
was based on three main axes: the stability of the petroleum market by the
assurance of sufficient and regular supply, energy and sustainable development and finally assistance to disadvantaged countries.
Concerning the stability of the market,
OPEC once again favoured the path of
dialogue with the consumer countries
as often, “the petroleum producer
countries and consumer countries do
no have the same information” on the
status and the outlooks of the production and consumption per country and
on the international scale, which is a
source of sometimes major crises, said
the Minister.
Added to this, he revealed, is the role of
speculators which “is becoming so
important that it is pulling the market
at its will, and it is this volatility which
is harmful to the organisation”, in his
opinion.
To explain the importance of the dialogue and the exchange of information
between all the stakeholders in the
petroleum business, Mr Khelil mentioned this example: “The consumer countries have been asking for the security of
supplies for 15 years and more at the
time when the producer countries do
not have the guarantee of selling all the
additional amounts of oil for which they
have enormously invested.”
“This is not normal, and the Riyadh
Summit has raised the awareness of the
consumers on this point”, revealed
Mr Khelil.
“Algeria had an experience of this kind
in the 1970s with the United States
which asked it to invest in order to
Energie & Mines
106
january 2008
assure a larger production of gas to
then end up cancelling the order.”
For him, “this is what is likely to happen tomorrow between the OPEC producer countries and the petroleum
consumer countries”.
With regards energy and sustainable
development, the Minister confirmed
that OPEC “wishes to put the accent
on aid in favour of poor countries by
launching development projects in
order to enable them to use petroleum
as a source of energy”.
In this respect, OPEC wishes, for
example, to refocus the activities of its
fund to focus them on the disadvantaged regions, explained Mr Khelil, mentioning the possibility of creating a new
bank whose objective would be to help
the poor countries in this respect.
“The Finance Ministers of the member
countries shall deal with this issue in
the upcoming meetings at their level
and they have the prerogative of meeting and taking the decisions on this
plan”, he emphasised.
With regards the third point of the strategy (energy-environment relationship), Mr Khelil particularly mentioned
the need to maintain, for a long time,
the privileged place of petroleum in the
world energy balance whilst working to
protect the environment against its polluting effects.
“The world will depend on oil and gas
for a long time still and the measures
taken by certain consumer countries in
the form of too high taxes on oil products are likely to be frankly discriminatory with regards this resource, and
this fact is taken into consideration in
our strategy”, explained the Minister.
With regards the protection of the environment, Algeria “is already setting a
good example” given that it has been
extracting CO2 from gas for years, he
specified.
To a question on Algeria's contribution
to the Riyadh Summit, Mr Khelil indicated that Algeria's contribution has
particularly resided in the drafting of
the final declaration itself, “particularly
by bringing the points of view together
around the central issues”.
For the President of OPEC, “Algeria
has played a very positive role in the
drawing up of OPEC's long term strategy and has particularly focused on
the protection of the environment and
aid to the support process of disadvantaged countries”, he emphasised.
To the question of knowing whether the
Riyadh Declaration has been the result
of a compromise or of unanimity,
Mr Khelil admitted that the discussions
had been “rich and sometimes contradictory”.
“Some countries, without naming
them, had focused on the devaluation
of the dollar, others a lot more on the
need to support poor countries more,
depending on the interests of each of
the Member States.”
“Overall, we have produced an excellent work of consensus”, concluded the
Minister.
3rd OPEC Summit
The Secretary General of the Organisation
“OPEC wishes to achieve its objectives
and ensure long term stability”
The Organisation of the Petroleum Exporting Countries
(OPEC) wishes to achieve its objectives and ensure long term
stability in the world, indicated, in Riyadh, the Secretary
General of the Organisation, Mr Abdallah Salem El Badri, at
the opening of the works of the 3rd Summit of the Heads of
State of OPEC.
Mr El Badri said he was extremely satisfied with the results
recorded by the organisation since its creation, calling upon
the member countries to continue to take up the challenges in
the future. “We have taken up challenges in the past and we
have to transform the challenges put before us into opportunities of growth and development for all peoples of the planet”, he emphasised. “OPEC’s production capacities have
been greatly satisfactory, leading to harmonious, global development”, stated Mr El Badri, who called for making OPEC
an instrument of prosperity and well-being for everyone.
Key dates
14 September 1960
Creation of the Organisation of the
Petroleum Exporting Countries at the
Baghdad Conference upon the initiative
of Iran and Venezuela, joined by Saudi
Arabia, Iraq and Kuwait, to stop the
decline in the price of oil, which was at
less than 5 dollars a barrel.
1961-1973
Qatar joined OPEC, then Indonesia and
Libya in 1963, Abu Dhabi and Algeria in
1967, Nigeria in 1971 and finally Gabon
and Equator in 1973. OPEC’s headquarters transferred from Geneva
(Switzerland) to Vienna (Austria) in 1965.
October 1973
Right in the middle of the Israeli-Arab
war, OPEC decides to increase prices.
An embargo is decreed by the Arab
producer countries against the countries supporting Israel. Prices quadruple
in a few months. This was the first oil
crisis.
January and March 1975
The OPEC countries decide on a 10%
increase in the price of oil in January,
whereas this organisation’s 1st summit is
held in March in Algiers.
March 1982
First fixing by OPEC of the production
quotas, limiting production to 18 million
barrels/day in order to maintain the
prices.
August 1990-February 1991
Crisis, then the Gulf War, the UN imposes an embargo on Iraq.
December 1992 and June 1996
Equator withdraws from OPEC invoking
a financial crisis, followed by Gabon in
1996.
December 1997
OPEC raises its production by 10%
during its meeting in Jakarta, causing a
40% collapse of the prices. The price
per barrel falls to 10 dollars. OPEC restores the quotas.
March 1999
The eleven member countries, as well
as Russia, Norway, Mexico and Oman
decide to reduce their production by
2.1 million barrels/day. Prices increase
to 23 dollars in September.
September 2000
The Caracas Summit, second in the
history of OPEC, marks the organisation’s return to the international scene.
Angola, Mexico, Norway, Oman and
Russia are invited as observers.
September 2003
Iraq returns as a full member within
OPEC.
August 2006 and October 2007
For the first time, the barrel reaches the
level of 76 dollars, and then 100 dollars
in these last few weeks.
The main petroleum producers and consumers
Whereas the barrel of oil is approaching 100 dollars, Saudi Arabia is still the number one producer country, but followed closed behind by Russia, whereas the United States is still the number one consumer. Here is a table of the main producer and
consumer countries, in 2006, drawn up with the figures of the American Energy Information Administration (EIA). The figures
are expressed in millions of barrels/day (mbd).
Producer countries million mbd
Producer countries million mbd
Consumer countries
Saudi Arabia
Russia
USA
Iran
China
Mexico
Canada
United Arab Emirates
Venezuela
Norway
Kuwait
Nigeria
Brazil
Algeria
Iraq
USA
China
Japan
Russia
10,72
9,67
8,36
4,15
3,84
3,71
3,29
2,94
2,80
2,78
2,67
2,44
2,16
2,12
2,00
million mbd
20,59
7,27
5,22
3,10
Energie & Mines
107
january 2008
RD
OPEC Summit
SUMMIT
3rd3OPEC
AlgeriA
A sector in the midst
of exponential growth
It is estimated that Algeria owns proven oil reserves of 11.8 billion barrels, no.
15 in the world, and proven gas reserves of 4.5tcm (160tcf). However, analysts
consider that Algeria’s hydrocarbon reserves’ potential is under-explored.
Recent gas and also oil discoveries and
the plans put into action concern new
prospecting drilling. The gas and oil
reserves’ estimates are likely to grow
considerably in the coming years.
The commercial production of natural
gas in Algeria started in 1961.
In 1997, Algerian natural gas production exceeded that of crude oil for the
first time. In 2004, Algeria produced
82 billion cubic metres (bcm) (2.9tcf)
of natural gas, i.e. fifth place in world
production and the first among OPEC
members. This production constituted
54% of total hydrocarbons’ production
in Algeria.
In 2002, Algeria consumed 20bcm
(0.72tcm) of natural gas, i.e. some
26% of its production. The government
encouraged the domestic use of natural
gas, which represented 63% of the
country’s total energy consumption in
2002.
Thanks to the rapid substitution of oil
products by natural gas in the use of
domestic energy, Algeria must expect a
significant growth in its crude oil
exports in the coming years. Algeria is
striving to extend its natural gas trade
more and is active in the quest for
foreign investments in this sector. In
order to increase the production of the
associated natural gas fields, the
Algerian government has announced a
ban on natural gas flaring as of 2010.
Algeria is a major natural gas exporting
country. It is a founding member of the
Gas Exporting Countries Forum which
is comprised of a group of 15 gas producing countries, created in Tehran in
May 2000.
Algeria exports gas to its main clients
which are Europe and the United
Energie & Mines
108
january 2008
States of America. In 2002, it supplied
a fifth of the EU’s natural gas imports,
i.e. in second place behind Russia.
The structure
of the hydrocarbons’ industry
In the last few years, there have been
several new gas discoveries, mainly by
international companies: Algeria’s oil
sector, unlike most of the OPEC producing countries, has been opened to
foreign investors. Algeria hopes to
increase it gas production capacity
significantly in the coming years, by
attracting more foreign investments.
The Algerian government’s objective is
to double the number of companies
operating in Algeria, to restructure the
local gas and oil industry and to put in
place new regulation organisations,
independent of the Ministry of Energy
and Mines. Sonatrach dominates the
natural gas production and wholesale
distribution in Algeria, whereas a
second State company, Sonelgaz,
controls the retail distribution. Algeria
has increasingly allowed foreign investments in this sector which is striving to
become
increasingly
important.
Foreign gas producers have signed
several partnership agreements with
Sonatrach.
There are also plans to enable foreign
participation in the Algerian natural gas
retail sales sector.
The legislative
and institutional framework
The Algerian Energy sector is placed
under the aegis of the Ministry of
Energy and Mines (MEM). Legislative
changes since 1991 have encouraged
3rd OPEC Summit
investment in oil and gas prospecting
by world petroleum companies.
Algeria has set up a new Hydrocarbons
Act. This act stipulates, inter alia, that
the company Sonatrach is a commercial entity which will compete with the
international petroleum companies for
the prospecting and production
contracts.
The new act creates two independent
agencies to control and regulate the
hydrocarbons’
sector,
the
Hydrocarbons’ Regulation Authority
(ARH) and the National Agency for the
Promotion
of
Hydrocarbons’
Resources (Alnaft).
The ARH is responsible for supervising
the regulations in the domain of prices,
third party access to the gas pipelines
and storage, industrial safety, environmental protection, the application of
technical standards in accordance with
best international practices and the
putting in place of a system of penalties
and fines.
Alnaft, for its part, has been created in
view of promoting investments in prospecting, maintaining the prospecting
database, initiating the appeals for tenders and evaluating the tenders related
to the prospecting and production activities, determining the prospecting
regions and ensuring the application of
production contracts. Alnaft is also
responsible for determining and collec-
ting royalties and also ensuring the
payment of taxes (including those paid
in case of gas flaring). The introduction
of reforms in the hydrocarbons’ sector
is considered to be a crucial stage in
view of achieving Algeria’s objective to
increase its production.
The domestic
gas pipeline systems
The Algerian domestic gas pipeline system is based around the Hassi R’mel
gas field. The most important gas pipeline systems connect Hassi R’mel to the
liquefied natural gas (LNG) exporting
terminals
located
along
the
Mediterranean coast.
A 507km pipeline system connects
Hassi R’mel to Arzew, whereas another
580km system connects it to Skikda. A
shorter gas pipeline goes from Hassi
R’mel to Issers, near Algiers.
Hassi R’mel is the centre of Algeria’s
natural gas transportation network.
The gas pipelines of the country’s entire gas production regions are connected to it. A 970km gas pipeline
connects the region of In Amenas; a
531km gas pipeline connects the
region of In Salah and a 145km system
crosses the Gassi Touil gas fields.
The exporting gas pipelines
There are two gas pipeline systems
connecting Algeria to Europe.
The Trans-Mediterranean gas pipeline
(Transmed, also called Enrico-Mattei),
of a capacity of 66mscmd (2.32bcfd),
crosses a distance of 1,079km over the
Algerian territories, from Hassi R’mel,
via Tunisia and Sicily, to Italy.
An international consortium, led by the
Spanish company Enagas, SNPP
(Morocco) and Sonatrach, has commissioned the Maghreb-Europe gas
pipeline (GEM), also called PedroDuran-Farell of a length of 1,610km
and
capacity
of
23mscmd
(820mmscfd). The GEM has been
operational since 1996.
It connects Hassi R’mel to Cordoba in
Spain, via Morocco, where it is connected to the Spanish and Portuguese operating and distribution networks.
In July 2001, a consortium led by
Algeria concluded an agreement to
start the feasibility study of a new gas
pipeline which will connect Algeria to
Europe: Medgaz. Medgaz should
connect Béni Saf, in Algeria, to
Almeria, in Spain, with a potential
extension to France. The project is
underway and will be completed in
June 2009. It will have an initial capacity of 11mscmd (390mmscfd), reaching up to a maximum of 44mscmd
(1.55bcfd).
In 2002, Sonatrach signed an agreement with Enel (Italy) and Wintershall
(Germany) to study the feasibility of
Galsi.
The aim of this consortium is to construct another gas pipeline connecting
Algeria to Italy. The current plans
concern the construction of a gas pipeline starting at Hassi R’mel to El Kala,
in the Algerian east, then an underwater section to Cagliari, in Sardinia. This
will be followed by a terrestrial section
as far as Olbia, in Sardinia, to be
connected to the final underwater gas
pipeline as far as Pescaia in Italy.
Galsi’s initial capacity, which runs over
1,465km in length, is estimated at
22-28mscmd (770-990mmscfd). This
2-billion dollar project will be completed in 2008.
Energie & Mines
109
january 2008
RD
OPEC Summit
SUMMIT
3rd3OPEC
Crude oil prices
The main threshold levels (United States), since 1970
1970
The official price of Saudi oil is fixed at
1.80 dollars a barrel, according to the
American Department of Energy (DoE).
May 2004
The 40-dollar threshold level is broken
through once again for the first time on
the New York market.
1974
The price at which refineries purchase
imported oil exceeds 10 dollars a barrel
after the first oil crisis (OPEC embargo
during the Yom Kippur War).
September 2004
The 50-dollar level is broken through;
the market is concerned about oil supplies..
1979
The value of imported oil exceeds 20
dollars, whereas the revolution in Iran
has just broken out, causing the
second oil crisis.
1980
Oil is bought by American refiners at
more than 30 dollars for the first time
and increases up to a face value of
around 39 dollars at the start of 1981,
in the middle of the Iran-Iraq war.
1983
oil prices start to be listed on the New
York Mercantile Exchange (Nymex).
End September beginning October 1990
Oil prices make a short foray above 40
dollars a barrel before the Gulf War.
June 2005
The barrel pushes through 60 dollars.
End August 2005
The 70-dollar threshold level is reached, when Hurricane Katrina hits the
Gulf of Mexico.
12 September 2007
The barrel of Light Sweet Crude
exceeds 80 dollars; the market is
concerned about the thawing of
American petroleum stocks.
18 October 2007
Before session opening, the barrel
breaks through the 92-dollar level, supported by threats of Turkish military
intervention in Iraq and new
Washington sanctions against Iran.
31 October
Prices successively break through the
94-dollar and 95-dollar levels, after the
publication of a heavy decline in
American stocks and the Federal
Reserve's decision to cut its interest
rates once again.
1 November
For the same reason, the 96-dollar
threshold level is broken through.
6 November
The level of 97 dollars is, in turn, achieved given speculations of a new drop
in American reserves.
7 November
Fear of another drop in American
reserves pushes the barrel above 98
dollars.
According to analyst estimates, if the
barrel were to break through 100 dollars, this would be its record price in
real times, i.e. inflation- and exchange
rate-adjusted. This is around 102 dollars a barrel.
29 October
The 93-dollar level is exceeded under
the effect of a temporary reduction
of Mexican production due to bad
weather.
The Algerian Abderrahmane Khène
honoured
The Algerian Abderrahmane
Khène,
former
Secretary
General of the Organisation of
the
Petroleum
Exporting
Countries (OPEC), was honoured in Riyadh during the 3rd
OPEC Summit, as well as twelve other people who have occupied this position.
Mr Khène, who managed OPEC
for two years (1 January 197331 December 1974) was handed by the Saudi King, Abdallah
Ibn Abdelaziz, a symbolic medal
rewarding his efforts for promo-
Energie & Mines
110
january 2008
ting the action of the organisation.
The distinction of the former
Secretaries General of OPEC
took place at the end of the opening ceremony of the Riyadh
Summit, in which eleven Heads
of State, including the President
of the Republic, Mr Abdelaziz
Bouteflika, participated, out of
the thirteen member countries
of the organisation.
3rd OPEC Summit
OPEC’s percentage
in world production
The production of the member countries of the
Organisation of the Petroleum Exporting Countries
(OPEC) is currently slightly below the total production
objective fixed at the time of the last meeting of the
Ministers of the organisation last September in Vienna.
This ceiling, which concerns 10 of the 12 member countries, with Angola and Iraq not being subject to production quotas, is 27.25 million barrels/day (mbd).
According to a recent study by a London-based petroleum research firm, the production of these 10 countries
was, in October, 27.08mbd. If Iraq and Angola are
added to this, this reaches 31.11mbd. Angola does not
yet have a production quota as it only joined OPEC in
January, but should have one shortly. As for Iraq, the
situation in the country means that it is not currently
subject to a production quota.
Compared to the month of July 2007, OPEC’s production increased by 370,000 barrels/day for the 10 countries subject to quotas and by 610,000 barrels/day for
the 12 member countries due, in particular, to the
increase in Iraqi production (+160,000 barrels/day) and
Saudi production (+190,000 barrels/day).
Saudi Arabia
The host of this summit, remains the leader of the cartel
Market share of OPEC countries
in world oil production
Historic supply shortages
Production in OPEC countries
Countries
Millions of barrels/day
Quotas
Saudi Arabia
Iran
United Arab Emirates
Kuwait
Venezuela
Iraq
Nigeria
Libya
Angola
Algeria
Indonesia
Qatar
8,8
3,9
2,6
2,45
2,4
2,28
2,19
1,71
1,75
1,38
0,83
0,82
8,94
3,817
2,256
2,531
2,47
2,163
1,712
1,357
0,865
0,828
Oil prices since 1950
Sources: American Department of Trade, IEA, Platts, BP Statistical Review of World Energy, June 2007.
Energie & Mines
111
january 2008
RD
OPEC Summit
SUMMIT
3rd3OPEC
Suleiman Jasir Al Herbish, Director-General of OPEC's Fund (OFID)
“The problem of the environment
may only be resolved if poverty
is abolished”
Mr Al Herbish, can you present to us the institution
you head up?
This fund was created in 1975, at the
time of the first OPEC summit in
Algiers. Its objective is to help developing countries which are not, of course, members of OPEC, or petroleum
exporting countries. To date, we have
managed more than 1,200 projects in
120 countries. And, to date, our fund
has managed some 9 billion dollars of
donations. We help countries in difficulty. Furthermore, we have just sent
almost one million dollars to the victims of the Bangladesh disaster.
Our headquarters is based in Vienna,
Austria.
The OPEC summit has just
decided to do everything to
reduce the impact of pollution on the environment. Will
you be participating actively
in this?
Of course! Our participation is even
more crucial given that, in our
respect, we estimate that the protection of the environment is not a matter of putting in place means to reduce it, but rather we need to fight
poverty and this will be the starting
point from which we can protect the
environment, because people will no
longer need to destroy it in order to
survive.
Now, the fact remains that we would
very much like the member countries
to be “more generous” so that our
action is more effective, with more
resources available to us.
Acknowledgements
H.E. the Ambassador of Peru to Algiers
To His Excellency Mr Chakib Khelil
Minister of Energy and Mines
“Your Excellency,
I would like to pass on my sincere thanks for sending me the Energy and Mines
review which I am certain will be of great interest for the institutions concerned by
this sector, to which I will definitely pass on the information, and for myself.
I take this opportunity, Your Excellency, to renew the assurance of my highest and
distinguished consideration.
Warm regards”
Mr José Beraum Aranibar
Ambassador
Energie & Mines
112
january 2008
Next
summit,
in 2012,
in Libya
The Minister of Energy and Mines,
Chakib Khelil, confirmed in an
interview with the APS that the
next summit of the Heads of State
of the Organisation of the
Petroleum Exporting Countries
(OPEC) will take place, in 2012, in
Libya. Some subjects not dealt
with during the Riyadh Summit, as
well as the one related to the
account currency of the organisation will be submitted to the next
meeting of the Heads of State, the
fourth since the creation of OPEC
in 1960. The previous two summits were held in Algiers, in 1975,
and in Caracas in 2000.
markets
OPEC-IEA meeting in Bali
Asian countries are the source
of the strong increase in world
energy demand
The economic development of Asian
countries and its impact on world energy demand were the main topics of the
joint meeting which the experts of the
Organisation of the Petroleum
Exporting Countries (OPEC) and
those of the International Energy
Agency (IEA) have just held in Bali.
The works enabled them to establish
that China’s economic growth is one of
the main factors explaining the strong
increase in world energy demand.
Now ranked number 4 in terms of the
world’s greatest economic powers,
China saw a two-digit growth rate estimated at 10.7% in 2006.
Its oil imports increased by 18% in the
first quarter of this year, whereas its
exports saw a 30% increase – a rate
which particularly corresponds to this
country’s rate of sales of automobiles.
India is also seeing a big expansion
with a growth rate which reached 9.2%
in 2006, mainly boosted by the services
sector.
The strong dependency of these two
countries on oil has led them, just like
Japan and South Korea, to record
significant progress in terms of energy
efficiency.
The participants at the Bali meeting felt
it necessary to undertake more indepth studies in view of understanding
better the region’s economic development and thus limit the uncertainties
related to this development and predict,
more accurately, the world energy
trends.
In this respect, the experts agreed to
reinforce the cooperation between the
International Energy Agency and the
Organisation of the Petroleum
Exporting Countries, which has become the main supplier of the Asian markets.
The latest forecasts of the International
Monetary Fund (IMF) predict sustained growth of world oil demand, estimating that this could reach 95 million
barrels/day by 2012, in spite of the new
records reached by crude prices.
The executive director of the IEA
“No one can challenge a State’s right
to control its resources”
The executive director of the International Energy
Agency (IEA), Mr Claude Mandil, emphasised that “no
one can challenge a State’s right to control its (energy)
resources”, in an interview to the review Pétrole et Gaz
arabes (PGA).
To a question on the establishment of a new oil and
energy nationalism among the producer countries, the
IEA director stated that “no one can challenge a State’s
right to control its resources, to define the ways it will
award permits, if it wishes to do so, and to choose its
partners”. “The energy resources are the property of a
national community and it is the responsibility of the
State to manage this wealth in the interest of this community”, he said to PGA, which is the review of the
Centre arabe d’études pétrolières (CAEP), based in
Paris.
Mr Mandil did however specify that “this type of nationalism is not the prerogative of the producer countries and
is not limited to oil”, emphasising that “the consumer
States are not beyond any reproach if we think, for
example, of the gas and electric industries within the
European Union”. He felt that “more dialogue is needed,
as is looking for new types of relations between the
national petroleum companies and the international
companies” in order to “develop new projects”.
Furthermore, to a question on the causes of the upsurge in oil prices, Mr Mandil felt that “political factors must
not be made an alibi”. He stressed the fact that “world
energy consumption is increasing year in year out by 2%
a year”.
“When OPEC says that the oil market is well supplied,
this is true”, he noted, wishing however that “the refineries work more to be capable of satisfying demand this
winter”. According to analysts, the increase in OPEC
production, such as desired by the IEA, does not tally
with the current economic climate, particularly due to the
depreciation of the dollar, the risks of the United States’
economy slowing down this half year and due to worries
increased by the subprime crisis and by the consequences of this on the energy sector and the financial
markets.
Energie & Mines
113
january 2008
MARKETS
markets
The EU dispels the risk of “insecurity”
of energy supply in Europe
in the short term
The European Union (EU) is dispelling
any risk of “insecurity of energy supply
in Europe in the short term”, further to
the increase in oil prices on the international markets. “We know now that
this is a structural increase and that, in
the short term, we are not likely to have
any insecurity of our energy supply”,
stated the spokesman of the
Commissioner for Energy, Mr Ferran
Tarradellas Espuny, during a press
meeting.
He did, nevertheless, warn that “there
is an urgency (for Europe) to take measures”, insisting, in this respect, on the
need to “increase European energy
efficiency”. To do this, he recalled, in
“2006 we decided to reduce energy
consumption by 20% and increase socalled proper energies (renewable energies)”.
“The more renewable energy we produce, the less we will continue to
depend on energies which are becoming scarce (oil and gas)”, he insisted.
On the recent estimations of the IAEA
which has revised the deadline of the
upcoming exhaustion of oil reserves
(from 2037 to 2015), due to an increase in Chinese and Indian demand, Mr
Ferrane explained that “this is one of
the reasons which has pushed the EU
to work on reducing its energy dependency”. “We want to achieve the three
objectives of the energy policy, which
are competitiveness, sustainability and
reduced dependency”, he further insisted. For her part, commenting on the
decision of the French President to
temporarily exonerate the social contributions of fishermen who are enraged
due to the upsurge in the price of diesel, the spokeswoman of the
Commissioner for Fishing, Mireille
Thom, feels that “it is incompatible
with the European directive on the
recovery and restructuring plans of
companies”.
According to analysts, the observed
increase in the price of fuels in the
member countries of the EU is not the
result of the increase in the prices of
oil, but rather the result of the high
taxes which are applied to these products.
These taxes represent 2/3 of the price
of the fuels, with the price of a litre of
petrol currently reaching up to 1.4
euros.
Mrs Thom, in this respect, recalled the
statements made by the Commissioner
in charge of the sector, Joe Borg, who
feels that “this way of settling the problems by subsidies is not the best, and
that it would be good to deal with the
real problems, i.e. the restructuring of
the fishing sector”.
The EU has confirmed that the increase in oil prices recorded on the international markets “has not had negative
effects on the European economy”.
