Subscribe to our free daily newsletters
  Energy News  




Subscribe to our free daily newsletters



ENERGY NEWS
Algerian energy industry runs out of steam

by Staff Writers
Algiers, Algeria (UPI) Mar 23, 2011
Algeria's energy industry, backbone of the country's economy, is in trouble as President Abdelaziz Bouteflika struggles to avert a popular uprising while locked in a power struggle with the military.

Oil and natural gas production is slipping as foreign oil companies back off, largely because of a hefty 2006 windfall tax under which they have to hand 50 percent of their profits to the state energy monopoly Sonatrach if the price of oil exceeds $30 a barrel.

Since political upheaval in the Arab world erupted in neighboring Tunisia in January, Algeria's leadership has managed to head off a popular uprising by an increasingly restive population fed up with high food prices and the lack of social freedoms. But trouble still smolders.

Algeria has natural gas reserves of 159.1 trillion cubic feet. It's the world's fifth ranking pipeline gas exporter and supplies 13 percent of Europe's gas.

It has oil reserves of 12.2 billion barrels, about 1 percent of the world's total. So if serious trouble does erupt, with Libyan oil production halted, energy supplies would be badly hit.

In a bid to defuse tension, Bouteflika lifted a 19-year state of emergency Feb. 24, while maintaining bans on protest demonstrations in the capital, Algiers.

Bouteflika, president since April 1999, has also unveiled a $286 billion package of economic benefits to placate the disaffected, and largely unemployed, younger generation.

But hard-liners demand his ouster, sweeping political, social and economic reforms, and an end to rampant corruption.

The state of emergency was introduced in 1992, when the military-led government scrapped the second round of national elections that Islamists were set to win, triggering a decade-long civil war in which some 200,000 people died.

Many in Algeria believe it's the memory of those bloody events, including many massacres perpetrated by both sides, that has prevented trouble erupting on the scale of the turmoil that has swept Tunisia, Egypt, Bahrain and Yemen.

Bouteflika focused on reconciling a divided nation when he came to power. An amnesty for Islamic militants and his efforts to reduce the role of the military in public life have restored some stability.

But, except for a brief interlude, he is the only civilian president Algeria has had since independence from France nearly 50 years ago.

So even if Bouteflika, 74, was turfed out by protesters, the generals would remain and they've shown no inclination to relinquish power.

Amid all this turmoil, the energy industry has suffered, to a large extent because Sonatrach, a pillar of Algeria's economy, has been caught up in the power struggle between Bouteflika and the generals, and in particular Gen. Mohammed "Tewfik" Mediene, director of the Intelligence and Security Service.

They've been crossing swords for years but their feud intensified when Bouteflika sought to curb Mediene's power in late 2009. Mediene struck back by launching a high-profile anti-corruption campaign that targeted Bouteflika and his political allies.

Sonatrach Chief Executive Officer Mohammed Meziane, Energy Minister Chakib Khelil and Transport Minister Amar Ghoul were all forced out. Meziane is in prison awaiting trial of graft charges.

Sonatrach got new management but the giant state company and the energy industry as a whole were paralyzed for much of 2010.

Western companies have been increasingly dismayed with Algeria's energy policy for some time and the prolonged upheaval in Sonatrach has only intensified the problem.

An auction of new drilling concessions last week was a fizzle. Only four bids were made -- and one of those was from Sonatrach.

The companies were scared off by the windfall tax and the tough fiscal terms of the production-sharing contracts.

According to the BP Statistical Review, Algeria's oil production slumped by 10 percent, from 2.01million barrels per day in 2005 to 1.81 million bpd in 2009, the last year for which statistics were available.

Gas output fell from 3.1 trillion cubic feet in 2005 to 2.87 trillion in 2009 and trend is still downward.

At the same time, national consumption of gas has risen and this has compromised several export projects.

These include the undersea Medgaz pipeline to Spain, which should have been inaugurated in April 2010, and the Galsi pipeline to Italy, which has been in the planning stage since 2007. Both have a capacity of 282 billion cubic feet per year.



Share This Article With Planet Earth
del.icio.usdel.icio.us DiggDigg RedditReddit
YahooMyWebYahooMyWeb GoogleGoogle FacebookFacebook



Related Links




Memory Foam Mattress Review
Newsletters :: SpaceDaily :: SpaceWar :: TerraDaily :: Energy Daily
XML Feeds :: Space News :: Earth News :: War News :: Solar Energy News


ENERGY NEWS
Japan banks in 2 trillion yen TEPCO finance plan
Osaka (AFP) March 23, 2011
Japanese banks and trust groups will provide around 2 trillion yen ($24.6 billion) to troubled Tokyo Electric Power this month to help cover costs for repairing its power plants, reports said. Three major banking groups - Sumitomo Mitsui Financial, Mizuho Financial and Mitsubishi UFJ Financial - as well as Sumitomo Trust & Banking and Chuo Mitsui Trust and Banking decided Wednesday to offe ... read more







ENERGY NEWS
Power outages could hamper Japanese recovery: IMF

Algerian energy industry runs out of steam

Japan banks in 2 trillion yen TEPCO finance plan

Earth Hour aims for hope in darkened world

ENERGY NEWS
Germans give South Stream major boost

China warns against S.China Sea oil exploration

Oil prices firm on Middle East unrest

Upgrading The Vanadium Redox Battery

ENERGY NEWS
GL Garrad Hassan Helping To Realize Largest US Wind Farm Development

K-State Research Channels Powerful Kansas Wind To Keep Electricity Running

GL Garrad Hassan Announces The WindHelm Portfolio Manager

American Electric Technologies Announces Deployment With Emergya Wind Technologies

ENERGY NEWS
Hawaiian Electric And SunPower Sign Solar Power Agreement

Largest CPV Plant In Latin America To Feature New Skyline Solar X14 System

Nevada Officials And Sempra Generation Dedicate Largest US PV Plant

New Solar Installation On Roof Of World

ENERGY NEWS
Saudis focus on nuclear, solar energy

Radioactive German election looms for Merkel

Fukushima: France sets check of reactors by year end

Oldest US nuclear reactor 'disaster waiting to happen'

ENERGY NEWS
Maquipucuna Cloud Forest In Ecuador Yields New Species (Of Yeast)

Groups protest Kenya biofuel project

Can Biochar Help Suppress Greenhouse Gases

CO2 Emissions From Biomass Combustion

ENERGY NEWS
What Future for Chang'e-2

China setting up new rocket production base

China's Tiangong-1 To Be Launched By Modified Long March II-F Rocket

China Expects To Launch Fifth Lunar Probe Chang'e-5 In 2017

ENERGY NEWS
Intervention Offers 'Best Chance' To Save Species Endangered By Climate Change

Climate change: UN parties complete inventory of pledges

Northern Peatlands A Misunderstood Player In Climate Change

Ancient Hhyperthermals A Guide To Anticipated Climate Changes


The content herein, unless otherwise known to be public domain, are Copyright 1995-2010 - SpaceDaily. AFP and UPI Wire Stories are copyright Agence France-Presse and United Press International. ESA Portal Reports are copyright European Space Agency. All NASA sourced material is public domain. Additional copyrights may apply in whole or part to other bona fide parties. Advertising does not imply endorsement,agreement or approval of any opinions, statements or information provided by SpaceDaily on any Web page published or hosted by SpaceDaily. Privacy Statement