“Total” Prosecutes Sonatrach Over Oil, Gas Profits

National oil company Sonatrach is facing a strange paradox because it entered into a legal battle against a Tri-continental alliance of the multinational global companies, and what is noteworthy is that these companies are from the top three largest economic partners of Algeria namely Italy, Spain and France.

In this context, the French company “Total” entered in the row of the parties that are in conflict with Sonatrach because of the marketing price of gas in Europe, which dates back to the half of last decade, as reported by the French newspaper Le Monde, which pointing out that the international justice was launched by “Total” in coordination with the Spanish energy company “Repsol” .

The dispute revolves around the way that Algeria changed, in the mid of last decade, the way of dividing the profits from oil and gas, as the French government did not express any opinion in the position yet, which comes at a sensitive circumstance that is experienced by the bilateral relationships between Paris and Algiers.

what is also noticeable is that this step by the French “Total” is the weapon of blackmail in the hands of the French government, and it came a few months after the direct accusations by Chakib Khalil, by the same company, when he said that it breached its obligations that were signed by the oil and gas transactions in Algeria, compared to other foreign companies that are operating in the energy sector in Algeria.

Total’s step is a direct response to the accusations of Chakib Khalil, in coordination with the Spanish Repsol, and given what Chakib Khlil, said, Total contrary to Repsol, which withdrew from the project “Ahanat”, and did not resort to arbitration unlike the French “Total”.

Sonatrach’s trouble with the French companies are not new, as the French Technip company resorted last year to international arbitration against Sonatrach, regarding the dissolution of a renovation and expansion of the oil refinery, Sidi Arzine in Beraki (Algiers), which is valued at more than $ 968 million, more than 10.000 billion centimes, while the transaction that is part of the dispute worth about $ 420 million.

Reasons for the dispute is that Sonatrach saw then that the French party did not comply with the book of conditions for the project which included two parts, renovating the old refinery and launching the expansion of its environment, and tried to evade some of the terms of the contract, and this was rejected by Sonatrach which resorted to terminating the contract unilaterally.