The Governor of the ECB
“The strong euro is cushioning the negative
effects of oil prices”
The Governor of the European Central Bank (ECB), the
Austrian Klaus Liebscher, indicated that the strong euro
might help to cushion the negative economic effects of
the increase in oil prices in the countries of the euro zone.
"The strong euro has cushioned us from recent crude oil
shocks”, recognised Mr Liebscher, also Governor of the
Central Bank of his own country, during a conference in
Vienna on economic integration in Europe.
Energie & Mines
114
january 2008
The ECB Governor also emphasised that this institution
did not plan to intervene on foreign exchange rates.
The stability of prices in the medium term is the main
mandate of the ECB, he recalled in response to demands
from politicians and industrialists in favour of a reduction
of the rates in order to attempt to cope with the upsurge
of the euro against the dollar.
markets
Threat to prices and the environment
if demand does not slow down
Energy consumption should surge by 55% in the world by 2030 without new measures
to slow it down, with a risk of an “escalation of prices” and “alarming” consequences
on the environment, warns the International Energy Agency (IEA).
74% of the upsurge in global demand
will come from developing countries,
particularly India and China, which will
become the world's number one energy
consumer “shortly after 2010”, in front
of the United States, forecasts the IEA
in its annual work energy outlook
report.
Hydrocarbons should still, by far, be
the number one source of energy,
without an alternative energy being
capable of competing with them: oil
demand should increase by 37% by
2030, to 116 million barrels/day (mbd)
compared to 84mbd in 2006.
Such a pace will be accompanied by
“an uninterrupted increase in CO2
emissions”, which might entail “a 6
degree increase” in temperatures
beyond 2030, with “irreversible”
consequences on the environment, estimated Fatih Birol, director of studies of
the IEA, questioned by the AFP.
Another threat: that of an “increased
dependency” on the producer countries, mainly Russia and the
Organisation of Petroleum Exporting
Countries (OPEC). If, in theory, the
world's energy reserves are sufficient to
cope with demand, this is only if the
investments required to increase the
supply are granted, specified the IEA.
The IEA prices these at 22,000 billion
dollars, 5,000 billion of which for oil in
order to increase the production capacities and improve energy efficiency.
The report emphasises that OPEC
plans in total 90 projects for some 200
billion dollars which should increase its
production to 61mbd in 2030 compared to 36mbd in 2006.
The market share of the cartel would
then increase from 42% today to 52%
in 2030, reinforcing its influence whereas, in comparison, production outside OPEC should increase more moderately.
If the planned investments are made,
the IEA forecasts a barrel of crude oil
priced at 108 dollars in 2030, a relatively hardly alarmist hypothesis, whereas the barrel is already close to 100
dollars today, and even considers a fall
to 70 dollars towards 2015.
But without sufficient investments, by
2015, “a supply-side crisis” is possible
with, as a corollary, an “escalation in
prices” with “major consequences on
the economy, particularly in the poor
countries”, emphasises Mr Birol, who
insists on the urgency of the situation.
Coal is the source of energy whose
demand should increase the most
(+73%) by 2030, and its market share
should represent 28% of world
consumption by this date. The market
share of natural gas should also increase and represent 22% in 2030.
In the current state of affairs, the
nuclear energy supply should only
increase slightly (+0.7% per annum)
and even see its market share reduce
from 15% currently to 11% in 2030, if
the policies targeting an exit from
nuclear energy in Germany, Sweden
and Belgian are pursued.
But Mr Birol notes “an increasing interest” for this “clean” energy from the
point of view of greenhouse gas emissions and means of reducing dependency on hydrocarbons, with projects
particularly in China and India which,
if they are adopted, would stabilise the
market share at 15%.
The agency upholds that by applying
policies encouraging the renewable
energies and energy efficiency or developing nuclear energy, global demand
would only increase by 1.3% per
annum instead of 1.8% and would enable 14 million barrels a day to be saved.
Algeria is in a good position to deal
with a potential fall in the price of oil
The director of the IMF for the Maghreb, Middle East and
Central Asian region, the Tunisian Amor Tahari, stated in
Algiers that Algeria was “in a good position” to deal with a
potential volatility of oil prices on the international market.
In its report on regional economic outlooks, this executive of
the IMF highlighted, during a press conference, “the healthy
economic policy followed by the Algerian authorities and the
series of reforms which will protect Algeria in case of volatility in the oil prices in the world”.
The representative of the international financial institution
did however suggest a diversification of the national economy “by using all its resources for the creation of jobs”, which
will enable it, in his opinion, to reduce, albeit to a small
extent, its dependency on hydrocarbon exports.
“Algeria is on the right path, the report is positive”, as
emphasised in the last IMF report on Algeria (2006). This
finding is based on the achievements which the country is
obtaining within the framework of “ambitious development
programmes” but also on the nature and the scope of the
reforms initiated”, added the regional director of the IMF.
On the banking reforms, Mr Tahari considers that they will
go “in the right direction”, but that “they have to be pursued
and even accelerated”.
Energie & Mines
115
january 2008
ANALYSIS
analysis
The impact of oil prices on
world growth is just a myth
By
Nicolas Sarkis
The economist Nicolas
Sarkis, president of
the Centre arabe d'études pétrolières (CAEP)
based in Paris, has
stated that “what has
been happening for
four years now is diametrically opposed to
the myth which is
upheld on the subject
of the impact of oil on
the global economy”.
“I
s it true that the
increase in oil prices
is, as has been said
and repeated for over
30 years, the main factor or one of the
main factors of inflation?”, asked the
economist in the editorial of the CAEP
review Pétrole et Gaz arabe.
“Despite the new upsurge in oil prices,
the main economic indicators have
been very positive”, he revealed citing
“the GDP growth rates which, instead
of slowing down as we might have feared, have more than doubled between
2001 and 2007.
He emphasised that “just as positive in
this context of strong growth is the
control of inflation”, specifying that
“in the industrialised petroleum exporting countries, the increase in consumer prices was limited to 2.3% in
2005 and 2006, and it is forecasted
that it should fall to 2 or 2.1% in
2007-2008”
Mr Sarkis also revealed that “the analysis over a long period of the annual
statistics published by the IMF do not
enable a mechanical correlation to be
demonstrated between the evolution of
the oil prices, on the one hand, and
inflation or economic growth, on the
other”.
“Hence, during the period 19861999, when OPEC oil prices stayed
under 20 dollars a barrel, average
world growth of consumer prices was
by far higher than what has been seen
since the start of this decade, namely a
strong increase in energy prices”, he
noted.
Energie & Mines
116
january 2008
“No less remarkable are, in the course
of the same year, the sometimes considerable differentials between the
growth and inflation rates in countries
which are all more or less dependent
on imports to cover their energy
needs”, added the economist.
These facts support the belief defended with great song a dance for over
three decades and according to which
the increase in oil prices” would be
ipso facto a major cause of recession
or inflationist tensions”, he deduced,
emphasising that “so much so that
OPEC has ended up appearing a scapegoat accused of all the evils threatening the global economy”, he added.
The economist recalled that “the bitter
attacks launched against this organisation in the aftermath of the increase in
oil prices in 1973 went even so far as
accusing the petroleum exporting
countries of being the “destroyers” of
western economies”, whereas “the
main cause of the crisis which then
shook the global economy was not the
increase in oil prices, but a “deregulation” caused by the financial policies
and the economic management of the
industrialised countries”.
N. S.
markets
Promising deposits along the south-east coasts
Brazil to join OPEC shortly ?
Brazilians soon to be oil
kings… and their country
an OPEC member shortly?
The President of Brazil,
Luiz Inacio Lula da Silva,
after being called an “oil
magnate” by his
Venezuelan counterpart
Hugo Chavez, says that he
dreams of this future for
his country, in the process
of becoming an oil
exporter.
The euphoria is born from the thunderous announcement of the discovery of
immense oil and gas deposits near the
south-east coasts. The company
Petrobras evaluates them between 5
and 8 billion barrels, increasing by half
the current national reserves, which
would propel Brazil among the ten
main producers of black gold, between
Venezuela and Nigeria. Self-sufficient
since 2006, Brazil brought its production, in 2007, to 1.9 billion barrels/day.
The Sao Paulo Stock Exchange welcomed the news by an upsurge in
Petrobras shares, but the national company recalls that studies must still
confirm the hypotheses of these
“mega-reserves”.
Good quality of the resources
This energy treasure would be buried
right in the Atlantic Ocean, 250km
from the coast, under a thick crust of
salt, probably between 5,000 and
7,000m in depth. This is where Brazil
already has about fifteen wells, but
which extracts oil at less than 2,140m.
The oil field is located in the region of
Tupi, which stretches over 800km,
along the States of Espirito Santo, Rio,
Sao Paulo and Santa Catarina.
The Chairman of Petrobras, José
Sergio Gabrielli, estimates that the
increasingly high price of the barrel and
the good quality of the localised resources should compensate for the operating costs. The company, which draws
most of the production from the open
sea, says it is capable of exploring in the
great depths.
At the same time, Dilma Roussef, the
President Lula’s Chief of Cabinet,
announced that 41 of the 312 blocks of
this exploration zone which should
have been sold at the end of November
have been withdrawn from the appeal
for tenders, officially to “protect the
public interest and the national sovereignty”.
This announcement comes in the nick
of time: Brazil, in the midst of growth,
is being questioned about the insufficiency of its energy resources.
Concerns are emerging particularly
with regards the hydroelectric dams
(71% of energy) which are not filled
enough. At the start of November,
Rio’s inhabitants were faced with tensions on the price of gas which, in that
country, is particularly used for running a part of the automobile fleet. To
slow down too strong demand,
Petrobras might increase its prices by
15% to 25%. To cope with this lack of
gas, Brazil is ready to negotiate new
investments in Bolivia.
West Africa
Proposal to create an energy regulation
authority for the Cedeao
The Ministers of Energy of the Economic Community of the
States of West Africa (Cedeao) have proposed the putting in
place of an energy regulation authority.
This proposal, which will be submitted to the summit of the
Heads of State of the countries of this economic group, was
made during the 8th meeting of the Ministers of Energy of
the fifteen countries of the Cedeao. The regulation authority
will have to manage the common energy resources market in
this group, faced with “serious problems" concerning energy
and particularly electricity.
The Ministers also recommended the implementation of a
white paper on the access of rural and peri-urban populations to the energy services.
Furthermore, several Ministers have focused on the need for
the countries to harmonise the trade agreements to achieve
more fluidity in the energy market in the region.
Energie & Mines
117
january 2008
ANALYSIS
analysis
Mr Lamy :
“The Doha cycle will
benefit energy trade”
By
Pascal Lamy (*)
Ladies and gentlemen,
In a speech given in
Rome on 15 November
2007 during the
20th World Energy
Congress, the DirectorGeneral, Pascal Lamy,
said that “more foreseeable and transparent trade regulations
might benefit both the
energy importing countries and the exporting
countries and, besides,
the companies participating in energy trade
and also consumers therefore, everyone”.
He asked the participants to call upon the
governments to “take
energy measures to
run the last mile” in
the Doha cycle. This is
what he stated :
It is a pleasure for me to participate in
this 20th World energy congress, the
vision of you founding father Daniel
Dunlop continues today through the
actions of the World energy council
whose goal - the promotion of sustainable supply and use of energy for the
greatest benefit of all people - is more
relevant than ever.
It is good to see the business community taking the lead assuming its collective responsibility vis-à-vis one of today's
biggest challenges: responding to the
world's exploding need for energy and
its impact on sustainable development.
In our collective search for a better global governance on energy, most now
recognize that market mechanisms
have proved their value. As noted by
your in-coming council chairman, markets remain the most efficient way to
allocate resources. But markets must be
governed by transparent and predictable rules. And this may be where the
WTO, as a forum for the negotiation
and enforcement of multilateral trade
rules has a role to play. The report you
have prepared on trade rules and energy is a timely contribution to this debate.
Today I would like to share with you
how the WTO can contribute to a more
efficient allocation of energy resources
and generally a better trading environment for energy.
Let me start by saying that today a large
part of big world energy actors such a s
Russia, Iran, Kazakhstan, Ukraine,
Iraq, Algeria, or Libya are not yet WTO
Members. Other big players such as
Energie & Mines
118
january 2008
Saudi Arabia and several other Gulf
States, have just recently joined the
organization. It is therefore no surprise
that energy has not been singled out as
a specific sector of trade within WTO.
When the rules of the GATT - which
preceded the WTO - were negotiated
60 years ago, opening trade in energy
was not a political priority. World energy demand was a fraction of today's
and you could buy a barrel of crude oil
for 20$ at current prices.
So the rules of the WTO do not deal
with energy as a distinct sector. Yet
since our basic rulers are applicable to
all forms of trade, they also apply to
trade in energy goods and services. And
these rules can be enforced through the
WTO dispute settlement mechanism
even if they were not negotiated with
energy in mind.
For example, we have a general rule on
transparency mandating governments
to publish domestically all trade-related
regulations and to notify relevant legislation to the WTO. We have a rule that
generally prohibits exports restrictions.
We also prohibit discrimination on the
basis of origin or destination of products. We also have rules on freedom of
transit, on actions by state-trading
enterprises, and on trade-distorting
subsidies.
In certain circumstances, Members
may invoke exception provisions which
allow them to implement restrictions if
they «relate to the protection of exhaustible natural resources». Under our
security exceptions, Members can
«take any action considered necessary
to protect essential security interests,
including action relating to fissionable
analysis
materials». As you can see many of
these rules can become relevant for
trade in energy goods.
The same is true with respect to our
rules on trade in services. The WTO
General Agreement on Trade in
Services (GATS) covers generality all
services, including energy services and
can protect investments in energy
services.
But we must also recognize that there
are certain specificities of the energy
sector that makes it different from
other economic activities in several
respects.
For instance, physical characteristics of
energy goods affect the way in which
they are transported across borders and
distributed to final consumers. The
existence of natural monopolies, and
the role of state-owned enterprises,
also raise particular challenges.
Existing WTO rules, which were not
negotiated with the specificities of the
energy sector in mind, may not address
appropriately all the needs of energy
trade. Back in the 70s and 80s, governments tried but did not manage to tackle the issues of dual pricing practices
and export restrictions on raw materials. Disputes arose concerning the
exact scope of the transit obligation,
and were eventually settled between the
countries concerned.
The lack of comprehensive international competition rules, and the fact that
government procurement disciplines
apply only to a fraction of the
membership, may also be seen as a
weakness.
Moreover WTO rules are based on a
distinction between goods and services,
but it is not always easy to categorize
transactions as «goods» or «services»
trade, in the energy sector. And, the
nature of some energy products, such
as electricity, is still not clearly defined.
Recently several reasons have led energy to appear on the radar screen of
WTO Members, and conversely, the
WTO to be on the radar screen of the
energy business community.
■ Several energy-exporting countries
have recently acceded to the WTO
(Saudi Arabia, Oman) and others
(Russia, several Central Asian countries, Algeria, Libya, Iran, Iraq or
Ukraine) are currently asking for or
negotiating their accession, bringing
with them a substantial part of energy
trade.
■ With increasing energy needs, issues
relating to the use of international pipelines have contributed to a renewed
interest in the provisions on freedom of
transit.
■ Reforms in the energy sector and
technological developments have created room for private operators, which
has allowed energy services to be identified as a negotiating topic in the Doha
Round.
■ The interaction between trade and
climate change, the role of bio fuels,
and, more generally, increasing energy
needs and concerns surrounding energy security, have also contributed to
raise the profile of energy in the remit
of multilateral trade rules.
WTO rules are living creatures, well
capable of adjusting to changing realities and I have therefore no doubt that
they will evolve to respond to today's
commercial and political needs. We
saw many examples of this in the past.
In the 60s and 70s we had no disciplines on agriculture subsidies.
This issue was introduced in the WTO
during the negotiation in the 80s leading to the Uruguay Round and the
on-going negotiations under the Doha
Development Round will take them a
step beyond, by agreeing to
sharp reductions in trade-distorting
subsidies.
The WTO negotiating agenda is always
determined by its Members, based on
their economic and political priorities.
Once consensus is found on an agenda,
negotiations can commence. This is
true also for energy. But, short of
having a specific agreement on energy
trade, energy already features in the
on-going Doha negotiations which
were launched in 2001.
The first area where energy stands
explicitly on the Doha agenda is the
services negotiations. For the first time
Members are discussing energy as a
specific services sector.
Energy was not addressed in any comprehensive manner during the Uruguay
Round, because the Liberalization of
the sector was not yet on the political
agenda. As a result, WTO Members
undertook limited commitments to
open their markets to foreign operators
in energy services, including services
incidental to mining at ail and gas
fields, services incidental to energy distribution - of, inter alia, gas and electricity - and pipeline transportation of
fuels. However, progressive unbundling of state-owned integrated utilities
and technological developments have
created room for private operators.
This, in turn, has raised the profile of
energy services in the WTO.
The current negotiations on energy
services cover a broad range of activities relevant for energy companies and
span all energy sources, including renewable. Commitments are sought on
activities such as drilling; engineering;
technical testing and analysis services;
construction work for long distance
and local pipelines, and for mining;
wholesale trade services and retailing
services of fuels.
The negotiations are addressing the
establishment of commercial presence
as well as easing the intra-corporate
transfers of specialists and professionals working for energy services
companies.
Furthermore, some Members have proposed to negotiate additional disciplines which would address, for instance,
regulatory transparency, non-discriminatory third-party access to networks
and grids, the need for an independent
regulator, and requirements preventing
certain anti-competitive practices. All
this is already on the table.
A second area of the Doha Round relevant for you relates to clean technology. The Doha Round aims at opening
markets to environmental goods and
services.
☞
Energie & Mines
119
january 2008
ANALYSIS
analysis
☞ Many of these have a direct application
for promoting energy efficiency, such
as material needed for production of
renewable energy, heat management
and pollution control. Examples of
environmental goods that have been
proposed include wind turbines, solar
panels, geothermal energy sensors, fuel
cells and electricity meters. Eliminating
or reducing tariffs on environmentallyfriendly goods and technology would
facilitate their wider dissemination.
Similarly, the negotiations on environmental services include negotiations on
energy-relevant activities, such as services to reduce exhaust gases and improve air quality, nature and landscape
protection services or services for the
rehabilitation of mining sites. The environmental chapter of the WTO Doha
Round can therefore make a very concrete contribution to the promotion of
energy-efficient technologies. It is a
contribution in the making that the
trade community can bring to the
upcoming UN Climate Change
Conference in Bali.
A third area of importance to you
comes under the “trade facilitation”
negotiations. Here Members have been
discussing possible improvements and
clarification to the «transit» obligation
contained in the old GATT rules that
oblige Members to allow passage of
goods in transit across their territories.
This provision was drafted in 1947. In
the current Doha Round, proposals
have been tabled to clarify the meaning
of this obligation and whether it includes fixed installations, such as
pipelines.
Energy-related concerns also underlie
proposals on export taxes and subsidies. There are proposals on the table
addressing export restrictions on energy goods and other raw materials
because these restrictions are more
prevalent than in other traded goods,
and represent a source of concern for
imparting countries as they increase
prices of inputs. The question of subsi-
Energie & Mines
120
january 2008
dies in the form of low-priced energy
products, especially natural gas, has
recurrently stirred hot debates among
WTO Members and is also part of the
on-going negotiations.
Finally, the picture would not be
exhaustive without a word about bio
fuels. While bio fuels can provide us
with the opportunity to address climate
change, energy security and rural development, careful planning needs to be
undertaken to make sure that they do
not create new environmental and
social problems. The negotiations to
cut tariffs and discipline agriculture
subsidies have the potential to contribute to the development of orderly
trade in bio fuels.
Ladies and gentlemen,
Today energy is a global concern, and
SO should be the solutions. The
growth rates in many developing countries will inevitably push up global energy demand. Massive private investments will be necessary to respond to
the needs of new technological
research. Energy consumption will
need to be reconciled with sustainable
growth, if we are to tackle the challenges posed to climate change.
The WTO, with its 151 members, can
make an important contribution to the
complex energy chessboard.
More predictable and transparent trade
rules could benefit bath energy-importing and energy-exporting countries,
and, beyond them, companies engaged
in energy trade and consumers - all
of us.
Market forces can play a key role in the
optimal allocation of scarce resources
and in promoting technological improvements.
Fairer rules of the game may contribute to countering temptations towards
energy nationalism and preventing
eruption of conflicts.
It is clear that fundamental socio-economic choices will have to be made in
the coming years, which will impact
our daily life. The challenge will be to
design a sustainable energy future, one
which guarantees energy security,
while respecting human well-being and
protecting our environment. One that
does not jeopardize development prospects or food security.
The magnitude and the difficulty of the
task calls for building further global
governance.
The WTO can make a positive contribution to this end. This is why concluding the on-going Doha Development
Round is so important for you. Which
is why I would like to ask you to call on
your governments to take bold steps to
run the last mile.
P. L.
(*) WTO director
markets
Chakib Khelil in an interview on Beur TV
“Algeria will opt for short term
gas supply contracts”
Algeria might cancel
long term contracts
for its natural gas
exports and opt rather
for short or medium
term contracts, which
offer better flexibility
in terms of price renegotiations, indicated
the Minister of Energy
and Mines, Mr Chakib
Khelil.
The Minister also mentioned the possibility of developing, to the maximum,
the exports of liquefied natural gas
(LNG) for the same reasons.
"We prefer to move towards short term
(5-10 years) LNG and natural gas
contracts so as to be able to renegotiate prices more easily and, hence, benefit from the gas spot market, once this
is implemented", said Mr Khelil in an
interview on the French television
channel Beur TV.
The Minister made reference to the
dispute with Spain on the price of the
gas delivered by the GME gas pipeline
connecting the two countries to explain
Sonatrach’s possible future strategy in
favour of short term contracts, another
way, in his opinion, of avoiding
Algeria’s “dependency” on its
European clients.
The slowness of the negotiations on the
revision of the gas prices has entailed
losses for Sonatrach, thus forced to go
to international arbitration to uphold
its right to periodically increase its prices, further stated the Minister.
He then warned that the different
clients must now assure that Sonatrach
is given “just and fair treatment at the
desired time”. Algeria currently exports
almost 62 billion cubic metres of gas a
year, mostly for the European market,
and intends to increase these exports to
85 billion cubic metres by 2010.
Questioned
on
the
potential
Sonatrach-Gaz de France (GDF) partnership, a subject dealt with during his
visit to France last November, the
Minister simply said that it was, above
all, a question, during this meeting, of
security of the gas supply. "The partnership with GDF already exists and
the topic of the meeting was to find out
how to guarantee the security of
Europe's gas supply and formalise the
desire of French President Nicolas
Sarkozy of going very far in terms of
nuclear cooperation”, emphasised Mr
Khelil. On this point of partnership
with the French energy companies, the
Minister stated the desire for it to become “more active” in the domain of
exploration.
“French companies are looking for very
safe energy projects and are refusing to
take too many risks” in exploration, he
regretted, putting forward that most
exploration blocks put up for tender are
won by Chinese and Anglo-Saxon
companies.
Mr Khelil further objected to the idea
that Sonatrach would be interested by
the distribution market in France. "We
are interested neither by the distribution nor the control of gas pipelines" in
France, he said.
"This is really not our view of things”,
added the Minister, specifying that
direct access to the French market was
currently assured by the regasification
capacity which Sonatrach was able to
reserve in the Montoir terminal, in
France.
Energie & Mines
121
january 2008
ANALYSIS
analysis
Liquefied natural gas
in favour
By
Claudia Courtois
Soon, three new
methane tanker terminals in French ports
The will to diversify
the energy supply
forces a variation on
importing liquefied
natural gas.
ince last September, three
public debates, sometimes
stormy, have taken place at the
same time on the same subject
on three points of the French coasts:
should or should we not build liquefied
natural gas (LNG) storage and receipt
terminals in Verdon (Gironde), in
Antifer (Seine-Maritime) and in
Dunkirk (North)?
These terminals would receive 150,000
to 300,000m3 vessels loaded with
liquefied methane cooled to minus
160°. The LNG, stored in imposing
tanks, is then heated up to be returned
to its gaseous state before being sent in
gas pipelines to the end client, according to demand.
In France, the only two terminals operating are run by Gaz de France
(GDF). The first, in Fos-Tonkin
(Bouches-du-Rhône) is the subject of
an extension (Fos-Cavaou) for the start
of 2008, financed by GDF and Total. A
Shell extension might also come to
light in 2015.
For the second one, in Montoir-de-
S
Energie & Mines
122
january 2008
Bretagne (Loire-Atlantic), the construction of a fourth tank is planned for
2010. These two sites represent a storage capacity of 17 billion cubic metres
a year, which would increase to 38.2
billion with the extensions.
Of the three projects submitted to
public debate until December, the
Verdon one is led by 4Gas, a subsidiary of an American-Dutch group. It
plans two storage tanks, for an annual
capacity of 6 to 9 billion cubic metres,
for an investment of 450 million euros
and commissioning in 2012. The
second one, in Antifer, associates the
group Gaz de Normandie with a
European consortium (Poweo, E.ON,
CIM, Verbund) and would be commissioned in 2011. The storage capacity
would be 9 billion cubic metres a year.
Finally, in Dunkirk, EDF and the
Autonomous Port plan a terminal with
a capacity of 6 to 10 billion cubic metres for 2012. These two projects are
evaluated at 500 million euros each.
This infatuation with LNG is planetary,
and particularly European: 3 methane
ports are being built in Spain and 7
projects are mobilising the Italians. The
natural gas market is, in fact, heavily
expanding, boosted by the deregulation
of the energy market, whereas
European production, for its part, will
decline: for about twenty years now,
European consumption has grown by
approximately 2.6% a year, and this
rate should continue at least until
2015.
In France, consumption represented 50
billion cubic metres in 2006, i.e. 15%
of the global energy balance, up by
approximately 2% a year since 2000.
“Substitution”
According to the Energy Observatory,
this growth should continue at this level
until 2030 at least. “As long as the renewable energies are not developed, natu-
ral gas will be a substitution for oil”,
assures Florence Tordjman, at the
general division of energy of the
Ministry of Ecology, Sustainable
Planning and Development, invited to
three public debates. But currently,
98% of French production is imported
via international gas pipelines, coming
mainly from Norway (29%), the
Netherlands (19%), Algeria and Russia
(16% each).
