US company runs “black box” of production sharing between Algeria’s Sonatrach and foreigners

Algeria’s energy minister Youcef Yousfi asked Sonatrach’s CEO Nourredine Cherrouati to review the management of partnership part run by US Schlumberger.

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• The minister ordered to assign oil experts to keep watch on shares calculation in oil and gas projects. Schlumberger is in charge of dealing with the electronic system about those shares. Algerian engineers are not allowed to get the password to enter the data base of production sharing file between Algeria and its foreign partners in oil or gas projects in the south. They are also not allowed to know about some meticulous data on real production shares.
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• Former energy minister Chakib Khelil signed a deal with Schlumberger to be in charge of production sharing activity seen as the biggest secret ever in hydrocarbons productions sector.
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• Shares management is the most serious file in hydrocarbons sector as it is directly related to the share of every company in exportation incomes. A simple error can cause billions of dollars loss everyday. Because of this, there is a need for a meticulous surveillance of this serious stage in hydrocarbons industry phases. Thus, it is necessary to review the positions of executives in charge of the partnership management and the nature of appointments decided by Khelil.
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• According to a close source to Sonatrach, the number of senior executives who left the group between 2002 and 2009 is estimated at more than 220. Most of them joined foreign companies. Because of that, Cherrouati found difficulties in appointing competent persons to replace the officials assigned by Khelil and Sonatrach’s former CEO Mohamed Meziane.
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• CEOs of oil foreign companies operating in Algeria said the dismissal of Chakib Khelil can change the negative image on Sonatrach’s credibility inside Algeria and abroad. The group’s new CEO has understood this message and started reforms by banning wrong decisions made by Khelil and Meziane. That led to create a new management type inside the group and its subsidiaries.