Algeria to take months to make final Total deal decision

Total

A deal involving Total is likely to be closely scrutinised as Algeria which remains wary of investments by French companies given the country’s past as a former colony

Algeria could take months to decide if Total can buy Anadarko’s assets in the North African country as officials focus on the political transition after April’s ousting of President Abdelaziz Bouteflika, two Algerian energy industry sources said. Occidental Petroleum has agreed to sell Anadarko’s assets in Algeria, Ghana, Mozambique and South Africa to France’s Total for $8.8bn if the US oil company succeeds in completing a takeover of Anadarko. But the deal comes at a sensitive time for Algeria, which has been shaken by the mass protests which forced out Bouteflika on April 2 and are continuing to demand wider political reforms. A deal involving Total is likely to be closely scrutinised as Algeria which remains wary of investments by French companies given the country’s past as a former colony.


Although Total signed energy deals with Algeria in 2018, some Algerian officials fear France will get too much control over its energy sector, one energy industry source said. Energy minister Arkab Mohamed said on Sunday that Algeria will block the sale, but a day later struck a more diplomatic saying that Algiers wanted to seek a compromise. He also said that state oil and gas firm Sonatrach needs foreign partners to implement its development programmes. Anadarko’s holdings in Algeria represent about 260,000 barrels per day (bpd) of oil, more than 25% of the country’s crude production, which is estimated at 1mn bpd. Algeria has stopped previous business deals with foreign firms.


In 2010 it blocked the sale of Djezzy, the Egyptian Orascom telecom operator to South Africa’s MTN. A second energy source said the government was unlikely to make a final decision on the Total deal as it was only meant to be in place until presidential elections planned for July 4. But a political source told Reuters this month the vote might be postponed as protests meant more time was needed. “The timing not is appropriate, Algeria is busy with the post-Bouteflika transition,” the energy industry source said. However, the other energy source reiterated Algeria’s opposition to the Total deal, saying that Sonatrach “needs to be able to choose its partners”. Relations between Algeria and France remain scarred by the trauma of the 1954-1962 independence war in which hundreds of thousands of Algerians were killed.

Sources and photo-credits: Reuters, Gulf Times