“The gas pipelines are an element of
the great rigidity in the relations between suppliers and consumers, we read
in the 2007 report from the energy
commission of the strategic analysis
centre. The development of LNG enables this to be overcome partially.”
This possible diversification of sources
offers better securitisation of the energy supply and, via greater competition
between suppliers, better prices. But
the opponents of these projects doubt
this, as natural gas is indexed to the
price of oil, and its maritime transportation presents the same risks for the
environment as oil. Finally, they argue,
if the different terminals are built,
France could find itself with surplus
storage capacity in relation to its
consumption.
C. C.
In Le Monde
markets
Gas consumption has increased ten-fold in three decades
in the Mediterranean
The APS organises a Workshop
on energy cooperation
The gas consumption of the
Mediterranean countries has increased
at least ten-fold, going from 27 billion
cubic metres (GM3), in 1971, to about
290GM3, in 2005, according to the
data provided during a workshop on
energy
cooperation
in
the
Mediterranean, organised in Algiers by
the APS at the time of the 16th general
meeting of Mediterranean press agencies. This increase has naturally resulted in gas’s strong contribution to the
Mediterranean energy balance, thus
representing 26% of total energy
consumption in this vast region, in
2005, compared to barely 6% in 1971.
Gas consumption must still develop in
the coming years, given the large availabilities of natural gas but also the specificity of this fossil energy deemed to
be one of the most economic and least
polluting, with many applications other
than fuel (heating), particularly electric
generation.
However, stated the Secretary General
of the Algerian Ministry of Energy,
Mr Fayçal Abbas, the economic option
consisting of extending the use of gas
to several applications depends on the
development of the interconnected
Mediterranean network in the gas and
electricity sectors.
He thus noted that efforts to promote
this interconnection between the region’s countries have been made, both in
the gas sector and in the electricity
sector.
In the gas domain, numerous interconnections through gas pipelines have
been developed and others are under
construction.
For the region of Maghreb, these relate
to the following operating gas pipelines: the Transmed (Algeria-Italy via
Tunisia), and the Maghreb-Europe
connecting Algeria to Spain via
Morocco, for a total of approximately
35 billion cubic metres/year.
There is also the Green Stream Gas
Pipeline connecting Libya to Italy with
a capacity of 8 billion cubic
metres/year.
The capacity of these three gas pipelines should be reinforced by the construction of three other pipelines directly connecting the Maghreb region to
Europe.
The first of these three projects under
construction is the Medgaz gas pipeline
connecting Algeria to Spain, of a total
length of 750km and annual capacity of
8 to 10 billion cubic metres.
The second is the Galsi project, a gas
pipeline connecting Algeria to Italy, of
a length of 900km and a capacity of
8 billion cubic metres.
The last project is the Trans-Sahara
Gas Pipeline (TSGP) of a length of
more than 4,100km, which will route
gas from Nigeria to Europe via Niger
and Algeria.
According to Mr Abbas, this gas pipeline’s feasibility study “has been completed and has concluded on its feasibility”. It is planned to be opened in 2015.
Further to the east, in Machrek, the
interconnection is assured by the
Egyptian gas pipeline, the TransMachrek, which connects Egypt to
Jordan and, later on, to Syria and the
Lebanon.
For the LNG production chains designed for exporting, Algeria alone has 4
liquefaction plants.
Two others will be built – one in Arzew
and the other in Skikda – as a replacement of the production capacities destroyed, in 2004, in this industrial zone
of the Algerian East, reported the SG of
the Ministry of Energy.
Other Mediterranean countries have
developed these LNG exporting infrastructures, particularly Libya and Egypt.
Libya has a general plant in Marsa
El Bargua, whose extension it plans,
whereas Egypt has an LNG plant created in 2005.
In the domain of electricity, the development of the interconnections used in
the Mediterranean has enabled a
“considerable” increase of international
electricity trade.
In 2005, the total volume traded between the Mediterranean countries and
their neighbours reached 237 terawatts/hour (TWH).
The South bank alone has several electric
interconnection systems, including
Algeria-Morocco (2 connections of
225KV each), Algeria-Tunisia (4 connections), Morocco-Spain
(1 connection of 400KV) and a second,
underwater one, is planned, TunisiaLibya (a double 225KV line and one
line planned) and Libya-Egypt (a double 225KV line and another 400KV one
planned).
For the Machrek countries, there are
several electric networks connected to
each other:
Egypt-Iraq, Jordan-Lebanon and
Syria-Turkey. Turkey and Bulgaria are
connected also by two 400KV lines.
The Spain-Morocco connection has
enabled the interconnection of the
south and north banks of the
Mediterranean, whilst awaiting the new
Algeria-Spain and Algeria-Italy underwater cables, the doubling of the
Spain-Morocco line and the TunisiaItaly interconnection projects.
According to specialists, these new projects will also enable the main countries
of the south of the Mediterranean to be
interconnected, then to be connected to
the European network to connect
to the Mediterranean electric loop
expected for 2008.
Energie & Mines
123
january 2008
MARKETS
markets
Despite the on-going dispute
Creation of a Euro-Russian
early warning system
The European Union and Russia have agreed, in Brussels, to create an
“early warning system” within the framework of the Euro-Russian dialogue on energy, but the dispute on the EU bill forcing the “unbundling” of
the activities of gas transporters and distributors and on the notion of
“reciprocity” is still on-going.
According to the Russian Minister of
Energy and Industry, Mr Viktor
Khristenko, visiting Brussels, this system will operate in two phases, separating the strategic issues from the subjects of misunderstandings between the
two parties.
The first phase will consist of exchanging information and organising
consultations on “strategic issues” on
the new legislative acts, new energy
strategy or significant modification of
energy supply and demand conditions.
The
second
phase,
added
Mr Khristenko during a press conference, deals with exchanges on issues
which might give rise to difficulties in
terms of energy supply and demand.
Despite the assurances on the “success” of this Euro-Russian collaboration meeting expressed by the
European Commissioner for Energy,
Mr Andris Piebalgs, the dispute continues on at least two fundamental
issues.
The Russian party, in fact, rejects the
European Commission’s initiative to
force the property separation of
transport and distribution companies
operating in the EU, also dubbed the
“Gazprom clause” (which aims to close
the European distribution market to the
Russian company whose majority shareholder is the Russian State).
Mr Khristenko wore two hats as an
energy and a political “professional” to
express his rejection as a “professional”
of this Act, awaiting the experts to draw
up an in-depth diagnosis, which will be
the basis of Russia’s political decision.
But the publicly displayed disagreement
will not fail to weigh on the dialogue
between the two parties, even on the
Energie & Mines
124
january 2008
directive itself, on the understanding
that Russia cooperates closely with the
companies of important European
countries (the German EON, the
Italian Enel, the French Total and the
Anglo-Dutch Shell in particular).
But at the “professional” level, without
going as far as to describe as “stupid”
this directive proposal made by the
Chairman of Gazprom, Mr Khristenko
nevertheless feels that this approach is
“wrong”.
Whilst for the electricity networks
(with the separation already effective in
the EU), the situation is more simple,
this is not the case for gas as “the production and distribution cycles, the
risks and the structures are different”.
Furthermore, argues the Russian
Minister, the electricity market is short
term and the electric networks are
more flexible than those which enable
the gas to be routed to the consumer.
For gas, given the depreciation timeframes and therefore the investment protection timeframes, and given the volume transported over exceptionally long
and expensive distances, the market is
long term.
The second topic of disagreement, an
integral part of the first, is that Moscow
and the EU diverge on the notion of
reciprocity. Whilst the EU aspires to
assure greater presence in the Russian
energy sector, mindful of securing the
supplies and participating in the exploitation of oil manna (which is the case
with the main countries), Russia
intends to demand a proportional opening up of the European market to its
companies in the sectors where their
European counterparts operate in
Russia. Mr Khristenko upheld that
investments from European companies
(EON and Enel) reached 10 billion
euros in the last six months alone.
Overall, European investments in
Russia amount to 55 to 57 billion dollars, compared to 7 to 8 billion Russian
investments in Europe, i.e. a ratio of
1 to 8.
“Does this authorise us to invest the
same amount in the EU?”, “Why not
consider that Russian companies invest
in the extraction and operating sectors,
as the firms Shell (Anglo-Dutch) and
Total (French) do in Russia?” asks the
Russian Minister for whom “this is
what reciprocity means”.
In this respect, Russia is considering
participating in joint projects in Italy,
Germany and France, countries where
Russia has good energy relations, specifies the Minister who hopes that the
transport-distribution separation bill
will not hinder these projects.
The Russian Minister further warns
against the breakage of the energy
chain as “segmenting it would run the
risk of breakage and the partners will
be responsible for assuming liability for
this”. Despite these divergences, the
European Commissioner for Energy,
whilst reaffirming the European
Executive’s will to separate the property
of transport companies from those of
distribution companies, and to diversify
its suppliers, considers that Russia
remains a “reliable” and decisive partner.
markets
Furthermore, with regards the
Russian-Ukrainian
conflict
which poisoned the relations with
the EU, the Russian Minister felt
that the question is trade related
and that his country wishes to
establish a stable dialogue with
all Ukrainian partners which it
“knows well”.
Russia now applies to the
Ukraine the same pricing system
for gas as the one in force in
Europe. He states that these problems have now been settled and
that his country will continue to
assure its commitments.
Finally, with regards the repercussions of oil prices on gas prices, the European Commissioner
stated that the EU “does not
need a political guarantee here”.
The supply and the level of
stocks are such that there are no
concerns for this winter. For the
prices, the companies are
responsible for negotiating the
best conditions, even if, for Mr
Piebalgs, these must not be aligned automatically with those of
crude.
As for the Russian Minister, he
upholds that all the price fixing
principles on the gas supply follow the oil price fluctuations. If
we have longer periods of stability in the supplies, “I don’t expect
major price changes compared to
the current situation”.
The European Commission, it
should be remembered, is against
the system to align the price of
gas with the average six-month
price of a basket of crude oil. The
EU and Russia have been involved in an energy dialogue since
the year 2000.
High level meetings are organised every six months. But the
Russian Minister’s unexpected
visit shows Moscow’s concern of
weighing on the project to separate distribution and transport
companies, which thwarts the
Russian investment projects in
Europe, further to the concessions granted to the large
European companies in Russia.
Algeria-EU agreement
on the territoriality
clauses
The European Commission (EC) and
Algeria have concluded, in the last few
days in Brussels, an agreement on the
provisions related to the “territorial restrictions” related to the gas supply
contracts signed with Sonatrach, according to a press release from the
European executive received in Algiers.
The territoriality clause, also called the
“destination clause”, is part of all
Sonatrach gas contracts, preventing its
clients, particularly its Italian and
Spanish ones, from taking the Algerian
gas thus imported outside their borders.
For the European Commission, this
type of contractual provision is “anticompetitive”.
The European Commissioner in this
case, Mr Neelie Kroes, and the Algerian
Minister of Energy and Mines, Mr
Chakib Khelil, “reached a mutual agreement of “understanding” on the clauses
related to the territorial restrictions and
the profit sharing mechanism on the gas
supply contracts to Europe”, specifies
this source without further explanations.
According to the press release, both
parties congratulated each other on this
result, considered an “additional step in
reinforcing the strategic relations in
force between Algeria and the European
Union”. The agreement was concluded,
further specifies the same source, “after
a long discussion during which the
European Commission’s concern about
the competitive aspects of this agreement were discussed at length”.
European Commissioner Kroes thus
emphasised that the agreement represented a “major breakthrough likely to
promote the relations between Europe
and one of its largest natural gas suppliers”.
“The agreement removes a major obstacle to the creation of a common
European gas market”, further stated
the European Commission.
For his part, Mr Khelil, cited in the
press release, indicated that “Algeria
wants to make Sonatrach an active
player in an open, transparent and competitive European gas market”.
Algeria currently assures about 15% of
the EU’s natural gas requirements,
through gas pipelines operating towards
Italy and Spain as well as through the
sale of large quantities of LNG.
Energie & Mines
125
january 2008
ANALYSIS
analysis
Untruths about the creation
of a world gas cartel
By
Dr Mourad Goumiri (*)
If the pretext of the
publication of the BP
world energy outlook
review is the visible
part of the iceberg, it
is to say the least
obvious that the visit
to Algiers or C. Ruehl
(BP economist)
responds to firm
injunctions of opaque
interests in Algeria
and abroad.
L
et’s examine the evidence
concocted by C. Ruehl for the
Algerian elites present at this
“press conference”. Three
reasons are invoked by C. Ruehl to
consider that the creation of a world
gas “cartel” is “inappropriate and unachievable from an economic point of
view”.
The first which, moreover seems the
most solid, revolves around the fact
that the gas market is “regional”. This
idea refers us to the specific problem of
gas transportation which is done mainly by pipelines. This heavy and structural tendency underlies a regional vision
of the gas market, demarcated by the
distance between the production fields
and the consumer countries.
So, we find that C. Ruehl copiously
ignores gas liquefaction and hence its
transportation by methane tankers, a
driving force of transportation which
“globalises” the market. Has not
Algeria exported its gas to Japan and
the United States? Mr Ruehl, not igno-
Energie & Mines
126
january 2008
ring this possibility, attempts then to
limit its scope by citing us a figure
which looks at this driving force in
context, of course, but which, in no
event, eliminates it.
LNG only represents 8% of total gas
production on a global scale. For the
time being, would we be tempted to
reply to him and account taken of the
current and future tensions in terms of
energy (the barrel of oil will reach
USD85 to USD90), that it will take an
increasingly larger dimension in the
world energy balance and that the LNG
weighting in the total gas market will
increase substantially without any
doubt. The only certainty that we can
put forward without too much risk of
mistake, is that the gas market will
consolidate its position in the next ten
years in the world energy balance
and that it will have an international
character.
Furthermore, C. Ruehl says nothing
about the colossal investments granted
for the construction of liquefaction and
regasification plants and for the construction of methane tankers.
This argument alone destroys the erroneous analysis of this chief economist
of BP and makes us question his ulterior motives. His second argument,
namely the lack of a dominant gas producer (just like Saudi Arabia for oil) as
a sine qua non condition to the emergence of a gas “cartel”, is a joke… if he
were not a renowned expert (previously from the World Bank). Indeed, very
large oil producers are not OPEC
members (such as the United States
and Russia) and yet this organisation
has been established with other countries whose objective interests converge. With regards gas, Russia, Iran,
Norway or Qatar (for the time being)
may or may not be centripetal driving
forces for the establishment of a collaboration organisation, insofar as their
current, and particularly their future
interests so demand.
The other producer countries (including Algeria) will contribute their own
capacities as a necessary addition to
achieve a critical mass capable of
influencing the markets. The concerns
of the EU (1) countries and of other
consumer countries as to the creation
of a gas “cartel” are irrefutable proof of
the feasibility and the efficiency in the
medium and long term of this collaboration body.
Finally, the third and final argument
developed by C. Ruehl is the organic
link which exists between gas and oil
(indexing) and which made the "cartel"
superfluous. As we have pointed out
previously in this very newspaper, gas
prices, even if they are indexed to oil
prices, are still the result of a specific
negotiation.
Algeria is justified in knowing this – she
who fiercely negotiates the latter with
all her clients (France, Spain, Italy,
etc.). Let’s remember that a few years
ago these prices were called “political
prices”.
If this automatic reflex displayed by C.
Ruehl was as obvious, how then can the
so difficult negotiations be justified (as
is the case today with Spain)? In fact,
gas is a segment in the world energy
market which, certainly, has an organic
trend link with the oil benchmark price
basket (all other replacement energies
must be incorporated in the analysis)
but remains specific.
But oh, how dreadful ! This is exactly
what C. Ruehl attempts to mask my
developing his untruths and his doubtful analysis. Furthermore, lacking
conclusive arguments, he considers
that a “regional cartel” is likely as the
Russian-Algerian
rapprochement
recently registered proves, to which
(perhaps he forgets) must soon be
added the African reserves of the Gulf
markets
Read in Pétrole et Gaz arabes
of Guinea (awaiting the construction of
the African pipeline).
Apart from the stupidities recited by C.
Ruehl during his press conference, we
should note the attacks deemed against
this idea (Association of Gas
Producers) given that Algeria and
Russia have issued the idea of this.
Iran's rallying to this initiative (Qatar is
hesitating but will get there) may draw
the outlines of the hard core of this
organisation. Hence, the rise to the
front of large gas consumer countries
(current and future) and of their media
networks was awaited. On the pretext
of the concept of “security of supplies”,
some countries do not hesitate to speak
of “energy war” and are starting to
establish scenarios in the event this
“war” goes from fiction to reality (2).
What is therefore incongruous in C.
Ruehl’s report is that he wants to make
us believe and be taken in by the fact
that the world energy market is a simple
economic problem and attempts to treat
it as such! The “political manoeuvres”
which he mentions are not virtualities
but indeed realities which the history of
the Middle East has experienced and
still experiences with a lot of tears,
ashes and blood.
Let’s keep remote-guided simplistic
analyses broadcast in our own country
in the pretext of expertise and sciences.
The truths of some are perhaps the stupidities of others.
M. G.
(*) Founding member
of the Association des universitaires
algériens pour la promotion des études
de sécurité nationale (Asena)
(1) The European Commission insists on the
security of supplies and their diversity.
(2) J. M. Barroso (President of the EU) has proposed to his Parliament “European defence
mechanisms” against non-European companies
(particularly Sonatrach) in terms of investments in
the production and transportation of energy in
Europe.
The Arab sovereign funds:
new major players on
the financial markets
The international economist Nicolas
Sarkis, president of the Centre arabe
d’études pétrolières (CAEP) based in
Paris, stated in the review Pétrole et
Gaz arabes (PGA), published on
1 November 2007, that the financial
affluence of the Arab petroleum exporting countries “is also translated by
activities of the sovereign funds
through which the public authorities of
the countries concerned can establish
themselves increasingly as major
players on the international financial
markets”. Further to the increase in
production “and, furthermore, to the
rapid increase in prices, the oil revenues of the Arab countries surged,
according to the estimates of PGA, to
472 billion dollars in 2006 and should
reach some 520 billion in 2007”, writes
Mr Sarkis in the review’s editorial.
According to him, “this figure represents, in current dollars, more than triple the oil revenues of the same countries in 2002, the year prior to the invasion of Iraq, and almost five times the
levels achieved in 1998 (76.8 billion)
and 1999 (109.5 billion)”.
This “has led to a remarkable financial
affluence which is translated for the
Arab countries by major surpluses in
their balance of payments, defeasance,
the launch of mega-projects and the
accumulation of enormous foreign
exchange reserves which, today, exceed
those of China, Japan and Russia combined”, he notes.
For him, this is translated “by a phenomenal development of financial means
and activities of the sovereign funds
through which the public authorities of
the countries concerned are establishing themselves increasing as major
players on the international financial
markets”.
He recalled that “just recently, these
funds have been talked about a lot with
the acquisition, on 20 September, by
the Qatar Investment Authority of 20%
of the London Stock Exchange for
1.36 billion and the purchase, on the
same day, by the public holding company Borse Dubai of 28% of the
London Stock Exchange and of 19.9%
of the Nasdaq”. He added that “still in
September, the Qatar Investment
Authority announced the purchase, for
470 million, of 10% of the OMX, whereas the Mubadala Development Co,
created by Abu Dhabi, bought 7.5% of
the Carlyle Group for 1.35 billion”.
“In the meantime, Qatar accomplished
a new and great step on the path of
stake-holding for more than 21 billion
of the British supermarket chain
J. Sainsbury Plc”, he continued.
He deduces from this that “all these
new acquisitions are added to those
carried out in the past for the control of
or the stake-holding in western banks
(Barclays, Bear Stearns, etc.), of property and tourist projects, ports,
various industrial companies or others
such as the casino group MGM Mirage
of Las Vegas”. The editorialist mentioned a studied recently carried out by
the investment bank Morgan Stanley,
indicating that “6 Arab countries own
sovereign funds which are among the
20 largest funds of this kind in the
world.
In total, they have 1,557 billion in
assets, i.e. 55% of the total of the 20
largest sovereign funds, estimated at
2,830 billion at the end of September
2007”. According to PGA, “this total
could increase to 10,000 or 12,000
billion by 2015. With assets estimated
at 875 billion, the Abu Dhabi
Investment Authority (ADIA) is at the
top of the list of sovereign funds.
“Whereas, in the past, the petroleum
exporting countries invested a very
large part of their financial assets in
bonds or Treasury notes and in various
western countries”, the investment
strategy of the sovereign funds is
increasingly marked by the concern for
diversification”, he noted.
He thus revealed, regarding Arab
investment flows, a more sustained tendency towards “various property, tourist or other projects in other Arab
countries”, of which “Algeria is one of
the main beneficiaries”.
“This is a very positive development for
the entire world, given the enormous
potential of cooperation and complementarities between the different Arab
petroleum exporting and non-exporting countries”, feels the economist.
Energie & Mines
127
january 2008
MARKETS
markets
12th Summit of the leaders of the gas industry
“Security of supply Versus
security of market” at the centre
of the discussions
The 12th International Gas Summit was held on 17 and 18 October in
Paris. Mr Chawki Mohamed Rahal, vice president Com, participated in
this meeting presenting a report recorded in the session with the theme
of "Security of Supply Vs. Security of market: towards new relations
between the energy actors”. Summary of the main points covered:
Energy security must be conceived in a
global context which must take account
of the security of demand for the producers, the security of supply for the
consumers, the security of supply for
the consumers and also of the security
of transit for the energy transit countries. It must in no way be placed on
one end only of the chain, but across it.
With regards security of supply, Mr
Rahal mentioned the tools which the
European consumer countries have to
guarantee their securities of gas supply,
namely:
■ The LNG route, through the diversification of the suppliers, enables the
transit problems to be bypassed and
Europe’s dependency on imports by
pipeline to be reduced.
■ The existence of a regasification
over-capacity and of a price system
incorporating the seasonal variations of
demand and the weather hazards enable Europe to attract a good share of
the marginal LNG trade (non-contracted cargos) and to provide additional
supply at peak times.
With regards regulations, Mr Rahal
recalled that the EU had set itself
objectives of eliminating the long term
contracts. The dialogue and the collaboration with the producers have enabled the commission to review its position and accept that the contracts are
fundamental for the development for
the gas industry.
Energie & Mines
128
january 2008
The dialogue has continued concerning
the destination clauses and the PSM
clause and once again, through the dialogue, an agreement is concluded between the European and Algerian
authorities.
Mr Rahal nevertheless emphasised that
the gas industry has considerably developed because there was regulatory stability for the duration.
We are currently seeing major changes,
from the regulatory point of view,
which accompany the deregulation of
the markets. This results in a transfer
of risks to the producers which have to
adapt to this situation.
One of the hedges for these risks is
rightly the participation in the gas
downstream and the diversification, an
approach which can only bring stability
to the market.
With regards security of market,
Mr Rahal emphasised that the outlooks
in terms of growth and consolidation of
gas demand both in the emerging
regions and in the mature regions are
considerable.
Nevertheless,
for
Europe’s traditional gas suppliers,
access to the market still remains subject to: (i) a limitation of the diversification possibilities of the “clients-markets” portfolio due to the lack of interconnections, the lack of a unique network code as well as to the mergers
between gas and electric companies
limiting the direct sales to the electricians; (ii) an asymmetrical treatment of
non-European subsidiaries; (iii) the
weight of the “incumbents”.
Mr Rahal ended his speech insisting on
the fact that the traditional suppliers
must demonstrate innovation to overcome the problems related to the security of market, just like Europe which
has succeeded in putting in place the
tools required for the security of these
gas supplies.
Acknowledgements
The Ivory Coast’s Ambassador
to Algiers
To The Minister of Energy
and Mines
“Dear Minister,
I am delighted to acknowledge receipt
of the mail you sent me containing the
seventh edition of the Energy and
Mines review in its English version.
Thank you so much for this.
Yours faithfully,”
The Ambassador,
Sylvestre Aka
markets
Gas
st
Energy of the 21 century
Due to its availability and because it is a clean energy, natural gas is
now considered an energy of first choice for the 21st century. Between
1990 and 2003, this source of energy increased its percentage in the
world energy balance from 22 to 24%. World natural gas consumption,
which will exceed that of coal in the next decade, should almost double
by then.
Recent evaluations converge, confirming the trend of the strong penetration of gas in the different uses. Most
experts expect gas demand to increase
the most compared to other sources of
energy in the next three decades.
Gas trade between countries and continents continues to develop, accompanied by the establishment of modern
transportation infrastructures, such as
cross-border gas pipelines.
EU: growing interest
for Algerian gas
The Europe of gas includes 25 countries which consume 471GM3/year,
i.e. 17% of the world market. Europe
imports more than half its consumption, which is growing by 3% a year. Its
main suppliers are Russia, Norway,
Algeria, Nigeria, Qatar and Egypt. _ of
the gas consumed in the European
Union comes from Russia.
Algeria is one of Europe’s top three gas
suppliers, alongside Russia and
Norway. Currently, more than 95% of
Algerian gas exports are intended for
Europe and, more particularly, almost
40% intended for Italy.
Europe’s supplies of Algerian natural
gas represented almost 20% in 2003.
Algeria currently assures 30% of
European natural gas exports, a volume
that is increasing with the doubling of
the gas pipelines serving Spain and
Italy, namely Medgaz and Galsi and, by
2015, the TSGP. Hence, Brussels wishes to conclude a strategic agreement
with Algiers to guarantee its energy
security.
The EU has particularly shown its interest in establishing a more solid energy
partnership and has advocated reinforced dialogue with Algeria. It proposes
making better use of the mechanism of
its European Neighbourhood Policy to
achieve the objectives of the Union’s
energy policy. At the end of this reinforced dialogue, the EU and Algeria
have agreed to establish a strategic
partnership. From the EU’s point of
view, this dialogue aims to assure stakes in the hydrocarbons’ explorationproduction-transportation cycle so as
to control its supplies and even, in
some cases, a stake in the European
domestic market. Hence, Algeria will
become in the next few years the
second largest gas supplier of the EU
after Russia.
