Algiers – “Things are moving positively. We still need fossil energy. We are developing more renewable resources, but we will still be using gas and oil for a long time. Fossil energy has a bright future in Algeria.” In an exclusive interview with the global research and consultancy firm Oxford Business Group’s Global Platform, Sonatrach CEO, Abdelmoumen Ould Kaddour, shares his vision of the future of his corporation and Algerian energy sector as part of the implementation of the SH2030 strategy which was unveiled to the media at a press conference on April 30, 2018, at the company’s Head Office.
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The video is available on the Oxford Business Group website https://oxfordbusinessgroup.com/video/abdelmoumen-ould-kaddour-ceo-sonatrach
“We want to increase our gas production and give it added value. Algeria has no constraints, no limit on the number of cubic meters it can sell, unlike oil, for which OPEC imposes export quotas. Furthermore, petrochemicals will be the most important development sector for Sonatrach in the next century,” explains Ould Kaddour, Doctor of Chemical Engineering from the American University Massachusetts Institute of Technology (MIT) who was appointed head of the state-owned company in March 2017.
The largest company in the sector in Africa, responsible for ensuring energy security for future generations by enhancing national hydrocarbon resources, has become a major energy exporter on a global scale.
The company has natural gas pipelines and LNG tankers that allow shipping not only in Europe, its main customer to date, but also to new markets, like Asia. “We started exporting some of our LNG to South Korea, China and elsewhere,” says Ould Kaddour. The entry into production of the gas field of Timimoun in March 2018 must fully contribute to this dynamic. The project, which is expected to produce 1.8 billion cubic meters of gas per year, is operated jointly by Sonatrach (which holds 51% of the shares), Total (37.75%) and Cepsa (11.25%). Also, the launch of the exploitation of the Touat gas field, a partnership between Sonatrach (35%), Engie (30%) and Neptune Energy (35%) is also due before the end of the year.
With the 'first gas' of the Reggane Nord project carried out at the end of 2017, these three projects should lead to a rise in total gas production of around 9 billion cubic meters per year. They will be connected to the new GR5 gas pipeline, which, along some 765 km, will transport gas to the Hassi R'mel treatment center in the north-central region of the country.
In parallel, the purchase of a refinery and three oil terminals located in Italy and belonging to Esso Italiana, a subsidiary of the American firm Exxon Mobil, as well as the partnership with Total for the construction of a petrochemical complex in Algeria, are two new advances that are fully in line with Sonatrach's strategy of internationalization and development of downstream activities.
Another essential axis, Sonatrach plans to use solar energy in all oil or gas fields. “Each installation consumes up to 20% of its production. The use of solar energy to meet the needs of each installation is absolutely necessary. By 2030, all oil and gas fields will use solar energy to power their facilities, says Ould Kaddour, who emphasizes the role of foreign partners in achieving these goals. Partners are important for the development of the country for many reasons.”
With his experience in managing intricate projects in partnership with international operators, Ould Kaddour has worked to resolve a number of latent disputes with his foreign partners since taking office, thereby restoring dialogue and trust, and to revive structural projects like the rehabilitation of the Algiers refinery. Once completed, the refinery will increase its processing capacity from 2.8 million tons to 3.7 million tons and increase its fuel storage capacity by 73%.
This approach is welcomed by Sonatrach’s partners, as highlighted by Claudio Descalzi, CEO of Eni, Pedro Mirό Roig, CEO of Cepsa and Arnaud Breuillac, President E&P of Total, during the Scientific and Technical Days (JST) organized by Sonatrach in Oran in April. A statement shared with OBG by Marvin Welsh, Petroceltic’s Global Manager: “The recent improvement in the collaboration between Sonatrach and the regulatory organizations is a positive signal for better project performance.” Referring to consultations prior to an adaptation of the regulatory framework, Ould Kaddour said, “we are moving forward, we are changing our law on hydrocarbons, we must lead the change to become even more effective. ”
With a new slogan “leading the change”, Sonatrach intends to focus on modernizing management, human resources and innovation to make the company not only a leader in the exploitation of fossil fuels, but also to register as a global player in the new energy economy of the 21st century. A $ 56 billion investment plan for 2018-2022 has already been announced to support this strategy. “I like Algeria. We are going to do some promising things for this country and for its people,” concludes Sonatrach’s CEO.
According to OBG’s Director of Communications and Managing Director of Global Platform, Marc-André de Blois, this exclusive interview shows the importance of the energy industry and Sonatrach, whose contribution to the national economy represents 30% of GDP. “In this exclusive video, the CEO summarizes the potential of the Algerian energy sector and the prospects for development and diversification in the medium and long term. The strategic shift undertaken by Sonatrach’s management through its SH2030 vision must fully integrate the company into a new dynamic well adapted to the changes in the global energy sector.”
The video is available on the Oxford Business Group website https://oxfordbusinessgroup.com/video/abdelmoumen-ould-kaddour-ceo-sonatrach
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© Press Release 2018
