ASSESSMENTS

The Geopolitics of Sonatrach: A History Interwoven With Algeria's

May 31, 2019 | 09:00 GMT

A Sonatrach gas complex in Skikda, Algeria. Over the past 60 years, Algeria's national oil company has become a political actor in its own right.

(NACERDINE ZEBAR/Gamma-Rapho via Getty Images)

Highlights

Sonatrach, Algeria's state-owned oil company, was a product of a nationalist push in the 1960s, as postcolonial Algiers sought to introduce more independence from France and, by consequence, any other foreign power.
As the gatekeeper to Algeria's hydrocarbon holdings, Sonatrach serves as the key generator of economic rents for Algiers, which is why its power has largely stayed intact amid the economic downturns, political swings and liberalization efforts of the past several decades.
Today, Sonatrach remains a driving force behind policymaking in Algeria and has effective approval over any changes to the country's energy laws.
Thus, regardless of Algeria's next government, the competing interests of its political elite, combined with Sonatrach's entrenched political sway and patriotic appeal, will limit the extent of reforms to liberalize Algeria's oil and gas industry.

Algeria's ongoing economic crisis and subsequent paralysis of its oil sector set the stage for the protest movement that ultimately ousted longtime President Abdel Aziz Bouteflika in April. Whoever emerges from the fray to head Algeria's political system next will need to reform the country's oil and gas sector to boost its economy. At the same time, they will need to balance the political power and interests of its national oil company Sonatrach....

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