Algeria’s role will be reinforced considerably in this domain to become a
highly strategic and essential partner of
the European Union.
The new European energy policy,
adopted last March by the European
Council recognises, in Algeria, “an
increasing strategic role”, particularly
in terms of liquefied natural gas (LNG)
- one of the priorities of the European
energy policy to assure the security of
its supplies. And Algeria participates
actively in this security of supply. To
this end, Algeria’s reliability as a natural gas supplier to Europe no longer
needs to be proven.
Key figures
■ 3 countries own more than 50% of
world reserves.
Russia (27%), Iran (15%) and Qatar
(14%).
■ 5 countries produce more than 50%
of the gas: Russia (22%), followed by
the United States (19%), Canada
(6.7%), United Kingdom (3.2%) and
Algeria (3.2%).
■ 4 countries assure more than 50%
of exports:
Russia (23%), Canada (11%), Norway
(9%) and Algeria (7%).
■ 6 countries consume 50% of the
world total:
The United States (23%), Russia
(15%), followed a long way off by the
United Kingdom, Canada, Germany
and Iran with somewhat more than 3%
each.
■ 6 countries total up more than 50%
of imports:
The United States (11%), Germany
(9%), Japan (9%), Italy (9%), Ukraine
(6%) and France (6%).
Source : IFP (Institut français du pétrole - French
Petroleum Institute).
Energie & Mines
129
january 2008
ANALYSIS
analysIS
“Even a weakened
dollar still rules”
As the dollar tumbles,
concern is growing
that its weakness may
augur the end of the
62-year reign of the
U.S. currency as the
world's specie of choice for trade, financial
transactions and central bank reserves.
B
ut to paraphrase Mark Twain,
reports of the dollar's death
have been greatly exaggerated. The dollar owes its position as the world's premier international currency to its status as a haven
during times of turmoil, the absence of
a suitable rival, weak domestic demand
in other countries, and plain old inertia.
Geopolitics also plays a role.
If the dollar falls from its perch, which
currency might supplant it? The most
likely candidate is the euro; a widely
traded currency backed by deep capital
markets, a respected central bank and a
large economy. The 13 countries that
use the euro constitute a $10.5 trillion
economic bloc.
Still, the European common currency
has drawbacks: London arguably rivals
New York as a global financial centre
but Britain is not a member of the euro
area.
The euro is also identified more with
the European Central Bank than any
single country and does not command
Energie & Mines
130
january 2008
the national support that other monetary units enjoy. Italian politicians have
suggested exiting the club. Moreover,
European political union is not on the
horizon.
What is more, next to the United
States, the euro area is a military midget, and geopolitical muscle counts. It
is a major reason that oil and other
commodities are priced in dollars. The
sterling's loss of reserve-currency status followed Britain's loss of military
might, its colonial empire and economic primacy.
The United States is also the world's
buyer of last resort, and U.S. imports
are a major engine of global growth.
Other countries have not developed
sufficient domestic demand and thus
rely on exports for growth and employment. To keep their exports competitive, Asian countries, especially, maintain undervalued exchange rates by
buying dollars.
"Conventional theory says the dollar
will only lose its dominance when
countries become saturated with dollar
holdings" and stop buying dollars and
even sell them, Thomas Palley, the
Washington-based head of the
Economics for Democratic & Open
Societies Project, wrote last year. But
"countries have no incentive to sell dollars, as this would kill the golden goose
of export-led growth.”
The dollar fell to a record $1.4752 to
the euro and has sunk to multiyear lows
against the currencies of Britain,
Australia, Canada, Sweden and
Norway.
Buffeting the dollar are the suspicions
of traders that the subprime mortgage
crisis will retard U.S. growth and
prompt the Federal Reserve to cut interest rates further, while other countries
reduce their dollar reserves. To be sure,
the decline of the dollar is eroding its
reputation for stability and as a store of
value. Some also suspect the Bush
administrative is purposefully pursuing
a weak-dollar policy to fuel exports.
Still, dollar depreciation is nothing
new: the currency plummeted in 197779, 1985-88 and 1993-95. From 1978
to 1980, the need to attract foreign
investors prompted the Treasury to sell
$6.4 billion of "Carter bonds", denominated in German marks and Swiss
franks.
The dollar survived these three episodes with its no. 1 status intact. Official
dollar reserves globally fell from 79
percent in 1977 to 49 percent in 1992.
That is back up to 65 percent, with the
euro a distant second at 26 percent,
according to the International
Monetary Fund.
Part of the explanation for the run of
the dollar as the dominant currency of
the world is habit.
"There is a strong inertial bias in favour
of using whatever currency has been
the international currency in the past,”
the economists Menzie Chinn of the
University of Wisconsin and Jeffrey
Frankel of Harvard University wrote in
2005. Sterling was regarded as the
main reserve currency long after
Britain ceased to be the world superpower.
Inertia is a very thin reed on which to
hang dollar dominance. Meanwhile, the
slide of the currency is not winning any
friends.
Published on 12 November 2007 in
the International Herald Tribune
markets
World finance
Subprime, carry trade,
hedge funds: the words
of the financial crisis
When world finance loses its head, commentators can’t make head or
tail of it. Small glossary of the evils of the crisis so as to understand
better the stock market storm triggered by subprime loans.
Subprime loans
Type of mortgage given to households
with an unstable financial situation;
they have enabled an entire category of
Americans to purchase property.
As long as the market increased, a household in difficulty had the possibility
of selling its apartment or its house to
repay its debts. But when the market
turned around, this was no longer the
case.
Furthermore, subprime loans were
often at low interest rates that were
fixed for the first two years before
being adjusted to market rates for the
remaining period of the loan, thus causing repayment difficulties for borrowers at risk.
The crisis spread to the financial sector
through a series of financial instruments created to hedge the risks of
subprime loan institutions. The latter
thus “resold” their loans in the form of
securities issued on the financial markets.
And when the subprime loan institutions found themselves in difficulty, the
value of these securities, greatly coveted by speculators as they had high
interest rates, collapsed.
the nature of their activities to third
parties.
This opaqueness accentuates the difficulty of evaluating the extent of the
subprime crisis. Now, the financial
markets hate uncertainty.
According to some estimates, there are
a thousand hedge funds in the world,
managing some 1,568 billion dollars of
assets.
Leverage
Hedge funds
These are the main players in the current storm, which started with the collapse of two of them, managed by the
bank Bear Stearns. These highly speculative funds exploit the market’s anomalies and the faults of financial regulation to do juicy transactions.
Evolving in the form of “private partnerships”, they are not subject to the
same obligations as other types of
funds and are thus not obliged to reveal
For investors, “leverage” consists of
borrowing large sums of money to
increase the gains expected from their
investments.
Hedge funds use “leverage” a lot,
sometimes borrowing up to ten times
the value owned. But whilst “leverage”
enables the gains to be multiplied, it
can also play the reverse role.
“When you have “leverage” and the
market turns against you, your losses
are amplified. If you fear that the mar-
ket is still volatile, you will therefore
want to reduce your risks”, remarks
Michael Malone, an analyst at Cowen
& Co.
Carry trade
This is the leverage applied on the
international scale. This speculative
practice consists of borrowing money
in a country where the interest rates are
low to investment it in more profitable
foreign assets. In Japan, the interest
rates are only 0.50% which encourages
many investors to borrow capital in this
country.
But with the turnaround of the stock
markets, this practice is become very
risky. To limit their losses, speculators
therefore sell their risky assets and
repay their loans in yens. They thus
increase the value of the Japanese
currency.
Energie & Mines
131
january 2008
SUSTAINABLE development
DEVELOPMENT
Sustainable
Mr Khelil places down the first
stone of the electric production
hybrid plant in Hassi R’mel
In the gas region of Hassi R’mel, in the
place named Tilghemt, in the wilaya of
Laghouat, the Minister of Energy and
Mines, Mr Chakib Khelil has placed
down the first stone of a hybrid plant
using the sun and natural gas to produce 180MGW of electric energy.
On site, the Minister focussed on the
importance of the project, the first on a
global scale, which will, according to
him, enable gas turbines to be combined with solar energy to become, eventually, a substitute for gas.
This first hybrid plant, one of four
plants planned on a national scale, will
use the Hassi R’mel gas, in addition to
solar energy, to maintain the electric
production at night-time and in cloudy
weather. This hybrid plant, which stret-
ches over an area of 152ha, will use
giant parabolic mirrors over an area of
18ha with 100m2 solar panels to generate current.
This project, estimated at more than
350 million dinars, should be ready in
2010 and will enable, in the long term,
according to experts, solar-based electric energy to be exported to Europe.
This plant will also have a research centre which will study the methods likely
to reduce the costs of solar energy.
By starting the works of the energy
plant, the Minister has for a long time
insisted on the necessity of using solar
energy as a replacement of fossil fuels
which are pollutant and on the way to
extinction. This plant, which will be
constructed by a Spanish company,
Aben-Geo Business Group, specialised
in renewable energies, is part of the
sustainable development framework
and will also reduce greenhouse gases.
It should be pointed out that more than
twenty villages and communities located in the south and the far south
(Ghardaïa, Tamanrasset, Illizi and
Adrar) use photovoltaic solar panels to
get their electric power supplies.
Before this the Minister, accompanied
by the Spanish Ambassador and local
authorities of the wilaya of Laghouat,
attended, in the conference room of the
Sonatrach zone of Hassi R’mel, the
presentation of the project’s construction and production process of the
hybrid plant.
The Hassi R’mel electro-solar plant
A huge step for
the country’s future
“As of today we are preparing
alternative energies so that, in 20
or 30 years’ time, our children do
not have energy worries.” Dr
Chakib Khelil, Minister of Energy
and Mines. December 2006.
On Saturday, 3 November 2007, the Minister of Energy,
Mr Chakib Khelil, placed down the first stone of a hybrid
plant using the sun and natural gas to produce 180MW in
the Hassi R’mel gas region. This project is the first on a
global scale combining gas turbines and solar energy. Solar
energy is designed to replace gas eventually, he said. He
insisted on the necessity of using solar energy to replace
polluting, non-renewable fossil fuels that are on the way to
exhaustion. The plant is part of a programme of four
hybrid plants whose construction is planned in Algeria.
This first plant will stretch over an area of 152ha and will
Energie & Mines
132
january 2008
use giant parabolic mirrors over an area of 18ha with
100m2 solar panels each to generate electricity. The plant
has to start in 2010 and may, eventually, enable electricity
to be exported to Europe, according to the project. The
plant includes, as an annex, a research centre to study the
methods of reducing the costs of solar energy. Its construction has been entrusted to the Spanish company
Abengoa, a specialist in renewable energies. With one of
the largest potentials of hydrocarbons’ reserves of the
Mediterranean Basin, Algeria is not, in principle, concerned about being had over if imagination prevails.
Especially given that its exposure, at the doors of the
Sahara, to regular, powerful sun confer to it, at a time
when the photovoltaic production technologies are making
great steps, undeniable energy advantages.
This type of project is the first in the world to combine gas
and solar energy. By 2015, Algeria hopes to increase the
percentage of renewable energies in the electric production
balance to 6%.
Sustainable development
Advantages of solar energy
The Minister of Energy stated that “our country considers
this industrial experiment a laboratory that will enable us,
in the future, to launch and manage other projects”. The
head of Abener took the floor to say that “Algeria is a strategic country for his Group. We will reinforce our relations
further”. For his part, Noureddine Bouterfa, Chairman &
CEO of the Sonelgaz Group, indicated that “this project
marks a concrete milestone which is the start of our energy future trends based on the diversification and the combination of sources, on fossil fuel savings and on the development of a sustainable energy system supported by the
great national solar potential”.
It should be pointed out that Algeria’s solar potential is still
the largest of the entire Mediterranean Basin with
169,440TW hour/year, i.e. 5,000 times Algeria’s electricity consumption and 60 times the consumption of the
Europe of 15 (estimated at 3,000TW h/year). As a reminder, Rwanda inaugurated a solar plant in June 2007; it
should enable this small country of Central Africa to
increase its electricity production by 250 kilowatts a year.
The construction timeframes have been set at 33 months.
This project is part of the programme to develop renewable energies, adopted by the Electricity and Gas Regulation
Commission (Creg). The same programme plans for the
construction of other plants in the south of the country for
a total investment of around 2.9 billion dollars.
The plant should be ready in 2010, and the objective will
then be to export 6,000 megawatts of solar energy to
Europe by 2020, i.e. a tenth of the current electricity
consumption in Germany. “Our thermal solar energy
potential represents four times the world energy consumption”, states Tewfik Hasni, director of New Energy Algeria
(Neal). Africa’s second country due to its size, of which
over 4/5 of its territory is desert, Algeria receives enough
sun to cover 60 times over the needs of Western Europe,
according to the Algerian Ministry of Energy.
“Algeria’s solar potential is enormous as the solar radiation
is high and there is a lot of land for solar plants”, summarised Eduardo Zarza Moya, an expert from CIEMAT, the
Spanish Public Energy Research Centre. “The price of the
land is low and there is also the labour.”
Algeria already uses photovoltaic solar panels to supply
electricity to 18 isolated villages of the Sahara and similar
facilities should supply 16 other communities by 2009.
In the case of Hassi R’mel, this means producing current
on a wide scale. This first hybrid plant, one of the four
planned, will use natural gas, abundant in Algeria, in addition to the sun to maintain the production at night-time
and in cloudy weather. The plant will product current for
domestic consumption and will house a research centre to
study the methods of reducing the costs of solar energy.
The Spanish firm Abener, which won an appeal for tenders
to construct, with Neal, this site evaluated at 425 million
dollars (310 million euros), will own 66% of it. The hybrid
plants will use so-called concentrating solar technologies
(CST) in which the sun’s rays warm fluids to operate a turbine producing the electricity.
Algeria hopes to build three other hybrid plants generating
400 megawatts each by 2015. Solar energy is in the process of making its silent revolution. Photovoltaic energy is
in the process of overcoming its legendary lack of profitability. Thanks to the continuous increase in the price of a
barrel of oil ($95 today) and to the massive investments in
photovoltaic research, the solar solution is becoming accessible to numerous communities, including the planet’s poorest ones. Solar refrigerators in Ghana, the solar taxi in
Manhattan, recycling of old computers into panels at IBM,
this quick list does not fail to demonstrate that, compared
with nuclear energy, requiring massive investments and
heavy institutional structures, solar energy perfectly suits
the development of a community, a decentralised economy,
on a human scale: anyone can decide to be an electricity
producer overnight.
For some tens of thousands of dinars, a battery and solar
panels will advantageously replace the old electric generating sets. The projects are not failing, in the most remote
rural communities; access to solar energy also means
access to the information highways: the example of the cell
phone shows that before forcing people to go to the shanty towns, the transfer of solar technology offers civilisations
still preserved in urban drama an opportunity of contacting
the modern world by limiting damage to progress.
Experts believe in solar energy in the long term. According
to Franz Trieb, of the German Space Agency in Stuttgart,
by 2020 the cost of collecting the energy might be equivalent to paying only 15 dollars for a barrel of oil. “In 2020,
we will have a considerable capacity of CST installed in the
world and this will lead to cost reductions”, he said. “The
distribution systems will increase the cost a little, but not
too much”. According to the International Energy Agency,
the renewable energies, with the exception of hydroelectricity, represent only 2% of global electricity. But if fossil
fuels should remain dominant at least until 2030, investments in renewable energies have increased from 80 billion
dollars (58 billion euros) in 2005 to 100 billion (73 billion
euros) in 2006 in the world.
Energy and the creation of wealth
The development of renewable energies has become unavoidable due to rarity, but also due to the spectre of climate changes. We therefore have to exploit these opportunities. However, in Europe, a wave of panic in consumers,
cleverly supported by the governors, is tending to designate more or less directly the oil producing countries. What
does this mean exactly? For several days now, in fact, the
price of crude oil has reached historic highs in the United
States, i.e. 97 dollars. North Sea oil is also increasing and
exceeds 92 dollars.
These prices correspond to the December deliveries. The
causes are known: the risks of Turkey’s intervention in
Iraq, added to the tropical storm which is reaching the Gulf
of Mexico are making traders edgy, and no analyst anymore rejects the idea of a price of the barrel at 100 dollars.
This increase will have repercussions very quickly at the
pumps in the European countries. ☞
Energie & Mines
133
january 2008
SUSTAINABLE development
DEVELOPMENT
Sustainable
☞
However, OPEC only represents 1/3 of the oil suppliers;
2/3 are constituted by the States and the multinationals
which, in passing, are becoming wealthy in conditions that
were unimaginable a few years ago. One multinational earned 17,000 dollars a minute a few years ago; since then, it
has tripled its earnings; same thing for Exxon whose earnings are around 100 million dollars a day!
We know the “mechanical” influence of the prices of raw
materials on finished products. But, economically, how
does this happen? Hence, we have, very recently, seen the
increase in raw materials such as wheat and milk which
have had an impact on the price of bread and yoghurt,
which should, necessarily, surge.
Except that when the percentage of milk in the cost of
yoghurt is 4%, the impact of a doubling of the price of milk
only justifies 4% of the finished product and not the 20%
imposed on us. Manufacturers, distributors and retailers
are making the most of this to rebuild their margins with a
superb alibi: “It’s not us, it’s the prices of the raw materials.” This is, overall, the same scenario for petrol. The
increase in the price of the barrel led the price of a litre of
petrol to its record in 2006: 1.34 a litre. It is also that year
that the oil companies refining and distributing petrol made
historic profits… On a litre of petrol priced at 1.28, taxes
represent 0.86, i.e. 66% when the price of crude oil itself is
only 0.31, i.e. 24%. 66% taxes!
As a comparison, in the constitution of the price of petrol
in Canada: taxes: 34%. Clearly this is the State that takes
the largest margin. Furthermore, it is this famous TIPP
(domestic tax on oil products) which has caused French
fishermen to demonstrate.
Energie & Mines
134
january 2008
Renewable energies are a formidable opportunity in the
industrialised countries for creating job-creating companies. This is a golden opportunity for thousands of university graduates if, within the framework of the 2030 strategic energy plan, such as for example the “Environmental
Grenelle” in France, it has given the opportunity to these
young people to create their start-up with the State’s help
within the framework of the Marshall Intelligence Plan,
which has nothing to do with "tach’ghil chabab" – a charitable donation given by the Ministry of National Solidarity
through the caliph in the form of CDD at DZD5,000 (50
euros for an engineer less than 800km from Europe’s
coasts). This method naturally perpetuates assistantship
and increases the frustrations on sharing annuities. This
new-look Ansek will not be a bottomless pit; the young
entrepreneur has to prove himself and must be supported
not only financially, but also technologically. He can create wealth by investing in niches which will be the subject of
continual appeals for tenders in all niches where the knowhow is within our grasp.
As an example, all domestic hot water is obtained from the
combustion of natural gas whereas the putting in place of
a solar water boiler will enable a real market to be created
which is not likely to dry out. The Aprue has already clearly matured in the matter. For example, our Tunisian neighbours have clearly understood the utility and the profitability of the project; they have even managed to get this project financed by international organisations. Each calorie
saved by the non-use of natural gas is a calorie available for
the future generations.
However, a solar water boiler, even a basic one, is more
expensive than a natural gas water boiler; the State could
pay for the differential - the depreciation will be quicker
than the price of gas following the price of oil which will be
increasingly important.
We will get it, we will need a cap, need to know where we
are going, how to make energy savings, before being “good
pupils of the industrialised countries”. Let’s think of the
future generations; once again we need an energy strategy
where each citizen is recognised through the discussions
because, in the end, the citizens will be responsible for the
failure or the success of the project through their adhesion
or refusal to subscribe to it once, again, decisions are made
without their agreement.
Pr Chems Eddine Chitour
Comments
The sun
and technology
W
By
Liès Sahar
With the commencement of the works of
the hybrid solar-gas
plant in Hassi R’mel,
the renewable energies’ sector has just
formalised the launch
of a project which will
mark Algeria’s energy
future.
hilst our country currently has major potentials in terms of hydrocarbons,
potentials
which enable it to cover its energy
needs and export it to finance its development, the fact remains that this
potential is not renewable and that one
day or other it will not be large enough
to cover the loads it currently bears.
The crisis which is currently shaking
the energy sector in the world and the
tension being experienced by fossil
energies have made it essential to
develop alternative energies and renewable energies such as solar energy.
The solar potential in Algeria is equivalent to 60 times the consumption of
the Europe of 15 (G15) and to 4 times
approximately global consumption
and there is enough room to have solar
panels which are used to store the
energy.
In the case of Algeria, solar energy is
available on a large scale and the choice of a hybrid facility is the first stage
towards large scale use of solar energy.
At the end of last year, the project’s
partners succeeded in finalising the
project’s financial package for the
Hassi R’mel hybrid electric plant. This
constituted the go-ahead for the start
of the construction of the plant.
And this is not the only project which
is scheduled. Other plants have to be
launched. In parallel, a high-tech business zone has to be constructed.
The objective is to start, as of now, to
work on mastering solar technology.
The segment which would become a
real solar industry might boost the
creation of jobs and bring certain
regions out of their isolation.
The production of solar energy might
be used for both the national
consumption and exporting, given that
several European countries have already set themselves importing objectives
for the energy produced from renewable energies. This market share may be
won if the training and industry sectors are involved in the process. This is
a noble process since, in addition to
the renewable nature of the energy
produced from solar power, this energy is clean unlike the energy which is
produced from fossil fuels.
Investments in renewable energies in
the world increased from 80 to 100
billion dollars from 20005 to 2006.
This shows the importance which the
people involved in the energy sector
are starting to accord to renewable
energies.
Whilst, currently, the cost remains
higher than for fossil fuels, the trend
will be improved by 2010-2020.
And to master the technology, we need
to start this now so as not to fall
behind too much.
L. S.
In El Watan
Energie & Mines
135
january 2008
SUSTAINABLE development
DEVELOPMENT
Sustainable
World Solar Power Forum
The Algerian option for
solar electricity validated
During the World Solar Power Forum, which was held from 24 to
26 October 2007 in Seville, the discussions which brought together
specialists from numerous companies including, in particular, Spain,
Italy, the United States, Germany, France and Algeria (Neal), enabled
the credibility of the Algerian option for the electro-solar component
to be confirmed.
Hence, the strong ideas resulting from
the different reports enabled the emergence of a solar electricity market to be
highlighted.
The development of solar power plants
has, indeed, undergone a remarkable
evolution with:
■ Spain (Andasol I and II with storage).
■ The United States, where, after the
first Californian plants constructed in
the 1980s, the latest 64MW plant has
started operating in Nevada.
After the first plants of 1980 in
California, the latest 64MW plant has
been constructed in Nevada.
The new incentive measures of the
Southern States of the United States,
in spite of the position of President
Bush, have enabled objectives of 4 to
20% of total electricity production to be
targeted for these different Southern
States.
Between 2,200 and 3,200MW of new
solar capacities are planned in these
States for 2007 and 1,000 to
2,500MW in 2008.
The Nevada 64MW plant cost 266
million American dollars.
The costs have actually followed an
upwards trend as for the other electricity production projects.
This has increased the production costs
by almost 25% (-27 USD cents /Kwh).
The use of gas in this latest plant is restricted to 2%. Costs in the United
States incorporate protection against
tornadoes.
The manufacturers have not yet invested, which explains the shortage of
Energie & Mines
136
january 2008
equipment; the new products will only
be available in two to three years’ time.
Reduction of CSP costs
The current high costs are the result of
a reduced supply from manufacturers
that sometimes have almost a monopoly position, just like Schott for the
tubes (receivers). The observation is
that manufacturers are investing slowly. The new productions will only
appear in two to three years’ time. An
association of manufacturers and developers, Estela, has been set up for this
purpose. The costs of solar towers will
also experience price reductions.
Capital market outlooks
The photovoltaic market is bankable
with difficulty as it is fragmented into
small projects.
It is also difficult to differentiate the
products by price.
Wind power has benefited from the
scale effect.
Solar power should see a price reduction. The most important factor is that
it is predictable. It is socially accepted.
It is, however, of a high capitalistic
intensity; it enables financial optimisation. 20MW photovoltaic is around
£9,500/kw in investment. The small
projects will therefore be more expensive.
The internal return rates (IRR), in this
case, are around 7%.
And the cost of electricity is around 30
euro cents/kwh.
Incentive measures
The different German, Spanish and
Algerian approaches are very similar,
except that Spain has limited these
measures to a solar power capacity of
around 500MW for the first programme. After its first programme,
Germany is planning to progressively
reduce the premium, account taken of
the expected reductions of production
costs.
The electricity markets
or how to transport solar
electricity from the desert
to the market
The study by the German Space
Agency, which plans a direct current
network connecting, inter alia, Algeria
to Germany, demonstrates that, in this
case, the efficiency of solar power
would be 90% whereas the hydrogen
component would only give 25%, and
an alternating current line between 55
and 75%.
For a 3,600km line, the investment for
a direct current line would be 1.5
billion euros, whereas it would represent 3.7 billion euros in alternating current. Another speech demonstrated that
the solar component would be cheaper
than the gas component in eight to ten
years’ time.
In 2020, it is estimated that the transfers using direct current should represent 60twh/year, i.e. twice the current
Algerian
capacity,
so
almost
20,000MW of solar capacity.
Sustainable development
The transportation cost using direct
current should represent almost
2 euro cents/kwh.
The Algerian option validated
Prof. Rubia, winner of the Nobel Prize
for Physics, gave a great demonstration on the need to take account of
solar power as an alternative to fossil
energies. He strongly supported the
Algerian option as a source of solar
electricity for Europe.
This forum, in which the delegation of
New Energy Algeria (Neal) took an
active part, has enabled the following
to be confirmed:
■ Algeria’s credibility as a solar electricity potential, particularly after the
commencement of the construction of
the Hassi R’mel 150MW hybrid plant.
■ The objective for Algeria to export
6,000MW to Europe was indeed validated and particularly by the German
Space Agency, given that Germany
has stated a solar electricity importing
objective of around 12,000MW by
2020.
■ The technological decision of CSP
was validated especially given that the
CSP plants have been operating
without problem since 1980 whereas
the other technology (solar tower) has
posed some problems in Spain
(Solucar).
