Algeria’s “milking cow” is about to collapse

Algeria’s energy group Sonatrach may be hit by large casualties which would lead to its collapse after it had resisted since February 1971’s hydrocarbons nationalization, according to a senior official.

The official described the “extraordinary” information leakage about a corruption case between Italians and Algerians with the mediation of  Algeria’s former energy minister Chakib Khalil and former foreign minister’s son Mohamed Bedjaoui as “billiards game as the player who made the first successful shot will be the main player in the rest of the game which may continue until 2014.”

“There are fears in the Algerian oil sector that Sonatrach would lose its balance due to this scandal,” he told Echorouk.

He added that the energy group’s collapse because of the corruption case would harm other government institutions. “The Algerian State stands up on one single foot which is Sonatrach. If it collapses, everything will fall apart like a cardboard pile hit by rains.”

This comes as a large number of foreign executives plan to leave oil and gas sites in southern Algeria following a terrorist attack on a gas complex in In Amenas.

Earlier, Eni chief executive Paolo Scaroni said he met Farid Noureddine Bedjaoui, whom a search warrant said distributed $265 million of bribes to Algerian former energy minister Chakib Khelil and officials at Sonatrach to win gas contracts.

The official believes that Khalil could not benefit from $256 million alone. “That sum is very huge and no western state which deals with Algeria can accept it. The money would have been shared between senior officials,” he said.

Press attaché at British Petroluem (BP) Monday said the group withdrew all its employees from Algeria. They were 14 out of 18 who were in In Amenas , 20 others in In Saleh and 20 in Hassi Messaoud (south of Algeria).

She said BP is not ready to bring its employees back to Algeria before getting sufficient security insurances from the government.

According to an oil expert, Sonatrach needs to look for Algerian specialists to replace the foreign employees who left the country. “Algerian competences are available in Algeria and abroad such as the Middle East, Angola and Venezuela.”