Algeria’s uncertain future puts spotlight on Sonatrach
A pipeline in Algeria. The country’s gas exports have fallen and domestic demand has risen. (Saipem)
Algeria’s future is marred by uncertainty. Revenue from its hydrocarbons sector, which provides the bulk of government income, fell by almost 41% in 2015 and is expected to fall further this year. Decisions need to be taken swiftly by Algiers and Sonatrach, but their ability to do so is limited for different reasons.
As the national oil company responsible for managing Algeria’s biggest source of revenue, Sonatrach is feeling the heat. It has said it will raise its gas output to counter the effects of the global oil price crash, planning to maximise production from its existing wells. However, extracting more from Algeria’s ageing wells is no easy task.