■ The contacts for testing the interest
of the European industrialists in relocating their production to Algeria has
hence had quite positive reactions.
■ The most important information
from this forum is the initiative of the
German Space Agency to refer to its
Ministry of the Environment with the
purpose of applying incentive measures for electricity imported from
Algeria.
2nd Algiers International Conference
on Renewable Energies
To reinforce technical
cooperation
The works of the second international
conference and exhibition on renewable
energies (CEER 2007) came to an end
in Algiers after three days of discussions
and exhibitions.
This meeting, which saw the participation of some 350 Algerian and foreign
delegates as well as 17 companies for
the exhibition, ended with the reading
of recommendations after discussions
focussed on different technical and academic aspects of the development and
promotion of the use of renewable energies (RE).
Hence, the participants mentioned “the
need to reinforce cooperation in terms
of renewable energy development policies both at the Arab regional level and
with the European countries”.
They also recommended reinforcing
technical cooperation with partners
“that have gained solid experience in
this domain”.
For the part related to the incentive
measures for developing RE, the need
“to improve the national regulatory framework” in relation to the RE as well as
“greater State intervention in this sector” emerged from the discussions.
With regards solar energy and its applications in Algeria, the participants
advocated “encouraging international
cooperation for the realisation of largescale projects”. For the RE and sustainable development aspect, the delegates
called for “promoting renewable-source
electricity production connected to the
network”
Concerning the RE industry, they particularly recommended encouraging the
industrial renewable energy projects
and reinforcing the national research
and development capacities to “support
the RE industry”.
Furthermore, national and foreign
experts emphasised the importance of
an industrialisation of the RE sector
with support and encouragement measures. This particularly means “training
the trade associations capable of assuring the sustainability of the infrastructures or even creating a special fund for
RE development”.
In addition, the workshops organised
during this forum enabled a number of
recommendations to be produced particularly related to the need for Algeria to
“diversify its sources of energy, account
taken of the medium and long term stakes”, the creation of a national platform
dedicated to the “different aspects of
hydrogen production” and the putting
in place of a “national standards and
regulatory framework for promoting
and using hydrogen”.
Likewise, the delegates called for the
putting in place of a “national programme that encourages support through
clear objectives and incentive measures”
for the use of solar energy and the creation, within the same framework, of a
synergy between the State, industry,
university and civil society.
The recommendations produced from
these workshops also concerned the
need to involve the private economic
operators in RE development, to “create a National RE Fund added to from oil
taxation and the private economic operators” or even to encourage “the emergence of a national solar industry
accompanied by specific standards”.
The works of the second CEER were
initiated in the presence of the Minister
of Energy and Mines, Mr Chakib Khelil,
of the Minister of State, Minister of the
Interior and Local Governments,
Mr Noureddine Yazid Zerhouni, as well
as representatives of regional and international energy organisations.
Energie & Mines
137
january 2008
SUSTAINABLE development
DEVELOPMENT
Sustainable
Algeria places all its hopes
on the future
The European Union, ready to commit to “a strategic partnership” in the
field of energy, indicated recently an expert from the EU.
Whereas these are the energies of the
future for the planet, the renewable
energies today are a priority both for
the industrialised countries and for the
developing countries.
Mindful of these stakes, Algeria has
incorporated the development of this
option in its energy policy.
The adoption of a legal framework
favourable to the development of these
energies, the construction of major
infrastructures in this domain and the
planning of important projects have
constituted the majority of the efforts
initiated in this sense.
Indeed, the decree on diversification
costs promulgated in application of this
law, that of July 1999, on energy management, stipulates significant advantages for electricity produced from
renewable energies, “prices which may
go up to 300% of the price of traditional electricity, which has enabled, inter
alia, its establishment in some isolated
regions”.
Hence, no less than 18 villages of the
Great South and 3,000 households of
the steppic region benefited from solar
electricity within the framework of the
1995/99 national electrification programme. A second operation of the
same kind will be carried out within the
framework of the 2005/2009 growth
support programme, and will also
concern the solar electrification of 16
villages in the wilayas of the High
Plateaus and of the south of the country. Furthermore, another, just as
important, programme has been realised on behalf of the steppic region of
the High Plateaus, where more than
3,000 households have been electrified
with solar energy and benefit from
solar and wind power-based irrigation
equipment.
The position of these energies has even
been demonstrated by the creation of
the company Neal which has already
launched the project to produce solar
power-based electricity, with a capacity
of 150MW. This project was awarded
Energie & Mines
138
january 2008
to the Spanish company Abener, for an
amount of 300 million dollars. It has
also initiated the construction of a
10MW wind farm in the region of
Tindouf. Hence, the problem resides in
the fact that, financially speaking, the
use of these energies is very expensive,
hence its low use, whereas the exploitable solar power potential is estimated at
more than 169,000TWh, per annum,
i.e. as an illustration, 60 times the
consumption of the Europe of 15.
In addition, and due to its geographic
location, Algeria has one of the world’s
largest solar deposits and the hours of
sunshine exceed 2,000 hours a year.
The energy received daily over a horizontal area of 1m2 is around 5KWh on
most of the national territory.
So, given all these possibilities, the
European Union (EU) has expressed
its desire to enter into a strategic partnership agreement with Algeria in the
field of energy, according to the director of the Executive Agency for
Competitiveness and Innovation, Mr
Patrick Lambert.
Indeed, the expert, who spoke during
the works of the 2nd International
Conference on Renewable Energies,
which was held from 18 to 20 June in
Algiers, emphasised the specific interest attached by the EU countries to the
Algerian energy potential. “We are
ready to discuss with Algeria in order to
reach a strategic partnership agreement
in the field of energy”, he further said,
adding, in this context, that such an
eventuality would reinforce the “interdependence” already existing between
Algeria and Europe in terms of energy
resources and industry. The French
expert went further still, stating that the
cooperation between the two partners
could be based on at least three areas:
“The integration of the Algerian and
European energy policies, the development of infrastructures in this sector
and the exchange of expertise and technologies”. It should be noted that the
Algerian Department of Energy plans
to increase the percentage of these
energies in the world electric production balance to 5% by 2015.
However, and overall, the percentage
of these energies, including in the
world, particularly in electricity production, is still low since even if 20% of
what is produced in the world is from a
renewable source, most of it is still produced from fossil fuels, such as oil or
coal (62.7%) and by nuclear energy
(17.1%). Hence, there is obviously still
a lot to be done, but what is important
is to start somewhere to get on track
for the rest.
Sustainable development
The renewable energy
potential
in Algeria
• The largest potential in Algeria is
solar energy.
• This potential is the largest of the
entire Mediterranean region
• In figures, it is 169,440TWh per
annum.
• The hours of sunshine over
almost the entire territory exceeds
2,000 hours annually and reaches
3,900 hours in the High Plateaus
and the Sahara.
• This performance represents
5,000 times Algeria’s electricity
consumption.
• It also represents 60 times the
consumption of the Europe of 15
(estimated at 3,000TWh a year).
• The average energy received per
KWh/m2/year is 1,700 in the coastal regions, 1,900 in the High
Plateaus and 2,650 in the Sahara.
• Wind energy is not used much,
due to the low average speed of
the wind in the north, unlike in the
south which is somewhat higher.
• The Jura limestone of the
Algerian North constitutes important geothermic reservoirs and is
the source of more than 200 thermal springs, located in the northeast and north-west regions of the
country.
• These are sources with temperatures higher than 40°C, with the
hottest being that of Hammam
Meskhoutine (96°C).
• If we combined the Albian water
production output with the total
output of these sources, this would
represent more than 700MW in
terms of power.
International conference
on renewable energies
The University of Béjaïa,
a future research and
launching centre
One hundred and
seventy reports staggered over three days,
from 25 to 27
November last year,
called upon specialists
from various backgrounds, supported by
different specialised
organisations (the
CDEP, Andru), etc. the
contribution of the
economic operators
ETDE, HNIN.
All this demonstrates that the event
which has created an obsession will
have been one of the most successful.
Days during which the topics covered,
all of an excellent context, will not, in
fact, have been anything more than simple theoretical formulas when we know
that, with regards practice, application,
realisation, etc. little, very little even,
has been done to date.
Whilst for the study aspect, the issue
widely debated reveals no equivocal,
with regards experimentation and formalisation, we are still skimping on the
means to be implemented to realise
large profitable projects that make
contributions in more than one respect.
The Algerian South has benefited
somewhat from a few modest projects
which relate to the electrification undertaken under the aegis of Sonelgaz, as
well as a few sparse and limited programme menus which call for reinforcements or repairs, just like the Gouraya
of Souk El Ténine projects, in Béjaïa,
currently inoperative as they are damaged. Scientific discussions have covered
different aspects. They have all dealt
with the renewable energy technologies
through solar, thermal, geothermal,
wind power, the production of hydrogen, biomass transformation, etc. and a
lot of other processes to which all the
sciences, ranging from mechanics, chemistry, biology to thermodynamics,
accord a certain interest. They intervene, interest a large production and services’ sector such as construction, aeronautics, public works, food, etc. but
also are a great contributor to the environment.
The Djaffri-Saïd auditorium of the
Mira University of Béjaïa saw a parade
of eminences of the “question and speaking with talent, clarifications, fairness… Prof Bacha (Grenoble),
Dr Arkoub (Béjaïa), Dr Gabler
(Germany) and other speakers of the
same rank, of whom we will mention
Tounsi, Rekioua, Moussi, Laoun,
Alkama, all specialists and ardent defenders of the cause.
The fruitful discussions will certainly
contribute to the formalisation of the
large projects which are mentioned with
insistence, just like the continuous
Adrar-Aix-la-Chapelle line, 3,000km
long, which will make Algeria an electricity exporting country by the grace of
the sun.
Energie & Mines
139
january 2008
SUSTAINABLE development
DEVELOPMENT
Sustainable
An Aprue programme designed for construction professionals
Training architects
and contractors in energy saving
From 8 to 11 September 2007, the
Agence nationale pour la promotion et
la rationalisation de l’utilisation l’énergie (Aprue) organised a training session related to energy saving techniques designed for architectural firms
and contractor representatives.
This training course, which is part of
the national energy saving programme
initiated by the Ministry of Energy and
Mines, has set itself the objectives of
initiating the engineering firms in
architectural design incorporating the
energy saving dimension.
It thus aims to explain the passive heating and cooling techniques as well as
the methods for calculating the energy
balances of the architectural projects.
This training course, which will be
coordinated by national experts as well
as foreign specialists, will deal with a
complete series of topics related to the
various aspects of thermal comfort, the
passive heating systems, sunshine
management, the natural cooling systems and the selection of construction
materials.
The foreign experiences in terms of
energy savings in their most recent
terms will be reviewed.
An American study on the elimination of flared gases
Algeria cited as an example
A new study carried out within the framework of the meteorological programme of the American Army reveals that the
equivalent of 40 billion American dollars of gas were flared
last year, which represents 5.3% of total world production.
This data was collected using satellite images in view of
encouraging the producing companies and well as the
governments to reduce the use of flaring.
The study does however show that the awareness-raising
efforts put in over the years have only had very little impact
according to the Financial Times which reports the information.
The total volume of the gas flared is evaluated between 150
and 170 billion cubic metres a year since the middle of the
1990s.
Two large producer countries, Russia and Nigeria, are blacklisted for presenting the highest flaring rates.
The satellite images have shown, according to the American
study, that Russia has burned more than double the volume
of gas flared by Nigeria and that the authorities of these
countries would tend to underestimate the flaring volumes in
their statements. Compared to all producer countries, Russia
would have significantly increased the volumes of gas flared
in the last twelve years, whereas Nigeria, as it has committed
to eliminate the use of flaring in 2008, has presented a considerable reduction in flared volumes, the most significant
compared to all other producer countries, reducing its flaring
rate by a third in twelve years. But the prize goes to Algeria,
presented as an example of the countries that have put an end
Energie & Mines
140
january 2008
to flaring. Alongside Algeria are also models such as Mexico,
Indonesia as well as the European producer countries of the
North Sea.
On the bottom of the scale, Saudi Arabia, China and
Kazakhstan are pointed the finger at for having increased the
flaring rates of their productions.
Finally, it appears that the use of gas flaring has resulted in
the emission of approximately 400 million tonnes of carbon
dioxide (CO2) thus contributing considerably to the pollution and global warming of our planet.
Sustainable development
Wind power
In a conference in Argentina,
wants to believe in its future
The main players of
wind power in the world,
who were at a conference in Mar Del Plata (east
of Argentina), want to
believe in their future in
an expensive energy
world preoccupied by
global warming, even if
there are still many obstacles.
“With growth of 25% a year, we are the
energy industry which is growing the
fastest in the world” stated, to the AFP,
the president of this association, the
Indian Anil Kane. Today, the production capacity of wind turbines in the
world is approximately 75,000 megawatts (MW), but this expert estimates
that this will more than double in the
next three years to 160,000MW. This is
still a drop in the ocean in the 2.5
million megawatts produced in the
world, but the progress is constant and,
above all, the conditions, today, are
very favourable, the oil price is constantly increasing and global warming
demands it.
Germany, today the “world champion”
in this domain, according to Mr Kai
Schegelmilch, one of the officials of the
wind and hydroelectric energy programme at the German Ministry of the
Environment, has considerably argued
its potential in the last few years.
Today, renewable energies, with wind
power in the lead, represent 12% of
total electricity production whereas
they achieved less than 6% in 2000.
Above all, Berlin has set itself the objective of achieving 30% by 2020 and 45%
ten years later, mainly thanks to wind
power, explained Mr Schegelmilch to
this conference.
In Spain, a country that is also very
advanced in Europe along with
Denmark in this domain, the government has also planned to increase its
wind-origin electricity production
capacity to 22,000MW in 2010, i.e. the
capacity of Germany today, compared
to 13,000MW in 2007, indicated the
Spanish Secretary of Energy, Mr Ignasi
Nieto. To get there, the Spanish State
guarantees “fixed long term remuneration” paying a premium of about 30
euros per KW/H to reach a total of
about 70 euros, profitability threshold.
As wind is still expensive compared
with other energy sources, due mostly
to the high cost of wind turbines which
comes to some 2 billion dollars per
megawatt. The cost of a wind turbine
plant is double that of a thermal plant
with comparable power, explained to
the AFP Stefan Gsänger, Secretary
General of the World Wind Energy
Association.
But then, the operating costs are almost
nil with the advantage of never been
thwarted by the volatility of oil prices as
in the case of a thermal plant, he added.
The production costs have, furthermore, reduced by 60% since the 1990s
and the technology continues to be
improved with, for example, blades
capable, thanks to IT, of adapting to the
speed of the wind. The development of
wind power sometimes comes up
against “the lack of political desire” in
some countries, as in France for example which has particularly staked on
nuclear power, but also from populations, according to these experts.
“At each presentation, people balk at
accepting wind turbines deemed to be
noisy and disfiguring the landscape”,
explained to the AFP François Henriet,
who develops wind turbine plants in
Belgian. The most modern models are
rather quiet, but the fact remains that
“wind power still has a bad image”, he
emphasised.
Some emerging countries, such as
China and India do not have these problems and the investments in it are
major. China is currently doubling its
production capacity with the objective
of reaching 30,000MW by 2020
(2,600MW in 2006). India, for its part,
is already the number four country in
terms of wind power with 6,270MW
installed and also hopes to increase its
production capacities considerably.
Energie & Mines
141
january 2008
SUSTAINABLE development
DEVELOPMENT
Sustainable
Prototype
Storing wind turbine energy
to produce wind-free electricity
The discovery promises to help wind
turbines or solar plants to overcome
weather hazards. A team of Australian
engineers from the University of New
South Wales, in Sydney, has found a
way to store electricity in tanks in the
form of liquid. The wind power plant of
King Island, an island in the south of
Australia, has thus been experimenting
since 2003 on a circulation battery
which stores the surplus electricity produced when the wind is strong to
return it when it is low.
This system might remove one of the
obstacles slowing down the development of renewable energies, by enabling them to power the network in the
absence of wind or sun. In King Island,
the thermal generator which takes over
from the wind turbines when there is
no wind has seen its fuel oil consumption reduce by half. “The principle of
these batteries has been known for a
long time, but no one had managed to
bring it to the marketing stage”, said
Maria Skyllas-Kazacos, the chemical
engineer who has been leading the
research of the University of New
South Wales on these batteries for
twenty years.
Unlike traditional lead batteries, the
latter use electrolytes (liquids in which
the battery’s plates soak) which are not
stored inside, but in two outside tanks.
It is when they are put in contact, in a
central tank, that electricity is produced. For recharging, supplying current
from the wind turbines assures the
separation of the two electrolytes,
which are once again stored in their
tanks. The advantage of the circulation
system over traditional batteries resides
in its capacity to supply both a kilowatt
hour as well as several hundreds of
megawatt hours.
The King Island battery can thus return
200 kilowatts of electricity for four
hours. “Theoretically, the storage capacities are unlimited: you simply need to
increase the capacity of the electrolyte
tanks”, states Mrs Skyllas-Kazacos.
The four King Island tanks contain
55,000 litres. To gain space, it is possible to store them underground. A
handful of wind power plants are already testing the system on the Japanese
island of Hokkaido or even in the
United States.
Agreement in Montreal
on protecting the ozone layer
The Montreal conference on the ozone reached an “historic”
agreement to accelerate the elimination of substances that are
harmful for the ozone layer and the climate.
“We have an historic agreement. Elements of this agreement
still need to be finalised, but the developed countries and the
developing countries have agreed on an accelerated action on
HCFCs (hydro chlorofluorocarbons) to the benefit of the
ozone layer and (the fight against) climate changes”, stated to
the AFP Nick Nuttall, spokesman of the United Nations
Environment Programme (UNEP).
The conference of the parties to the Montreal Protocol, which
groups together some 190 countries, started with the main
objective of achieving an acceleration of the schedule to eliminate HCFS, substances that deplete the ozone layer used in
refrigeration and air conditioning.
Their elimination, quicker than expected, will contribute in a
major way, at the same time, to fighting against global warming, as HCFCs are also a powerful greenhouse gas.
The Montreal Protocol, signed in September 1987, planned the
elimination of HCFCs in 2030 for the developed countries and
2040 for the developing countries.
Most of the countries represented in Montreal agreed to bring
forward these deadlines by ten years, but negotiations continued late into Friday on major provisions concerning, in particular, the deadline for producing HCFCs and the steps for
reduction until total elimination.
Energie & Mines
142
january 2008
An arrangement also had to be found with countries such as
China which wanted aid to facilitate the transition towards less
harmful substances for the environment.
According to the UNEP, the acceleration of the elimination of
HCFCs must enable the planet’s greenhouse gas emissions to
be reduced by 3.5%. The conference also marked the
th
20 anniversary of the Montreal Protocol, unanimously hailed
a great success for having succeeded in practically eliminating
a first generation of substances depleting the zone layer, the
CFCs (chlorofluorocarbons), used particularly in refrigerators
and aerosols. The ozone, a molecule produced from oxygen,
plays an essential role in filtering ultra-violet B rays, responsible particularly for skin cancers.
The protocol did not make the hole in the ozone layer disappear, but it did start to deal with the problem and stabilised the
situation. The scientific community now estimates that the
ozone layer might, by 2050 or 2060, regain a state “similar” to
the one of 1980, whereas the hole in the stratosphere (15 to
25km in altitude) reached, in September 2006, the record
dimension of 29.5 million km2. And, without the Montreal
Protocol, some 100 million additional skin cancers would have
been contracted by 2020. But some 88,000 tonnes of substances harmful for the ozone layer continue to be produced every
year, 85% of which in the developed countries.
According to experts, 10,000 to 15,000 additional tonnes are
produced illegally.
Sustainable development
Climate change is already driving
a worldwide economic restructuring
Climate change is already driving a worldwide economic and
industrial restructuring induced by the public regulations and
the actions of companies to adapt to it, according to a survey
carried out with the world’s largest industrial groups.
This survey was carried out by the Carbon Disclosure Project
(CDP), a not-for-profit organisation based in London,
representing 315 large institutional investors such as insurance companies and banks which control 41 trillion dollars
of investment in total.
The report of the CDP, which launched this annual survey
five years ago, should be presented in New York by the former President Bill Clinton, on the fringes of a summit on climate held within the framework of the United Nations.
“This (economic and industrial) restructuring has already
begun to redefine the very basis of competitive advantage and
financial performance for both companies and their investors”, emphasises the document.
“We represent the investors and, on their behalf, we ask the
world’s largest companies to disclose the volume of their
greenhouse gas emissions and also to tell us how they deal
with the risks and the potential represented by climate change”, explained Mr Paul Dickinson of the CDP to the AFP.
The analysis of the responses of the 1,300 companies in sectors ranging from energy to automotive shows that the world’s largest industrial groups “have developed in recent years”
strategies and put in place structures “to reduce potentially
negative financial implications and improve their competitive
positions with respect to climate change”, according to the
report.
As companies in the world continue to manage risk and
improve business models to address climate change, investors are likely to see improvements in financial performance,
assures Mr Dickinson. Pressure on companies to adapt to it
and make the most of climate change comes from investors
“as the latter want to protect their money and make the most
of the future’s industries as soon as possible”, he adds.
According to him, the amount of investments in “green”
energy already amounts to hundreds of billions of dollars.
The countries of the south of the Mediterranean
are turning towards nuclear energy
The countries of the south of the
Mediterranean, whether or not producers of hydrocarbons, are showing
increasing interest in nuclear energy in
order to assure their energy independence in the course of the 21st century.
“The Maghreb countries and Egypt are
showing increasing interest in nuclear
energy as they know that, in the course
of the century, fossil fuels will dry up”,
upheld Jacques Percebois, director of
the Centre de recherche en économie et
droit de l’énergie (Creden) of
Montpellier
(Southern
France).
“Tomorrow’s energy is coal or nuclear,
and as the first poses environmental
problems, it is naturally towards the
second that they are turning in the long
term”, he said to the AFP. At present, the
large majority of electric power plants in
Egypt, Libya and Algeria run on gas
which is found in their subsoil. Tunisia
and Turkey also use the fuel. The
Lebanon and Syria have also opted for
this fuel and Morocco for a combination
of thermal (coal, gas, fuel), hydraulic
and wind energy. Furthermore, the
Algerian Minister of Energy and Mines,
Mr Chakib Khelil, stated before going to
Paris that he would talk about civilian
nuclear energy.
Nicolas Sarkozy stated that France was
“ready to help any country that wishes
to equip itself with civilian nuclear energy. There is not an energy of the future
for the western countries, and eastern
countries which would not be entitled to
access it”.
For its part, in December 2006, Tunisia
concluded an agreement with France for
the peaceful use of nuclear energy. It
plans to build a nuclear power plant of a
capacity of 900 megawatts in 2020. The
Avera group has been approached.
Further to the east, Egypt announced, at
the end of October, its intention to build
several nuclear power plants, re-launching a civilian programme which had
been frozen for 20 years. This would
mean building, by 2022, 4 plants with
total energy “equivalent to 7 million tonnes of oil”. The first should be commis-
sioned in 2017. To the north of the
Mediterranean, nuclear energy does not
get a unanimous vote. On 9 November
last, Turkey voted on a law authorising
the construction of the first nuclear
power plants, after a stormy session. It
wants three plants of a total capacity of
approximately 5,000 megawatts which
should be operational in 2012 to reduce
its energy dependency.
Albania is also considering the use of
nuclear energy to become an “energy
superpower” in the Balkans Region, stated, on 9 November last, the Albanian
Prime Minister, Sali Berisha. This country needs 18 million kilowatts a day and
only produces 5.5 million.
Bulgaria and Romania have power
plants, some of which have had to be
closed, and in Spain nuclear power
assures 26% of the country’s energy.
However, Greece does not use nuclear
energy and, in 1987, Italy voted by referendum to exit civilian nuclear energy:
its four power plants were closed in
1990.
Energie & Mines
143
january 2008
SUSTAINABLE development
DEVELOPMENT
Sustainable
ClimatE
Global warming has little chance
of being less than 3 degrees
The International Energy Agency (IEA)
estimates that greenhouse gas emissions
will surge by 57% by 2030 (1.8% a year)
failing new measures to slow down
energy consumption, which is likely to
entail global warming of at least 3 degrees.
In its latest world energy outlook report,
the IEA deems unrealistic the most
ambitious
scenario
of
the
Intergovernmental Panel on Climate
Change (IPCC) put in place by the UN.
According to this scenario, it would be
possible to contain global warming at
2.4 degrees by 2100 provided that CO2
emissions from energy use level off by
2015 before decreasing.
“CO2 emissions from energy use will
not reach their peak before 2020 in any
of our scenarios” even the most optimistic, emphasises the report.
None of the IEA hypotheses therefore
considers “CO2 emissions consistent
with a stabilisation of the greenhouse
gas concentration in the atmosphere
which would, according to the IPCC,
enable global warming to be limited to
2.4 degrees”, Trevor Morgan, IEA analyst, told the AFP.
With its most optimistic scenario, which
includes the implementation of environmental measures being studied in the
world but not yet taken, the IEA envisages an increase in emissions of only 1%
compared to 1.8% without new actions.
This scenario, which is counting on “a
continuous reduction of greenhouse gas
emissions after 2030”, anticipates a level
of atmospheric concentration of these
gases corresponding to an increase in
temperatures “of around 3 degrees”,
adds Mr Morgan.
“There is an increasingly wider consensus in the world to accept that urgent
and radical measures are required to
lower CO2 emissions in the long term”
so that global warming keeps “within
acceptable limits”, emphasises the
report.
In the current state of affairs, China
would, by far, remain the number one
CO2 emitter in 2030, in front of the
United States, followed by India, the
planet’s third largest polluter as of 2015,
then by Russia and Japan.
Consumption of coal, the main fuel of
India and China, will be the main cause
of the increase in CO2 emissions,
emphasises the report, insisting on the
need for these two countries to reinforce their efforts.
Among the measures to reduce greenhouse gas emissions, energy efficiency is
“the least onerous and quickest means”,
highlights the IEA. The agency also
recommends developing energy saving
practices (switching off lights, favouring
walking or using a bike when possible,
etc.), and favouring other energies than
coal which is the most pollutant.
According to it, CO2 capture and storage, as well as technological research and
development are also promising routes.
The EC proposes a strategic energy
technology plan
The European Commission has proposed a European strategic energy technology plan (SET plan), which aims to combine the expertises, encourage the industries and clarify the
legal framework to favour the clean and renewable energies'
industry.
To achieve Europe's objectives by 2020 and 2050 in terms of
greenhouse gas emissions, renewable energies and energy
savings, the commission feels that measures should be taken
in the domain of “energy performance, standards, support
mechanisms and the pricing of carbon emissions”.
It also feels that Europe, which imported 300 billion euros of
hydrocarbons in 2006 (figure significantly up in 2007)
should reduce the cost of non-polluting energies and place
the EU companies in a peak position in the low carbon intensity technologies' sector - a second in the midst of rapid
expansion.
Energie & Mines
144
january 2008
The plan has to go hand in hand with better use and an
increase of both human and financial resources to accelerate
the upgrading and the roll-out of the future low carbon
intensity technologies. The European Commissioner for
Research and Science, Mr Janez Potocnik, has defined four
priorities to this end, focused on the development of technologies for which community cooperation presents an added
value.
He recommends sharing the resources at the European level,
which is not the case currently, defining the priorities in
accordance with the same objectives as research and focusing
on the programming at the EU level. Once the consistency of
the 27 is established at the political level, this approach has to
be translated into facts by European industrial initiatives
limited to key domains (solar power, carbon capture and storage, sustainable fusion, etc.), failing sufficient financial
means to extend the scope of these projects.
Sustainable development
Innovation
The shortage in terms of innovation
accentuates the backwardness of poor countries
Globalisation, in spite
of the increase in
western investments,
has not resulted in
sufficient technological advances to lift
them out of poverty.
Science, technology and innovation are
not a luxury, but a necessity for the
least developed countries (LDCs). But
the latest annual report on these countries, published by the United Nations
(UN) Conference on Trade and
Development (UNCTAD), states that
their opening up to international trade
has not resulted in the necessary technological advances to lift them out of
poverty.
Now, it is precisely in the domain of
knowledge, a key element in the growth
of the competitiveness and the
conquest of world markets, that these
fifty LDCs – about thirty of which are
in Africa – are still the most deprived,
according to UNCTAD.
“If the LDCs remain isolated from this
evolution, they will be increasingly
marginalised in the global economy,
where competition depends increasingly on knowledge rather than static
comparative advantages drawn from
natural resources”, specified Mr Habib
Ouane, director of the UN division on
LDCs.
Imports of machines and new materials
which would enable the local companies to modernise their production
capacity have slowed down in the last
twenty-five years. Between 2000 and
2005, the LDCs have imported barely
18 dollars of equipment goods per
capita, compared to 207 dollars for the
other developing countries.
Despite the inflow of foreign direct
investment (FDI), these countries
remain confined to the production of
basic products with low added value,
making use of labour with few qualifi-
cations. Between 2000 and 2005, FDI
in the poor countries was three times
higher than in the previous ten years,
but did not however exceed 1% of global flows.
Brain drain
Furthermore, the investments are still
not very diversified geographically:
Angola, Chad, Equatorial Guinea and
Sudan, oil producers, draw in more
than half of the FDI alone. The
European or American transnational
companies established in these countries operate “as enclaves and establish
few ties upstream and downstream
with local companies”, emphasises the
report. Characterised by a strong intensity in capital, the mineral extraction
activities in Africa of these foreign subsidiaries, which export non-transformed raw materials, have little impact
on employment.
As for the increase in FDI in the clothing sector in Asia, this is accompanied by an increase in employment and
exports without a development of the
technological capacities of the companies. “The lack of overlapping in the
national economy means that manufacturing in the LDCs is still dependent on
the existence of preferential market
access conditions”, specifies the UN
agency, emphasising that these may
disappear overnight.
The authors also worry about the acceleration of the brain drain. The migration of the qualified labour of these
countries is especially harmful given
that there are not many qualified
human capital resources. There are
94.3 researchers for 1 million people in
the LDCs, compared to 313 in the
developing countries and 3,728 in the
rich countries, emphasises the report.
UNCTAD recognises that, within the
framework of the structural adjustment
programmes put in place by the financial backers and designed to protect the
macroeconomic balances, the LDCs
have not been able to negotiate flexible
measures to protect their creativity
potential. Indeed, the local governments only spend 0.3% of their gross
domestic product on research and
development, compared to 0.8% in the
developing countries and 2.4% in the
rich countries.
However, the responsibilities are shared. The developed countries have not
been able to put in place for the LDCs
the revenues which assure the success
of their own growth, deplores
Mr Ouane. In the last twenty-five
years, 3.9% of World Bank loans were
intended for scientific or technological
projects for medium income countries
such as Indonesia or Mexico. Out of
the poor countries, only Bangladesh
has been able to benefit from them.
Energie & Mines
145
january 2008
CASE study
STUDY
Case
Biofuels are likely to drive
up agricultural prices
The development of
biofuels may drive up
prices for basic farm
products over the next
ten years, warns a
report on the OECD
and FAO Agricultural
Outlook 2007-2016.
T
emporary factors such as
“droughts in wheat-growing
regions and low stocks”
explain in large measure the
recent hikes in farm commodity prices, emphasises the report by the
Organisation
for
Economic
Cooperation
and
Development
(OECD) and the United Nations Food
and Agriculture Organisation (FAO).
But, “structural changes” such as
“increased feedstock demand for biofuel production, and the reduction of
surpluses due to past policy reforms”
just like that of the Common
Agricultural Policy (CAP) in the
European Union, “may keep prices
about historic equilibrium levels
during the next ten years”, warns the
report.
“Over the outlook period, substantial
amounts of maize in the US, wheat
and rapeseed in the EU and sugar in
Brazil will be used for ethanol and biodiesel production”, which is underpinning “crop prices and, indirectly
through higher feed costs, the prices
for livestock products as well”, it
continues.
Higher commodity prices are “a particular concern for net food importing
developing countries as well as the
poor in urban populations”, warns the
study. Furthermore, “while higher biofuel feedstock prices support incomes
of producers of these products, they
Energie & Mines
146
january 2008
imply higher costs and lower incomes
for producers that use the same feedstock in the form of animal feed”, it
adds. The FAO and the OECD do,
however, emphasise that, given that
“in most temperate zone countries
ethanol and bio-diesel production are
not economically viable without support” the evolution of public action
with regards bio-fuels will be a major
variable in their development.
There are two main bio-fuel families:
ethanols, known also as “bio-petrol”,
which are reserved for petrol engines,
and the bio-diesels, sold under the
name “diester” for the diesel engines.
Ethanols are produced from sugar
beet, wheat, maize and sugar cane.
Biodiesels are extracted from the
transformation of vegetable oils (rapeseed and sunflower oils in France,
soya and palm in other countries),
from which oil esters are obtained to
be mixed with the diesels.
Sustainable development
Adding bioethanol to petrol
becomes mandatory in Austria
Petrol in Austria must now contain
4.4% bioethanol in application of a new
regulation imposed by the European
Union.
This obligation aims to make Austria
compliant with the commitment made
by the 27 member countries of the EU
to bring to 10% the percentage of biofuels in their fuel consumption by 2020
for environmental reasons and in order
to reduce dependency on oil.
Bioethanol is produced from the fermentation of sugar, with the help of
micro-organisms, and its fuel is, in
theory, carbon neutral.
However, the introduction of this new
regulation is arousing criticisms in
Austria, particularly from the Transport
Club, a non-governmental organisation
committed to protecting the environment. “Adding bioethanol to fuel only
contributes slightly to the achievement
of the environmental objectives” of
reducing greenhouse gas emissions,
according to one of this NGO’s biofuel
experts.
She also argues that “the production of
biofuels in large quantities is anything
but bio as this involves the use of industrial fertilisers, large amounts of farming land, and the promotion of genetically modified seeds”.
According to this organisation, reducing pollution above all means “reducing energy consumption” which is
particularly achievable with more efficient engines, stricter standards for the
automobile manufacturers and a targeted policy to promote public transport.
Agro-fuels present a mediocre
ecological balance
The use of agro-fuels will not automatically enable greenhouse gas emissions to be limited, and it would be more efficient
to preserve the natural milieus in a good condition. This is the
conclusion of a study published in the review Science and cosigned by Renton Righelato of the World Land Trust, an ecosystem conservation organisation, and Dominick Spracklen
from the University of Leeds (Great Britain).
The ecological balance of agro-fuels is often criticised on the
basis of the comparison between the energy used to produce
them and the energy they supply. The balance is generally quite
mediocre, if not negative.
But the approach of Renton Righelato and Dominick
Spracklen is more original: they have looked to compare the
carbonic gas emissions saved by the growing of agro-fuels and
those avoided by other uses of the land. By collating a number
of studies, they have compared the balances of the uses of the
land: sugar cane, wheat, corn or beet intended for the production of ethanol or diesel, conversion of tropical forests into
crops, conversion of crops into forests, etc.
For example, growing wheat to make ethanol enables between
0.2 and 0.6 tonnes of carbonic gas per hectare per year to be
avoided by substituting oil. But the conversion in the United
States of crops into pine forests enables (by the increase in
trees) a saving of 3.2 tonnes of carbonic gas per hectare per
year. It would therefore be better to grow trees than grow
cereals designed for fuelling cars.
Sugar cane has the best performance of the existing agro-fuels:
almost 2t/ha of emissions avoided. But this is a lot less than
what the transformation of crops into tropical forests would
enable (between 4 and 8t/ha), and disastrous if sugar cane is
developed by deforestation (which “costs” almost 200t/ha per
year of emissions).
In total, state the researchers, if the policy markers want to privilege the ecological balance, they “may be better advised [in
the short term] to focus on increasing the efficiency of fossil
fuel use, to conserve existing forests and savannahs and to restore natural forest and grassland habitats on cropland that is
not needed for food.
This approach would additionally present advantages in terms
of biodiversity and the health of ecosystems.
Acknowledgements
Amar Telidji University of Laghouat
To The Minister of Energy and Mines
“First of all, it is with great pleasure and immense satisfaction that
I wish, on my on behalf and on behalf of the entire academic community of the Amar Telidji University of Laghouat, to pass on my
greatest thanks for the specific attention and the speed (less than a
week) with which you reacted to my letter dated 19 June 2007, related to the acquisition of an experimental new energy plant (solar and
wind energy). This confirms the interest you attach to science and
knowledge.
Indeed, Mr Foura Ahmed, a representative of Neal, got in touch with
me and then, on 27 June 2007, had a fruitful meeting with two
researcher-professors specialised in the domain of renewable energies. The purpose of this meeting was to explore the ways and
means capable of enabling our young university to commit to mastering these new technologies and to open up more to its economic
environment. Hence, our team of researcher-professors is in the
stage of finalising a complete project with a financial estimate which
will be sent to you shortly.
Convinced of the support the university will find from your humble
self, we commit to use all means, both scientific and technical, for
the smooth running of this project that is beneficial for our country.
The Dean
Yours faithfully,”
Energie & Mines
147
january 2008
INNOVATION
innovation
Agronomics
On-screen plantations
By
Lilia Roger
Calculating the sprinkling, dosing the fertiliser, evaluating, from
ones computer, the
yield from a field
using a software
application: all this is
now possible.
F
inding the best technique for
sprinkling a sunflower or evaluating the yield from a cotton
field is now possible on ones
computer. In Rocquencourt (Yvelines),
researchers from the National Institute
for Computer Science and Control
(Inria), the Centre for International
Cooperation in Agronomical Research
for Development (Cirad) and from the
Central School of Paris have developed
a process for reproducing, in images,
the relationships of a plant with its
environment.
The team led by Philippe de Reffye,
head of the Digiplante project,
confirms that their Greenlab software
application is capable of calculating the
growth of a plant and of deducing from
this its tree structure depending on the
latitude where it has grown and the
amount of water and sun it has
received!
Energie & Mines
148
january 2008
Reproducing nature’s work
Developed a few years ago already, the
“virtual plant” software applications
aim to provide agronomists with a digital tool for their research. Hence, these
programmes are designed in view of
reproducing, as faithfully as possible,
the work of nature. To obtain an adult
tree on their computer screen, computer scientists monitor the growth of a
plant by including in their calculations,
at each stage, the many parameters
which may accelerate it or slow it
down. Greenlab’s originality? This
computer programme is the first to calculate almost instantly the exact
amount of plant materials produced
during the life of plant: as, for all
“ages”, it indicates to scientists the
mass of each branch, root, flower or
fruit. This is a highly complex simulation consisting of permanently evaluating the amount of light received by
each leaf and stem, taking account of
the shade and transparency effects in
the crown, photosynthesis, the nutritional characteristics of the soil or the
water contribution, etc.
It gives a specialist the possibility of
carrying out agronomic studies...
without even moving from ones chair!
The Digiplante team thus announces
that we may soon be able to use
Greenlab to optimise the volumes of
water, fertiliser or pesticides to be
dumped on a field, or even define new
selection criteria enabling an increase,
for example, of the size of tomatoes
produced by a plant or that of
corn-cobs.
Energy
Electric plastic
Photovoltaic panels fifty times cheaper
than those which use silicon? This is
the challenge of a Danish laboratory.
New means of producing solar power
in Denmark, researchers have just
developed solar sensors made of plastic
which can last more than two years.
Today, 99% of the photovoltaic cells
available are made from silicon, using
time-consuming processes. They cost
675 euros per square metre, whereas
the plastic cells cost only 13 euros.
Assembled on panels, they absorb the
energy from the sun’s rays and convert
it directly into electricity.
Naturally, polymers (scientific name
for plastics) are insulating. To make
them electricity conductors, the scientists of the Danish National Laboratory
Riso have made several physical-chemical modifications to them. To do this,
they have taken inspiration from the
works of the winners of the 2000 Nobel
Prize for Chemistry, Alan J. Heeger,
Alan G. Mac Diarmid and Hideki
Shirakawa.
These new plastic cells should make
solar power more affordable. Unlike
the other solutions proposed, the materials used do not have to have great
purity, which considerably reduces the
production costs. The Riso teams now
have a new objective: to improve the
performance of the current plastic cells.
The latter only use 0.2 to 5% of the
solar power received, compared to
12 to 18% for silicon (in the laboratory, this efficiency can reach 35%). The
researchers are also planning to use
this innovation in everyday consumer
products: computer screens, computer
processors which could thus be placed
on-board space probes.
L. R.
In L’Express
Sustainable development
Photovoltaic energy electrification
A social change experiment
in the villages
of the Algerian Great South
The studies carried out on the implications of technical progress on the
populations have revealed the decisive role of technology in improving
physical living conditions and the standard of living of the populations.
By Abedou Abderrahmane (*)
hese studies maintain that the
introduction of new technologies contributes to reducing
poverty by satisfying the vital
needs of the populations. Satisfying the
vital needs means meeting the basic
conditions required for a decent life,
i.e. providing for the social reproduction needs and assuring access to basic
public services such as water, electricity, health, education, information, etc.
It is in relation to this problem of satisfying the vital needs of remote populations that we have specific interest in
the photovoltaic (solar) energy electrification project of the villages of the
South.
The introduction, in the areas of the
south of the country, of this new
photovoltaic technology, considered to
be a structuring technology, has revealed significant progress in improving
the physical living conditions and standard of living of the beneficiary populations of this project. Indeed, it has enabled a meeting of the conditions of
accessing vital needs such as education, access to information, health and
the creation of small-scale economic
activities.
Since the arrival of the photovoltaic
energy electrification programme, the
data from the field survey has revealed
that considerable progress has been
made in terms of improving the physical living conditions and standard of
living of the beneficiary populations.
Our report here will attempt to outline
the significant changes observed both
T
with regards the social structure and
with regards the behaviours of the
social groups. The study of the photovoltaic electrification of the villages of
the south of the country is focused on
analysing the reality of the process of
introducing the electric technology and
its impact on the reconfiguration of life
and local organisation. The initial idea
on which our analysis is founded is
based on the fact that electrification, as
a technical and social process, profoundly modifies the operating rules of
organisations and the way of living of
the populations.
Three working hypotheses
• The photovoltaic project is a means
of accessing modernity. Indeed, the
availability of energy opens up prospects for electric product consumption but also technologies through light
and energy. The use of this source
mobilises a technique, a technology
and new human skills. In other words,
we are seeing the emergence of a new
relationship linking a user, a technology and a service.
☞
Energie & Mines
149
january 2008
SUSTAINABLE development
DEVELOPMENT
Sustainable
☞ • The photovoltaic project develops a
Very small sized villages
The villages of the South present a
group of indices denoting a certain
amount of vulnerability in relation to
the area. The human density is much
reduced and the activities very restricted. Rearing and small agriculture are
mainly used for self-consumption. This
factual element means that most of the
villages are hit by fragility or even limits
to the mass introduction of technologies in the different registers of local
life. The cost/profitability ratio is low.
value of proximity with the organisation. The dimension refers to the establishment of relations with the local
authorities, with the project management company, with the education,
health, telecommunication and administration structures, etc.
Electric energy enables individuals to
exercise their right of citizenship by
accessing the State’s structures that are
brought closer to their vital area. The
introduction of this product enables the
State to supervise the local population
better but also to organise local life
otherwise.
Finally, the project favours the institutional proximity. The availability of
energy contributes greatly to the opening up of remote areas and to the
reduction of the temporal dimension.
To argue these hypotheses related to
the impact in the Saharan territory of
the introduction of photovoltaic technology on the reconfiguration of the
local social organisation, we will mainly rely on the results of the field survey
carried out with a sample of eight (08)
villages. The choice of these villages is
explained by the geographic representativeness of their location (in the
wilayas of Tamanrasset, Illizi, Adrar
and Tindouf), the age of the electrification programme and, finally, the density of the population living there.
Particularities of the electrified villages
The villages targeted by the electrification project are located in the Far
South: wilaya of Illizi for the villages of
Ifni and Immehrou, Indjedid and
Tihoubar; Tamanrasset for those of
Tahifet and Terhanenet; Adrar for the
village of Thala; and Tindouf for the
village of Hassi Mounir.
The electrification project concerned
two social structures; one dominated
by nomadism and pastoralism in the
regions of the Hoggar, where the
Touareg community is located, and in
the region north west of Tindouf,
where the R’gaybet community is
found. The other is marked by settled
populations - in this case, the community of the inhabitants of the ksours in
Talla (wilaya of Adrar). For these two
social structures – nomadic and settled
Energie & Mines
150
january 2008
– the objective of the electrification is
the same: meeting the conditions of
settling peoples and areas. For the
nomads, the stake is to succeed in settling the population within the area. For
the settled populations, inhabitants of
the ksours, the reduction of the desertification of the ksours is the priority.
The electrification of the villages in
question is neither an isolated technical
action nor a neutral public action. It
takes place in structured social organisations which have very deep historical,
anthropological and cultural extensions. Hence, the introduction of these
new electrification technologies using
photovoltaic energy necessarily has
impacts on the beneficiary communities and on the local organisations. The
stake of introducing this new technology (electricity) in the regions of the
Great South resides in the acceptance
or the refusal of the proposed way of
living. Electrification imposes the settling of the populations; now, their way
of living is still dominated by pastoral
nomadism. The project’s gamble is that
the beneficiary populations accept the
technology proposed.
The villages studied are characterised
by two aspects: their small size and
their remoteness.
Remote villages
When we look at the kilometric distance between villages, we note that it is
very reduced overall. However, when
we reduce this distance to time, we
quickly realise that to cross a small distance sometimes requires one day or
more. The distance between the villages
of the same wilaya of the South must
therefore be looked at in context for, at
least, three reasons: first of all, there is
no road network connecting these villages; then, the latter are most often
located far from the strategic roads of
the Great South - the tracks that exist
are local and used by the populations
residing in these locations; finally, the
volcanic and uneven relief of the region
of the South makes it difficult to use
motorised engines. This is why when
we talk about remoteness, we make
reference to the isolation and to the difficulties of accessing the villages.
In relation to this finding, we have
identified two types of villages:
villages we describe as marginalised
and villages we describe as weakened:
The marginalised villages
These villages are mostly enclosed,
located far from the main roads and
large tracks. The marginalisation of
these villages is found in relation to
trade and travelling. Their remoteness
from the capital of the wilaya considerably reduces contacts with the outside.
In these villages, the presence of the
State is reduced to the school and,
sometimes, to the healthcare centre.
Added to this is the fact that these villages have very small populations (we get
the impression that their populations
live in a closed universe) and that the
activity is much reduced there (rearing
and agriculture for self-consumption).
Sustainable development
The weakened villages
These villages are barely integrated.
This category is close to the main roads
and tracks used by travelling tourists.
The particularity of these villages is the
high degree of openness to the outside
(trade and travelling of the population)
but, above all, the relatively high human
density. In these villages, the presence
of the State is visible; this is noted
through the presence of council buildings, the school, the healthcare centre,
the post office, the mosque, the police
station, etc.
What changes have been observed
since the introduction of electricity?
With the application of the electrification project in the surveyed villages,
several changes have occurred, some of
which relating to the area, the local
population, social behaviours, the economy, etc.
Area and project
Whilst, with regards economic activity,
the results have been very weak, with
regards social life, major progress has
been made over the last few years, as a
result of the putting in place of their
photovoltaic energy electrification project. This progress is seen at several
levels: for the population, through the
access to modernity and the opening
up to the outside world; for the authorities, through the opening up and the
rapprochement of the administration in
the territory, through the introduction
of new technologies, etc.
Hence, we can say that the area of the
Great South has changed at least on
three spatial registers from the technological experiment, i.e. the local, national and international levels:
• at the local level, the electrified villages emerge from the fate of other villages by the fact that they have been the
subject of an electrification experiment,
they have been opened up to the outside by the access to information and
they also have a platform for hosting
other services and technologies. In a
word, these villages have been the
receptacle of a new technology which
has triggered an irreversible process of
change in the way of living of the populations and of the social organisation;
• at the national level, these areas are
case studies which could be used as a
model for the generalisation of the
experiment introducing photovoltaic
energy in the remote or sparse regions
as well as in specific sites.
Finally, at the international level, this
project is of great scientific curiosity
which many researchers and specialists
are closely monitoring. This experiment combines two objectives. The
first relates to the introduction of electricity using new and renewable energies (called “NRE”) in the remote
regions. The second concerns the issue
of sustainable development in relation
to the use of a clean energy in a natural
milieu. This project is a real field of
experimentation of a public sustainable
development action. The originality of
the "photovoltaic energy electrification”
project in these regions resides in the
fact that it stretches over a very large
area and covers four wilayas of the
Great South. This is a real electric network, not connected to the national
one, connecting a group of villages.
Local population and project
Today, the electrification phenomenon
has revealed three important things:
• a dynamic of settling of the population. More than 90% of households
built a permanent home before the
electrification and in the prospect of
having electricity, 7% have newly built
a permanent home;
• a dynamic of population concentration. About 12% of new households
have set up in these villages;
• mass access to the electric network.
More than 82.3% of permanent homes,
within the surveyed villages, have electric energy.
Furthermore, more than 65% of the
electrified households have noticed
changes in their everyday life: more
than 47% feel that the change is radical
whereas 17.7% noted small changes.
The beneficial use of electricity in all its
aspects of everyday life constitutes, for
the households of the Great South, a
sort of social promotion, an access
route to comfort and modernity.
Change in the behaviours
of the population
We have seen individual behaviours
emerge which would be based in the
field of psycho-sociology. These observed behaviours are directly related to
the introduction of the electric technology. Among the social practices, we
note the intensive use of electric energy
for lighting requirements. Even if more
than 53% of households have internalised the discipline of using electricity, a
relatively small proportion remains
undisciplined insofar as all rooms are
lit simultaneously. The other uses of
electricity are proof of the comfort
introduced in the domestic space which
is demonstrated through the acquisition of a television set for the purposes
of opening up to the outside world, a
refrigerator for food or medication storage and freezing purposes, etc.
The second category of change in the
behaviours is related to the temporal
dimension. The relationship with time
has changed. Before electrification, the
activity stopped at nightfall, but since
the introduction of this new technology, i.e. electricity, the day has been
extended late into the night.
More than 54% of households turn off
lights after 10pm. This is a radical
change in the behaviour of the population of the South which breaks with the
natural organisation cycle of the human
activity.
Electricity contributes
to the opening up
Three indicators measuring electricity’s
contribution to the opening up of the
population:
• First of all, the settling of external
professional personnel in the village.
We particularly mention teachers, paramedical personnel, council personnel,
post office personnel, etc.
• Then, there was the installation of
infrastructures such as the school, the
healthcare room in almost all villages,
as well as council buildings (in
Terhennanet) or post offices (in Hassi
Mounir), etc.
• Finally, electricity has contributed to
the opening up to the outside world
and to the access to information. More
than 58% of households stated that
they watch television at the start of the
evening and late at night. This is a new
social behaviour which is emerging
within these communities. The programmes whose audience is the highest
are, by order of priority: information
☞
Energie & Mines
151
january 2008
SUSTAINABLE development
DEVELOPMENT
Sustainable
☞
programmes (53.7%, 56% of which
national and 53% international); films
(15.9%) and documentaries (7.9%).
This interest in information shows the
great need to break with remoteness, to
be up to date with what is going on in
the country, but is also a means of
expressing citizenship. The introduction of this new technology in the territory of the south of the country enables
this part of the Algerian population to
be included in the wake of profound
changes towards opening up and
modernity.
Investment in domestic
comfort
With the introduction of this new
“photovoltaic electricity” technology,
real opportunities have been offered to
the populations of the electrified villages to invest in electric equipment. The
population has purchased different
electric household equipment such as a
television set, a refrigerator, radio, fan,
lamps, etc.
The dynamic of purchasing equipment
has been differentiated from one village
to another, depending on the level of
wealth. Nevertheless, it is important to
Energie & Mines
152
january 2008
point out that the graph on the acquisition of electric household equipment is,
overall, the same: households start
buying a television set, then a refrigerator, a radio and, last of all, a fan.
So, the purchasing behaviour is determined by the satisfaction of basic needs
– it is only after the primary needs are
satisfied that the household invests in
needs of comfort.
The Saharan woman
– an actress of change
The electrification of the villages has
made real improvements in the way of
living of women, even if these improvements are just starting and have real
opportunities of developing.
Household chores have receded leaving
more free time to do something else.
Wood collecting has also receded by 10
points, meetings with women have
reduced by 5 points in favour of watching the television. The craft activity
has increased by almost 5 points.
Crafts have really benefited from the
introduction of this “electricity” technology. Today, more than 31% of
women work at this activity in the evening, whereas before electrification this
only occupied 4% of women. Hence,
the very concept of "the day" is in the
process of being redefined, at the same
time when a few jobs are created and
only ask to be supported and encouraged.
Domestic chores are real indicators of
the change process in the way of living
of women. Before, almost 60% of household chores were done in the morning, about a quarter in the afternoon
and 16% in the evening. Since then,
electrification has reorganised the time
devoted to these activities: insofar as,
by reducing the amount of household
chores to less than 44%, the morning is
focused on other preoccupations; the
amount done in the afternoon has not
changed (24.7% before and 23.5%
after) and in the evening, in light of the
light, household chores have doubled,
going from 16.2% to 32.5%. The structuring of a woman's day has undergone
real organisational changes. Electricity
seems to be the driving force of the
reorganisation of the Saharan woman’s
domestic chores.
Meetings between women have also
been shaken up. The regularity of the
meetings and gatherings has been
Sustainable development
changed by electrification, in that it has
encouraged new situations and new
topics of conversation. Even the times
set aside for this have undergone transformations over time. As women are
busy doing other tasks in the morning
and watching television in the afternoon, the frequency of their meetings
has reduced from 49.6% to 39.4% in
the mornings and 41.7% to 34.5% in
the afternoons. However, their meetings seem to be more frequent in the
evenings, going from 8.6% before electrification to 26% after. In this we are
seeing the emergence of new social
relations in the new timetables, i.e. in
the evenings when the discussions are
based on new topics. Undoubtedly the
television has contributed a lot in this
domain.
Impact of the television
Purchasing a television set is considered a major investment in disadvantaged milieus. Furthermore, the village
populations conceive the television set
to be a collective consumer good accessible to all relatives and neighbours.
Hence, the impact of the television is
not measured by the number of sets but
by the amount of viewers gathering
around it. On another level, the programmes watched are, for women,
subjects of discovery and opening up to
other worlds. In this context, the
results speak for themselves: 94 women
said they watched TV programmes.
Out of them 25.53% do so in the morning, 24.46% in the afternoon and
more than 50% in the evening. And,
15.66% of women watch television
with the children only, 31% do so with
their family and 39% with other
women.
The awaited TV programmes are the
following: soap operas and cultural and
variety shows are the most appealing
for women and are in first and second
position respectively; in third position
come the cookery programmes. As for
health programmes, these do not seem
to interest women too much, probably
because the traditional culture in terms
of medicine and health in these regions
is firmly rooted in place.
Introduction of comfort
The introduction of electricity makes
improvements both in the living condi-
tions and in the working conditions. It
reduces the constraints and hardships
of different activities and has enabled
access to a level of comfort. Energy
consumption is considered an indicator
of the level of social and economic
development of societies and communities. In this sense, the appreciation by
the village-dwellers of the electrification phenomenon is a significant indicator. Indeed, more than 97% of
women feel that electrification is positive and only 2.75% think that it is negative. On the other hand, 88.88% observe that it has introduced radical changes in their way of living, whereas only
8.33% remarked few changes and less
than 3% no change at all.
The experience and appreciation of electrification
Electrification has been welcomed as a
major event, celebrated by almost 90%
of the population, by the organisation
of large group meetings.
Psychologically, it is an event that
marks and structures the individuals.
The following data shows the extent of
this event and illustrates the perception, by women, of the electricity fairy
and the magic of the changes it causes:
almost 89.12% feel electricity to be
positive, useful and necessary; 6.30%
feel this phenomenon to be a consideration and a valorisation of households
and 4.52% as only a simple demand
satisfied.
In general, electricity is perceived positively by the majority of the female
population. It has opened the doors of
life by reducing the areas of obscurity this was one of the first expectations of
the village women. Household lighting
has enabled relatives and instructors to
appreciate the improved education level
of their children. It has opened up new
horizons to productive activities, particularly crafts which also require more
energy. In a world, electrification is
perceived positively by the persons surveyed who favourably welcome the
radical changes it introduces.
city in the Great South is in the process
of transforming the habits of the beneficiary populations including, in this
case, women. The improved living,
environmental and family conditions
seem to be a reality.
However, a fundamental question is
asked as to the limitations of this programme - insofar as the populations of
the villages of the South mostly live
under the poverty line, which in no way
enables them to have sufficient purchasing power to intensify their energy
consumption. This is also the case
because the market cannot, on its own,
provide the goods and services to these
populations which are mainly devoted
to subsistence activities.
This is why the aspirations and the
needs of this population must be taken
into account by the national community and recorded as a development priority for the remote regions of the country. This programme must formalise
the State’s commitments in terms of
community actions and mobilise the
local beneficiary populations in view of
adhering to the programme through
the exercising of responsibility towards
the project.
The stake of electrification in the South
does not only cover the technical and
social dimensions but extends to the
political dimension within the local
area.
A. A.
(*) CREAD Economist-researcher
Algiers
(1) Survey carried out in June 2003 by CREAD
on behalf of the company Sonelgaz on “The
Evaluation of the socio-economic impact of the
photovoltaic energy electrification of the villages
of the Great South”.
To conclude, the “photovoltaic energy
electrification” project has revealed
significant changes in the way of living
of the local populations of the Algerian
Sahara.
Overall, the use of photovoltaic electri-
Energie & Mines
153
january 2008
SUSTAINABLE development
DEVELOPMENT
Sustainable
Energie & Mines
154
january 2008
Sustainable development
Energie & Mines
155
january 2008
WOMEN’S FORUM
Women’s
Forum
When women have a
say in the matter…
By
G. Thaïbaoui (*)
It is not easy to prove
ones gratitude to
these women of the
Women’s Employment
Observatory of the
Sonelgaz Group and to
those of the Women’s
Energy Commission of
the FNTIEG when one
is part of it…
B
ut remarkable work deserves
specific attention, and we
feel it obvious to highlight
these women of actions,
working furthermore in synergy, in
order to help and encourage other
women to climb up the hierarchy of
companies, to promote women’s rights,
to ensure that working women have a
positive image in a professional environment, etc.
Whether young or not so young, single
or mothers, these women work in the
Energie & Mines
156
january 2008
background; perhaps they disrupt the
established order but, oh, how enhancing they are for the company and for
the female personnel! Ever determined, they never lose sight of the collective interest. The works of the Women’s
Employment Observatory (reports,
action plans, meetings, awareness-raising, etc.) and all the female concerns
and demands dealt with by the
Women’s Energy Commission, not to
mention the field trips to meet surprising women, etc. are all proof of this.
The results of these works have never
been as favourable for the promotion of
women. Our proof: our barometer is a
cutting edge indicator!
These pioneers have deserved being
appointed by their line managers and
they are all proud of this, carrying
increasing weight on their shoulders
yet standing straight. Their sole aim is
to gain more recognition, including
where they are not expected to be, in
order to go further.
They draw their resources from their
professional life to feed into their professional life. Used to organising their
family life, they do the same at work.
They have learned to manage several
things at the same time.
These women have assets and are full
of female values such as: listening,
communication, team work, relationships, etc.
They anticipate and detect risk better,
for example on the subject of: psychological harassment. It’s a question of
sensitivity!
These are women who fight for other
women, but differently, with other weapons: patience, women’s intuition,
courage, consistency, confidence, etc.
Today, they have earned a privilege,
that of being present in all the commissions in the company and others besides... Women’s employment will soon
be on the agenda of the company’s
board of directors.
So, bravo ladies for your courage and
thank you for your generosity. This
devotion entitles you to a promising
future…
G. T.
(*) Chairman of the Women’s
Employment Observatory
of the company Etterkib
Women’s Forum
What they said…What they said…What they said…
Mr Aouchiche Samir
Project engineer
Sonelgaz Group subsidiary (Kahrakib)
Mohamed Khaldoun
Kahrakib executive
“For me, women have never been marginalised within
Algerian society, in general, and in the professional world,
in particular – indeed to the contrary.
In these last few years, the breakthrough of women is
confirmed further, helped by the country’s leaders who
are aware of their place and their role in the running of
Algerian society.
The many actions undertaken in this respect such as the
presidential and governmental guidelines translated into
practices encouraging the promotion of women will go in
the desired direction to banish all contempt.
Despite this, I feel there is still a lot to be done as intentions, as noble as they may be, are bad at hiding the
vague desires of some and the conservatism of others,
with Algerian society, given its socio-cultural morphology,
being the breeding ground of all antagonisms.”
“For a great many years, women were solely employed
for the roles of secretaries, housewives or cooks... This
status perfectly illustrated the projection made of the role
of the housewife in the economic and industrial milieu.
Having recognised their true potentials, women today are
getting down to the job of realising their ambitions, helped, it is true, by the resurgence of a favourable international environment (Universal Declaration on Human
Rights), a national political desire (Algerian Constitution
and an entire protective and encouraging regulatory and
regulatory framework) and an irreversible commitment of
our leaders (directive of the Minister of Energy and Mines
of 5 January 2005 and directive of the Chairman & CEO
of the Sonelgaz Group no. 27 of the month of March
2007).
Supported and encouraged, women, then, are investing
in the field which was previously inaccessible to them.
Hence, today, we find them occupying positions of
responsibility and of supervision in domains as important
as they are varied such as human resources management, engineering, technical studies, accountancy, finance and even construction works.
Some have even succeeded in earning the status of
social partner by being elected in trade union organisations to represent and defend the interests of workers
among whom men blocked them.”
Mr Haddad Ouahab
Executive
Amtout Omar
Head of the Low Voltage Division (DTPI)
“I think that women can play an important role in the running of a company, as I consider that competence is the
sole evaluation criterion for promoting women to positions
of responsibility.”
Mr Bourouba Abdelhadi
Head of the careers and training
department (Kahrakib)
“An inseparable element of social life and of the working
world, never have women been at the centre of the discussions of the public authorities and decision-makers; a
real undertaking entirely dedicated to women is undertaken in the energy and mines sector and in the Sonelgaz
Group, which perfectly reflects the revived interest of
these managers in women, but also their conviction in
considering a balance of the sexes in employment as a
source of efficiency and development; a big hats off to
these craftsmen who are Dr Chakib Khelil, Minister of
Energy and Mines, and Mr Noureddine Boutarfa,
Chairman & CEO of the Sonelgaz Group, who are doing
formidable work which is illustrated, in particular, through
the directives and instructions related to the promotion
and protection of women, but also through their commitment to the principles of equality and their everyday
actions. A huge step has just been made, thus giving
women the opportunity to affirm their talents and uphold
their competences as being more active and more involved in all areas of life.”
“These actions will enable women to demonstrate and
develop their know-how, their competences and their
capacities. Given that access to positions of responsibility
is open to both sexes, this will enable women to take
more initiatives, make more commitments and show more
will. This new strategy will introduce real competition between men and women, which will enable the emergence
of real competences.
In this sense, Algerian companies will benefit from better
available human capital.”
Report put together by
G. Thaïbaoui
Energie & Mines
157
january 2008
ANALYSIS
analysis
Women’s statuses and situations
of women in Algeria today
By
Chaulet Claudine (*)
Thanks to the work of
the great Algerian
institutions that monitor the population, we
have learned in these
last few years that our
society has changed
radically: the birth
rate has lowered,
considerably and steadily, in the last few
years; the age at
which young men and
women marry has
considerably reduced
and the difference is
even tending to reduce; most households
are now strictly mononuclear… (1)
A
lthough other changes also
deserve attention, I would like
to dwell on these three, not to
seek to explain them, but
because they indicate the presence of
new situations for women and that
these new situations are not, in my opinion, sufficiently studied by social
sciences.
Numerous works, often academic
ones, are carried out in different
departments and institutions: a lot are
interesting, even if they have not had
the means of minimum representativeness. But few of them strive, with the
determination I feel necessary, to
understand and make understood the
strategies and the values adopted by the
women placed in the situations which
the figures reveal and which tradition
did not foresee. I would therefore like
to appeal to research, between us.
New situations
Whilst, beforehand, within the framework of the traditional socialisation
and still in accord with the primordial
separation of the areas and roles between the sexes, women were prepared
for and adapted to clearly defined family statuses – daughter, wife, mother,
grandmother -, their current preparation for the situations they will have to
face is more vague. Let's take a few
examples:
■ “Daughters”, now called up to marry
later on in life (and for some of them to
“pass the age” of marriage, therefore to
be excluded from sexuality), are not
prepared for this task. Whilst some can
give meaning to the period they devote
to their studies, whilst others may also
give meaning to the work which enables them to materially support their
family, and whilst others may find
value in “helping” those in need around
them, this does not however give them
a recognised social status.
Energie & Mines
158
january 2008
■ Wives who stay at work are undoubtedly more numerous than in the previous period due to the economic crisis
which makes each job so invaluable.
The rate of female employment is
increasing. The turnover, caused not so
long ago by marriage or the birth of the
first child, is tending to reduce, which
widens the opportunities of “professional careers” based on experience. But
in what permanent tensions? The analysis of the current working conditions
in the new women’s jobs must be continued (2)
■ Housewives have acquired, not just
in the city, a whole heap of new roles,
particularly in the education of children
which has become more complex and
administrative-type external relations
such as in the management of their
home and of the household budget.
This new weight is still barely known,
for example in terms of “budget-time”
but also in terms of initiatives and
social relations.
■ Grandmothers, with the nuclearisation of households, are losing their status. Whilst young couples set up their
own homes, the parents may remain
isolated or else cohabit with those children not married: young women
without hope and/or boys that have not
found a suitable wife. Other than the
psychological tensions inherent in such
situations (frequent, according to the
latest census in some “popular” districts), you have to understand that
these old women are thus deprived of
the valuable position, previously promised to them, as a result of their family
life. You also have to foresee what
would become of the life of people reaching the end of their days if the aspiration, which today seems generalised
in the young, to a separate home became a reality.
■ Finally, it should be emphasised that,
at the time of the latest census, there
were a significant number of “women
Women’s Forum
heads of family”: windows or divorcees assuring alone the education of
their children above all; often old
women who have outlived their husbands but, also, young women assuming this hardly feminine role, according to tradition. To this should be
added situations that are even more
removed from the old statuses:
unmarried mothers raising their children alone; young unmarried women
setting up home (potentially at the
time of a job) away from the parental
home…
Situations without values ?
The listing of these situations which
exist in large numbers, without however encouraging research, could be
continued. The aim is not to think of
all possible cases, to which the recent
tragedies have added strictly unimaginable situations of broken families,
isolated survivors, lost individuals,
etc. But, an even more serious question is asked: how do we explain that
these new situations are not attracting, as a priority, those who claim to
be social change specialists? Apart
from the all too often real field difficulties, I feel that there is a real difficulty in acknowledging that the family, as a reference model of the traditions to which we are attached, is no
longer the same. Hence, the frequent
use of euphemisms: “I’m helping my
father, I’m helping my husband” or
“she’s a real family girl”. But, there is
also another filter: the modernity to
which everyone aspires without being
able to define it and which arrives in
the form of images and thought patterns
which
are
established.
“Normal”, we repeatedly say.
Not to ask too may questions, it is
easier to imagine a society evenly
composed of nuclear households and
of individuals knowing how to answer
standardised questionnaires.
Many Algerians have already answered, for example, surveys on contraceptive practices and their answers are
important. But what do we know of
young girls (and young people) who
have been waiting to get married for a
long time? What percentage of the
reduction in the birth rate is attributable to contraception and what percentage is attributable to the exclusion
from marriage for young people?
What percentage of the recent and
current violence is attributable to this
exclusion? And on what and why is
marriage, formerly a central institution of society, sticking? And how,
according to what references is the
sharing of social roles between the
sexes currently practiced?
To conclude, the values which strengthened the successive women’s statuses are carefully maintained and passed on in most families, to the point
that the new women’s situations are
not promoted. Young individuals,
boys and girls, express innovating
aspirations, but cannot have them
adopted as values.
A new value is however imposed:
money! The money which gives the
power to consume. Example: through
the ostentatious expenses of marriage
and setting up a home. Is this competition which prevents the members of
society from inventing, for the relations between the sexes and for the
new women’s situations, the social
values which go with the actual living
conditions?
Question asked to stimulate the discussions today and the problems in
preparation.
C. C.
* Sociologist-professor
Department of Sociology
SNS Faculty
Algiers
(1) See “Statistical data” of the ONS (National
Statistics Office), Algiers.
no.
314.
(2) See the Belhouari-Musette Djamila report
on female workers in the black economy in
Algiers: “The black economy activity of women
from Algiers and its relationship with the family: life stories” (in this seminar).
Energie & Mines
159
january 2008
ANALYSIS
analysis
Female graduates
and professional identity
By
Malika Tefiani (*)
The participation of
Algerian women in the
edification of the
country has become a
topical subject. This
theme would benefit
from a certain priority
in the discussions, in
the different cultural
events and in the
demands of the female population.
t is true that the percentage of
women with a job compared to all
those employed remains low
(with total female employment
rate of 5.2% up until 1992) (1); different economic and social development
plans foresee a relatively major increase
in the employed female population – in
some way a mass arrival of women on
the job market. These forecasts can be
explained in the improvement of the
level of education compared to previous generations, by the mass frequentation of training institutions. Apart
from this criterion, we also have to take
account of the aspirations of Algerian
women and of the desire to participate
in economic and social life. Access to
training is not always possible without
constraints: social-type preventions of
socio-cultural-type constraints which
still govern our society, household
duties and the intensive domestic work
load, the education and looking after
children, account take of the insufficiency, or even the non-existence of
crèches.
All education systems are specific to a
given society, but this comprises a lesser or greater heterogeneity of classes
I
Energie & Mines
160
january 2008
and socio-cultural groups. It is by reference to a certain conception of childhood that a society draws up its education system. This conception forces the
school to welcome the children, to educate them in the same way without
taking account of their gender. But
female or male childhood and adolescence are still profoundly connected to
the female or male universe of each
society. If we talk of the schooling of
girls, it is that the latter appears to be a
decisive element in the transformation
of the relationship to knowledge.
To the current disparities depending on
the regions is added, inside each of
them, persistent inequality between the
sexes in access to schools. The schooling movement for girls is still somewhat behind compared to the movement for boys. If the breakdown of
resources seems to be the source of the
differences of schooling between zones
or regions, more subtle economic or
cultural phenomena are the source of
this phenomenon.
Mass schooling of girls is, however,
one of the remarkable elements of the
development of the education system.
This is a recent phenomenon and,
although to varying degrees, common
to the entire country.
The ascent of girls is not done without
questioning, defence and a revaluation
of statuses. Studies on the schooling of
girls encourage us to ask ourselves
about the School/Society relationships,
about the influence of the school education of girls with regards the building
of male/female relationships. What is
the actual influence of the schooling of
girls on the status of women and in
what ways do the limits have an impact
on the supposed emancipator role of
the school? Certainly, the school has
enabled the emergence of female elites,
economic or political, but the status of
the most disadvantaged has hardly
improved.
Female graduates from higher
education : how do they
reinvest the knowledge?
The emergence of an educated female
population, with diplomas and
employed, is a new phenomenon in the
Maghreb countries. Access to modern
education has been for a long time
considered as an element of social progress with regards girls. Indeed, the
education of girls contributes to changing the society, to causing progressive
changes which, by making a snow ball,
may cause a global change. Indeed, this
means less learning to learn than learning to understand, to think so that by
developing their knowledge girls will
develop the powers of thinking and
acting.
Access to education and to the highest
levels, in particular, would be likely to
give a new content to the social role of
women and to push for a redefinition of
the social relations between the sexes.
Maghreb women, highly qualified
sometimes and employed, are equipped
to modify their private life and achieve
a professional identity. Boys have been
caught up with by girls in most educational races. The strong growth in
schooling has further changed the distances between the sexes and between
social groups.
Social effects of the higher
education of girls and the
appropriation by women
of the academic capital
A survey carried out in 1989 by the UN
gives interesting indications on the
increased amount of women working
in certain liberal scientific professions
and as senior executives; the professions of healthcare technicians and teachers of fundamental education have a
great many women:
• more than 1 in 3 healthcare technicians and 1 in 3 teachers are women
• 1 in 5 employees is a woman in the
other professions (senior executives
and administration employees).
Women’s Forum
The studies carried out on women’s
employment show a significant increase in the female employment rate which
has gone from 8.2% to 11.4% and
represents 13.1% of the total workforce(8). This rate, however, remains one
of the lowest in the world. The degree
of female employment in all medical
professions is more than 50% currently. In some health sectors of the north
of the country, the female employment
rate is more than 80%.
• 49% in the highly specialised establishments
• 45% in the university hospitals in
1993
• 63% in dental surgery
• 66% in pharmacy
If we consider the liberal professions, 1
in 10 employees is a woman, with the
number of women working as
employers and as self-employed being
low (1.9%).
Another study(2), carried out in 1992
with the help of the IREP and the
UNFPA, also gives interesting results:
the weight of administration – health,
education – makes it a sector 33%
comprised of women. More specifically, this percentage is 45% for health,
i.e. that one out of every two healthcare workers is a woman, and one in
three in education.
Oufriha Fatima-Zohra, economist(3),
highlights, in a recently published
study, a real revolution which is being
implemented in the attitude of Algerian
women in terms of procreation where,
in total contrast to tradition, they now
feel a significant “desire for daughters”. Women’s employment is the
other spectacular aspect of these transformations. On the other hand, it
draws up a table of the emergence of
new professions: female entrepreneurs.
It shows to us how “the medical citadel” is in the process of being conquered by women. These changes exist and
reveal profound transformations in the
social structure. This social ascent of
women which is translated by new roles
and statuses is fundamental. Still
according to the aforementioned
author, it is a result of the new perception which women have of themselves
through “the desire for daughters” they
express in their new highly contraceptive-using method of procreation. The
second change results from the highlighting of certain characteristic behaviours in the domain of employment:
the conquering of the medical professions and the emergence of female
entrepreneurial cores(4). The revival in
religiousness and the increase in fundamentalism make us fear the worse: an
anti-Malthusianism specific to Muslim
societies, but this is the opposite of
what is happening and this is not an
economic movement. The fate which
women would like for their daughters is
the best factor of positively directed
social change(5).
The aforementioned author thinks that,
with this attitude, Algerian women have
made a real change:
• 90% are no longer opposed to their
daughters having salaried employment;
• 96% reject marriage before the age of
18 for their daughters;
• 79% really want their daughters to
study at university;
• 85% want to give the same level of
education to their daughters as to their
sons.
Kouaouci A. (6) shows the distance
which women take compared to what is
presented to them as being Islam,
whose very content they dare to discuss
during the current period of religious
manipulations. In 1992, among the
women surveyed who were hostile to
contraception, only 7% mentioned religious reasons.(7)
In 1996, 1/5 of professors were
women, 50% residents, 28% docents
and 40% were assistant professors. The
medical professions represent one of
the sectors with the highest female
employment rate.(9)
As a break with the traditional society,
women are involved in all activities:
• industrial activity: family micro-companies mostly, clothing industry, hosiery, manufacturing of pleasure boats.
…
• entrepreneurs: in 1992, they represented 3.7% of all working women(10)
Women had always been confined to
jobs which are traditionally reserved for
them. A certain number of studies
confirm that the presence of women in
the non-traditional sectors has hardly
been felt. This may be attributed to the
lack of various social factors such as
shown by the research of Armstrong &
Armstrong (1981). The data compiled
proves that women tend to embrace
traditional careers.
Furthermore, further to a study on
women with a university degree (the
sample included 200 women; 130
women replied):
• 15% hoped to become domestic engineers;
• 60% looked for jobs that have always
been occupied by women. Most women
place their family life above all else in
terms of their concerns and choose traditional-type careers (education,
health, justice, etc.)
☞
Energie & Mines
161
january 2008
ANALYSIS
analysIS
• In 1990-91, 10,142 women graduated from higher education and represented almost 40% of all graduates;
• In 1991-92, they represented 40.5%
compared to 43.4%, in 1992-93, and
44.7% in 1993-94, to reach 46% in
1996-97, 49.6 in 1997-98, 55.52% in
2000 and 57.05 in 2001.(11)
Hence, the statistics reveal a new social
phenomenon, large in size and making
quick progress. The increasingly pursued education of girls makes female
graduates a new category on the country's social grid. This weight of female
graduates from higher education is
even greater when we know that these
female graduates, like men, look for
social validation from their degrees
through a paid professional activity.
☞ 12% intend to have jobs not traditio-
nally occupied by women.
The survey shows that the graduates
who chose non-traditional careers are,
in general, from a favoured background
because the immediate entourage,
usually part of society’s elite, procures
the power, the status and the privileges
necessary for accessing a prestigious
social function (management, medicine, pharmacy, architecture, etc.).
On the other hand, we have noted that
the background of the mother on the
job market has a certain influence on
the choice of the sector and hence the
career. There would be a relationship
between the choice of a non-traditional
career and the stability of the job of the
mother. Furthermore, female students
whose mother is less confined to a
stereotyped role feel freer to choose a
career in non-traditional sectors. The
type of job occupied by the mother
determines, in her daughter, the choice
of a traditional or non-traditional
career. It is true that there is little
research into the relationship which
exists between the mother’s career and
the career choice of her daughter; the
fact that the mother works as much as
the type of job she has play an important role with regards the children’s
aspirations.
Energie & Mines
162
january 2008
Mobilisation on the school
The fact that young women can have
education in the same way as young
men constitutes support to the development of salaried work for women,
transformations of the family and the
female identity. Women have a resource, a capital which differs little from
male capital and which therefore makes
it possible for a position comparable to
that of men on the job market.
The idea of education refers to the idea
of the relationship with knowledge and
training appears to be the key of the
future. We carry out long studies, so
we can gain a lot of knowledge and
competences. It is the know-how itself
which assures the mediation between
the present and the future. Prolonged
survival in the education world enables
them to hope for a “good job” without
asking the question of the knowledge
actually gained.
This lesser differentiation of men and
women, from the point of view of social
and cultural wealth, is the key element
of the changes which affect relations
between men and women both in
public life and in private life. But the
possession of university education by
women, similar to that of men, is a
necessary and insufficient condition of
the change in the social relations between the sexes.
The progressive access of women to
paid employment, under the pressure
of the necessity or desire to affirm
themselves, has tended to favour the
profitability of the degree on the job
market. By performing an activity outside the domestic area, women access
new forms of sociability and cultures
which introduce changes in the traditional way of living, structurally based
on the gender division of the roles.
These changes induce new forms of
sociability and practices which may
conflict with the system of traditional
values. The national education and
training policies for young people, reinforced by great popular support, have
familiarised the opinion with the need
to provide girls, as well as boys, with a
certain cultural capital.
The degree is invested, both for girls
and for boys, with a power of social
and economic promotion. Let’s take
the example of the teaching practice
observed during a survey carried out at
the University of Algiers (Case study by
the CREAD, no. 61).
Identities and social relations
of the teaching practice
We might think that women’s access to
all degrees of education, including
higher education, means for women
access to all knowledge, to equality
with men and entitlement to the cultural heritage of the society in the same
way as men. “It is through school, writes Assia Djebbar, that women start
their effective entrance into society.
Women’s Forum
This is where women overcome the
first hurdle of “limits” of all kinds
where we claim to confine them.” (I)
(Djebbar Assia, 1962)(12)
For several years, sociology has been
analysing the many facets of the
concept of identity. Numerous analyses
of the identity-related stakes associated
with women, amongst others, have
extended the discussion on class belonging, for a long time at the centre of the
thoughts of many employment sociology researchers. Various styles of analysis of identities have enlarged the prospects on the phenomena which structure the present and the future of our
societies, so much so that it remains
difficult to contest the fact that identities and the process of forming identities are now at the centre of our social
relations. (Maheu, 1990)
The identity is a social construct which
is inseparably a relationship with time
and space (Camilleri, 1986). The
notion of professional identity is no
exception to this rule. The notion of
teaching identity is built from a relationship with space because this is a
practice and a history and a relationship with time because this history of life
is part of a specific climate, a specific
social area. Identity is both individual
and social and the links between the
two are constant.
Maheu and Robitaille (1991) add:
“Identity is an affirmation, recognition,
by itself and by others, of a subject at
the same time as it implements more
collective components, social relations
constitutive of autonomy, power of
common projects, social battles”.
Identity is therefore a social construct
built on social relations – whether these
are structural or human – located in
time and which highlight a professional
practice that is both individual and
social. This conception of identity then
associates the individual identity and
the collective identity within a single
process.
Work represents the area par excellence where the construction of the social
identity is played. Work is therefore an
important place of objective transaction
for the construction of identities for
oneself, since it represents an area
where individuals can feel recognised
and valued and where identity belon-
gings can be negotiated and managed.
Work implements various types of
access processes to identity depending
on the means available to support the
conflicts. This is a place of differential
constitution of individual identities.
Identity should therefore be associated
with its more collective components of
interpersonal relations linked to power
and conflicts, but also to its individual
dimensions of recognition of the subject, and work is its source.
Recognising, thus, identity enables a
clarification of the process of constitution of the rationale of player in its
dimensions of social recognition, selfrecognition in the work and those of
highlighting individual identities by the
social constraints. The education
milieu is still particularly sensitive to
these dimensions and it will be important to understand the possible impacts
of this on the constitution of identities.
The highlighting of this double process
of the society and of the individual has
further revealed the capacity of players
to intervene in their own work environment, but furthermore to show the
influence of human exchanges on the
development of this individual identity.
Identity is a social construct which is
part of social relations based in time
and linked to a professional practice
that is both individual and social.
M. T.
(*) Professor-psychologist – SNS
Faculty - Algiers
NOTES
(1) ONS (Office national des statistiques –
National Statistics Office), Algiers, 1992.
(2) Study carried out by the IREP and the
UNFPA, Tunis 1992.
(3) Oufriha Fatma-Zohra: Femmes algériennes;
la révolution silencieuse, Annuaire Narges,
Anep, Algiers 1998 and the review MaghrebMachrek.
(4) Id. pages 19 and 38.
(5) Id.
(6) Kouaouci A.: Familles, femmes et contraception. Contribution à une sociologie de la
famille algérienne, Algiers CENEAP-UNFPA,
1992.
(7) Id.
(8) Oufriha F. Z., aforementioned.
(9) Id.
(10) Id.
(11) Ministry of Higher Education: statistics,
Algiers, 1998.
(12) Djebbar Assia: Les enfants du nouveau
monde, Paris, Julliard, 1962.
• CREAD: Centre de recherche en économie
appliquée pour le développement
(Algiers).
• UNFPA: United Nations Population Fund.
• IREP: Institut de recherche et d’études pour la
population (Tunis).
• ONS: Office national des statistiques (Algiers).
• 1st BY. 1st base year.
BIBLIOGRAPHIE
• Baudelot C. & Establet R. Allez les filles !
• Balandier George: Sociologies des mutations,
Paris, Editions Anthropos.
• Boutefnouchet Mostefa: La Famille algérienne,
Evolution et Caractéristiques, Algiers, Sned,
1980.
• Boukhobza N., Delavault H. & Hermann C.:
Les Enseignants-Chercheurs à l’université. La
place des/femmes. Paris. Ministry of National
Education, 2000.
• Chariot B.: Le Rapport au savoir en milieu
populaire, Paris, Editions Anthropos,
1999.
• CERM (under the direction of). : La Condition
féminine, Paris, Editions sociales,
1978.
• Djebbar Assia: Les enfants du nouveau
monde, Paris. Julliard, 1962.
• Duru-Bellat M.: L’Ecole des filles. Quelle formation pour quels rôles sociaux ?
Paris, L’Harmattan, 1990.
• Hakiki-Talanhe Fatiha: Travail domestique et
salariat féminin: essai sur les femmes dans les
rapports marchands, University of Oran, Thesis
for Masters in Economic Sciences, 1983.
• Guillaume D.: Le Destin des femmes à l’école,
Paris, L’Harmattan, 1997.
• Hassini M.: L’Ecole, une chance pour les jules
de parents maghrébins, Paris,
L’Harmattan, 1997.
• Maruani M.: Mais qui a peur du travail des
femmes? Paris, Syros, 1985.
• Mernissi Fatima: Le Maroc raconté par ses
femmes, Rabat, Smer, 1984.
• Minces J.: La Femme dans le monde arabe,
Paris, Editions Mazarine, 1980.
• Mosconi N.: Femmes et savoirs, Paris,
L’Harmattan, 1994.
• Les femmes au Maghreb
Prologues (9 May 1997): Femmes et Sciences
sociales au Maghreb. Traditions, mutations,
aspirations.
• Rouzbeh S.: Par-delà les voiles, Paris,
L’Harmattan, 1995.
• Zavalloni M.: Identité femme et culture,
in "Le sexe du pouvoir" Desclée de
Bouwer, Paris, 1986.
ABREVIATIONS UTILISEES
• CENEAP: Centre national d’études et d’analyse pour la planification (Algiers).
Energie & Mines
163
january 2008
COMMUNICATION
communication
The Joint Oil Data Initiative
in Algiers
The third seminar of the Joint Oil Data
Initiative (Jodi) for the Middle East and
North Africa region was held at the El
Aurassi hotel. The works were opened
by Mr M'barek El Mekki, Director
General of Energy, who stated that “by
hosting this seminar in Algiers, the
Ministry of Energy and Mines makes a
contribution to the capacity building of
the concerned institutions in the field
of data collection, processing and dissemination, as well as regarding data
transparency in the vital sectors of the
economies of Middle East and North
Africa that are those of oil and energy”.
Since its creation in 1977, the Ministry
of Energy has drawn up the national
energy balance on an annual basis.
Algeria is represented on the board of
directors by Mr Hamid Dahmani,
Governor of OPEC.
As an introduction to the session, the
Energy Director of the forum's secretariat, Mr Saïd Nachet, explained the
objectives of the Jodi and the importance of statistics for the stability of the
petroleum market.
Hence, despite a reduction in these last
thirty years, the percentage of oil in the
final consumption of energy is still
important. It has gone from 46 to 43%.
The forum put together a questionnaire template which enables the statistics
in terms of oil of the 90 members of the
forum to be updated each month.
The Energy Director indicated that the
market's stability is crucial for energy
security.
The volatility of oil prices remains a
serious handicap both for the exporting
countries and for the importing countries. The transparency of the data is
also designed as a means of fighting
speculation on the petroleum market,
according to the Energy Director.
In 2006, the Jodi grouped together 90
countries which represent about 90%
of the world's oil supply and demand.
The initiative was launched in 2001 by
six organisations (Apec, Eurostat, IEA,
Olade, OPEC and the Untied Nations)
in order to encourage transparency in
the statistics for oil and enable the different market players to have reliable
information.
Publication of the second edition
of the Directory of the Energy
and Mines Sector (2007)
The Ministry of Energy and Mines has just published the In his message, the Minister of Energy and Mines,
Dr Chakib Khelil, emphasised that this new edisecond edition of the Directory of the Energy and Mines section, after the 2004 one which “was a success”,
tor (2007) with a new look.
assures its users a “quick and optimised refeThis 272-page colour publication wisrence” and procures the information they need
hes to be a communication and contact
for their contacts or for their operations.
tool between the different public and pri“This functionality of the 2007 directory of
vate companies (national and foreign)
energy and mines is even more invaluable
working in the Energy and Mines sector
given that the entire sector is developing
as well as their clients and other interested
quickly, promotes new activities, some of
parties.
which were undreamed of, imposes new
This directory, added to and diversified,
contracts, confirms players for a long time
makes available to the user updated data
firmly rooted in place, pushes out young
and contact details (telephone numbers,
stems and, above all, gives the promise addresses and email addresses) of the comalready held - of vigorous growth and a
panies and enterprises working in the various
power of innovation whose foremost
activities (hydrocarbons, electricity, mines,
interest is to make the Energy and Mines
services and others).
sector a driving force and a stepping
Several small and medium sized enterprises,
stone for the economic overhaul of the
working in the mines sector (mining of aggrecountry”, writes Dr Chakib Khelil.
gate quarries, decorative stones and sand
cement quarries), created in favour of the Mining Act are listed in this directory.
Energie & Mines
164
january 2008
communication
Dissemination of energy data
Algeria is in an idea position,
according to the IEF
Algeria is in a very
significant position in
terms of collecting
and disseminating
petroleum statistics
and data, indicated in
Algiers the head of
the Energy Division of
the International
Energy Forum (IEF),
the Frenchman Saïd
Nachet.
Algeria “contributes actively”, he said,
to the Joint Oil Data Initiative (Jodi)
launched in 2001 by six petroleum and
statistics organisations.
“With Algeria, we are served well: it is
the only African country which is in
order with the Jodi programme”, added
the IEF official on the fringes of the
Jodi training seminar, organised in
Algiers from 23 to 26 October, for officials from the oil sector of the Middle
East and North Africa (MENA) region.
Algeria finds itself in this ranking
alongside large petroleum countries
such as Saudi Arabia, Australia,
Denmark and the United States, according to a Jodi document.
The performance criteria measured to
this end are the dissemination timeframes, the reliability and the complete
supply of data, according to a document from the forum.
Organised by the IEF, this seminar is
the third of its kind after the one held in
Caracas (Venezuela) in August 2006,
and the one held in South Africa, in
January 2007, designed for the countries of Sub-Saharan Africa.
Another seminar for the Central Asian
region and for the perimeter of the
Caspian Sea is planned in 2008 in
Tehran, further revealed this same official. Every month, Jodi collects data
from companies from the oil sector or
from the national authorities concerned
to then put this data in questionnaires it
prepares.
The other stage consists of checking
this data by the IEF secretariat and the
partner organisations of Jodi to add to
the database.
The IEF questionnaire collects 40 pieces of data on the production, demand,
imports and exports segments as well
as on stocks. The data on the reserves
is not included in this questionnaire,
explained Mr Nachet.
This database is “important in one
more than aspect” and contributes to
giving those involved in the petroleum
market reliable data which enables
them to make the right decisions”, he
emphasised.
The lack of data and statistics opens up
the way for speculation - currently a
source of volatility of the crude oil prices on the international market.
For him, transparency therefore reduces speculation and “gives a clear
image” of the petroleum market, which
is a futures market, whose prices
depend on technical forecasts and
others. For his part, the Director
General of Energy at the Ministry of
Energy and Mines, Mr Abdelkader
Mekki, pointed out that Algeria regularly provides its partners at OPEC, the
International Energy Agency (IEA) and
the IEF with oil and energy statistics,
according to the templates specific to
each organisation.
Regarding Jodi in particular, Algeria,
he continued, contributes in an “effective and sustained way” to the establishment of the monthly statistics that
the secretariat of the IEF publishes”.
“The interest of this seminar is twofold with regards the use of having better data for a fair and on-time appreciation of the developments of the
petroleum market, but also of the
results of the transparency which is the
first step necessary for any ambition of
good governance”, emphasised Mr
Mekki.
Furthermore, Mr Nachet revealed that
the 11th ministerial conference of the
Forum is planned between 20 and 22
April 2008 in Rome (Italy) and should
bring together about sixty Ministries of
Energy.
The preparation of this meeting’s agenda has been entrusted to the secretariat
of the IEF, he added.
Energie & Mines
165
january 2008
COMMUNICATION
communication
Publication of the second
edition of the Guide
to hydrocarbons in Algeria
The financial audit and consultancy
firm (KPMG Algeria) has presented the
second edition of its guide to hydrocarbons in Algeria, a document which
should particularly enable investors to
“understand the impacts” of the
amendments made to the 2005
Hydrocarbons Act, according to its
designers.
During a press meeting, the head of
legal matters of KPMG Algeria, Mr
Abdelkrim Ramtani, emphasised that
the new, updated edition of this guide
was necessary due to the “neuralgic
nature” of the sector in question for the
Algerian economy and the importance
Energie & Mines
166
january 2008
of the fundamental amendments introduced by the order of 29 July 2006 in
relation to the legal framework established by the Hydrocarbons Act.
In 160 pages, the Guide to hydrocarbons offers investors of the energy sector, in its new “revised and corrected”
version, a detailed presentation of the
sector as well as the new legal framework and the fiscal provisions governing this sector.
This first edition of the guide was
published in 2005, he reminded.
Mr Ramtani furthermore made a comparison between the legal and fiscal framework governing investments in the
hydrocarbons sector through the Acts
of 1986, 1991 and 2005 as well as the
order of 2006 which had introduced
new measures, particularly the establishment of a tax on the extraordinary
profits made by the foreign partners of
Sonatrach.
This tax is imposed each time the average monthly price of the barrel of
crude oil exceeds 30 dollars.
KPMG Algeria is a financial audit and
consultancy firm whose main mission
is to assist its clients, comprised particularly of foreign investors, to promote
and to develop their activity in Algeria.
culture
The old medina of Algiers “demystified” in Montreal
“Take me to
the Casbah”
On 27 November, under the patronage of Algeria’s Consulate General to
Montreal at the Institute for Mediterranean Studies of Montreal (IEMM), a
conference was held on the theme of “The Casbah of Algiers, between myth
and reality”. This report was given by Dr Redouane Hamza.
The speaker went to great lengths to
“dispel” the myth surrounding the
Casbah by providing full details of the
history of the ancient city, its social
experience
and
its
realities.
Furthermore, in a presentation at the
meeting, the IEMM focussed on the historic and social dimension of the Casbah
of Algiers. “This was a meeting place
where cultures crossed and courted one
other with respect, tolerance and openmindedness”.
In its 2007-2008 programme, it emphasised that this “unique living area of its
time” continues to nurture the collective
imagination of Algerians but also of
Westerners, upholding that the expression “Take me to the Casbah” “leaves no
American indifferent”. This expression
further evokes the mystery and sensuality, whose origin dates back to the film
Pépé le Moko filmed in 1937 by Julien
Duvivier and taken over in 1938 by John
Cromwell in Algiers where the Casbah is
imagined by a euro-centrism in decrepitude. The organisers of this conference
also specify that “the history of the
Casbah of Algiers is closely related to
that of Algeria, as the Casbah is at the
centre of the events of the War of
Independence. The Battle of Algiers and
the demonstrations of 11 December
1960 were decisive factors for the freedom of the Algerian people”.
For his part, the speaker took the floor
to describe the Casbah as a place of tolerance, open to all cultures, a place where
men of different cultures, confessions,
sensitivities and ethnic origins lived in
harmony, constituting a model which
could be used as an example for the
construction of a tolerant, human socie-
ty in harmony with its environment. And
for a more specific and wider idea of
what remains the hidden side of the old
medina of Algiers, the Redouane Hamza
conference provided support, talking of
the myth of the Casbah such as perceived over time by its own inhabitants and
by Easterners who reinforced the
concepts of the myth, inter alia, femininity, difference and mystery. “The
Casbah photographed, drawn, described, recounted and painted has engraved the collective imagination; an imagination which Easterners have upheld in
their anthologies on Islam and which
has encouraged the creation and the
reinforcement of the myth. Colonisation
philosophers made the woman of the
Casbah, in particular, and the Algerian
woman in general, the “key symbol of
the identity of the colony”, the speaker
emphasised to the APS.
“This feminisation of the Algiers society
and culture became a point of reference
of the structure of the colonial power.”
In a typical formulation of a writer from
the start of the 19th century, the entire
country is described as “a wise and dangerous mistress to whom exults a climate of kisses and indolence suggesting, as
an essential, the control of ones body
and of ones mind”, he notes.
☞
Energie & Mines
167
january 2008
CULTURE
culture
Deculturation, myth
and mystery
The myth concerned, therefore, the
colonial discourse and not the Casbah.
And it is this very discourse which defined the Casbah in a group of strong and
resilient concepts.
After a presentation of the site, of its
geographic context, of the historic places inside it and of the men and women
who live there, the speaker recalled that
colonialism initially attacked the symbols
which expressed the soul and the history of the city, then the city itself by
attempting to change its structure, to
remodel it.
The deculturation undertaking was a
project callously carried out by the
French colonial power. “This imperative
of control was disastrous for the medina. The Lower Casbah and, in particu-
Energie & Mines
168
january 2008
lar, the Marina district, the real economic and political lungs of the city, were
simply destroyed to leave room for a
European, arrogant and haughty city
around the Casbah to prevent its expansion”, he further recalled.
Some tens of years later, a decree abolished all the trade corporations, further
to which the lute manufacturers’ corporation disappeared as did many other
trades. “The Casbah of Algiers had a
hundred or so mosques and zaouïas
where the religious songs and qacaïds
were sung. Their disappearance and the
exclusive teaching of the European
music of the 19th century struck a fatal
blow to the traditional music, such as
Aroubi, Malhoun or Andalusian music.
The old city could not resist the advance
of European major and minor tones.”
The radio, television and the cinema
attempted to do the rest, he regrets. But
the Casbadjis will continue to sing as
“singing is also a form of resistance”, he
said. The Palace of the Government, the
headquarters of the administration, and
several important mosques have been
razed, such as the Essayida mosque, and
the names of the streets have changed,
meaning that “the colonial power baptised the streets for want of baptising
men”.
Hence, Rue Randon, a gash in the
middle of the Casbah’s residential areas,
was opened up and an enormous esplanade, large enough to put an infantry
regiment at the foot of the Casbah, was
built, he indicated.
The conference was punctuated with
interludes of traditional Algiers music
and by the reading of poems of Himoud
Brahimi (Momo) on the Casbah.
culture
archaeology
Demarcation of the ancient village
of Youkous in Tébessa
A demarcation project
of the site of Youkous,
an ancient village
located in the commune of El Hammamet,
20km west of
Tébessa, has just
been newly registered
for a million dinars,
we learn from the
Department of
Tourism.
The project, which hopes to promote
the archaeological heritage of this village renowned for its mineral waters, is
part of the tourist expansion zone and
aims, according to the Department of
Tourism, to protect this site which
stretches over an area of 22ha, of which
1.9ha is home to the two cities of Ras
Essour and El Medda comprising the
ancient village.
Overlooked by the “El-ghaba” forest,
the site which belongs to the State is
crossed by the wadi of Bou Akous.
Many baths discovered in the village
testify to a Roman presence dating
back to the 1st century AD. At this
time, the village of Youkous, which the
Romans called Aquae Caesaris, was a
military transit and coordination zone
on the long strategic road between
Carthage and Lambèse (Tazoult,
Batna). The first in North Africa also
set up in this region with inexhaustible
hydric resources and superb nature,
finding, according to historians, a
favourable welcome from the local
populations who quickly converted to
the new religion.
During the colonial period, the French
administration substantially modified
the urban style of Youkous by introducing checkerboard plans with large
boulevards. Famous for its fairytale
landscapes and its greenness covering
the hills and plains, Youkous offers its
visitors an exceptional place of relaxation away from the hectic movements
of the large cities with pure, fresh air
throughout the year. According to the
officials of the tourism sector, the
region of Youkous may be a tourist
centre that generates numerous jobs.
For its part, the commune of El
Hammamet is hoping for private
investment to optimise the use of the
Youkous site and make it a destination
for national and foreign tourists.
The ancient city of Negrine, about
150km south Tébessa, has also been
made a tourist expansion zone, in the
same way as the region of Bekkaria. It
should be noted that there are about
thirty sites of archaeological and historic interest throughout the wilaya of
Tébessa, about ten of which are on the
national heritage list. The other sites
are waiting the carrying out of studies
and digs to determine their historic and
cultural importance, according to the
Department of Tourism.
To this end, the construction of a tourist guidance and study centre is planned with the aim of developing cultural
and ecological tourism in the wilaya.
Acknowledgements
Letter from the Commissioner of the International Gnaoui Music Cultural Festival
To Mr Chakib Khelil Minister of Energy and Mines
“We are honoured and delighted to send you our great thanks for your support, as part of the 1st edition of the International Gnaoui Music
Cultural Festival. We are very proud of your participation as an Algerian partner. This has enabled the organisation to boost the Algerian culture at a high level among the nations which encourage the promotion of Gnaoui music, which advocates cultural universality and opening up to
other rhythms of world music. Today, the festivals, on their own, cannot in any event achieve the major objective which is the event’s success
without the support of industrial establishments and communication. Such an international-scale event will remain politically and culturally fruitful for Algeria. Thanks to your contribution, the Algerian public has been able to experience very intense, festive and unforgettable moments.
The family-orientated and young ambiance, over the six nights, emphasised the value of the knowledge of the Algerian public, which is very
demanding in terms of Gnaoui music. Your support in the form of partnership is an indelible impression for this 2007 festival, and we modestly
consider that this festival has been the star event of the year. Once again, many thanks on behalf of Algerian culture. We look forward to
seeing you at next year’s festival. Yours faithfully,”
The Commissioner of the Festival, Fellahi L.
Energie & Mines
169
january 2008
CULTURE
culture
A century later, the musician remains neglected
Tizi Ouzou remembers
Iguerbouchène
One day, you should discover this Iguerbouchène who succeeded, from a few
notes played on a rosewood flute in the shade of a lane smelling of sea spray
which never ceases to eat the old Algiers, in conquering the world, in his way.
The town of Les Genêts has dedicated
an entire weekend to one of its illustrious men of music, Mohamed
Iguerbouchène. A neglected genius.
Since from his huge collection of work,
only an old “33 rpm” record in a compilation of improvised music was published in the 1970s. Furthermore, his
famous Rapsodie concertante is only
available on one CD at the national
radio level.
Of world renown, the brilliance of this
man quickly went beyond the national
borders. To the man, to the musician
and to an entire collection of work, the
cultural association Eponyme has paid
great tribute by commemorating the
centenary of his birth at the Tizi Ouzou
Cultural Centre.
The man who would become, a few
years later, a classical music composer
of world renown, came into the world in
a small village of Kabylie. Mohamed
Iguerbouchène was born on 13
November 1907 in Tighilt Nazth
Ouchen, in the commune of Les Aghribs
(Tizi Ouzou). In fact, nothing predestined the little Mohamed, particularly
poor and the son of poor people, to
enter the court of the greats of classical
music; it was only a combination of circumstances.
Fate hence decreed that, by playing the
flute in a damp lane of the Casbah of
Algiers where his parents settled in
1919, he gained the attention of a
Scottish count, Fraser Roth, who was
walking in the old town. Fraser Roth
made no hesitation about taking the
young Mohamed to London with him
where he enrolled him at the Royal
Academy of Music which, at that time,
was teeming with famous professors.
His inseparable patron took him, a few
years later, to Vienna to perfect his
Energie & Mines
170
january 2008
musical studies at this city’s conservatory. During a competition organised in
1925, he won 1st prize for composition
and harmony, as well as first prize for
instrumentalisation
and
piano.
Iguerbouchène started composing his
first symphonic works in 1930. In 1937,
when presenting his third Rapsodie
mauresque in London, the audience was
so charmed that it believed, the sounding of his name helping, that this was
the work of a Russian composer, Igor
Buschen. The man who was called Igor
Buschen at this time created a ballet,
Féerie orientale, which was shown on
French television. In 1952, he dedicated
to the Sultan of Morocco a musical
poem entitled Une nuit à Grenade. One
year later, he created a concerto for
piano and symphonic orchestra La
Rapsodie algérienne. With his calling for
symphonic music, he wrote numerous
songs for young Algerian singers of his
time. He composed several musical gen-
res (bolero, mambo, samba) and songs
of the South and of the Orient.
The cultural association MohamedIguerbouchène has thus brought back to
life this entire life dedicated to music by
a man who still remains neglected today.
An entire programme has therefore been
drawn up for this effect to let people discover and get to know this universal
work.
This is done through a whole host of
activities divided between exhibitions,
conferences, choirs, poetry and plays.
The organisers have also been able to
concoct a pilgrimage visit to Tahghilt
Nath Ouchen in the birthplace of the
artist, who has to his credit a collection
of almost 600 musical works. This work
entitled the talented conductor to become a member of the Société des auteurs
et compositeurs de musique.
Mohamed Iguerbouchène died at the
age of 59, on 21 August 1966.