• 4 minutes US-backed coup in Venezuela not so smooth
  • 7 minutes Why Trump will win the wall fight
  • 11 minutes Oil imports by countries
  • 13 minutes Maduro Asks OPEC For Help Against U.S. Sanctions
  • 10 hours Climate Change: A Summer of Storms and Smog Is Coming
  • 9 hours Tension On The Edge: Pakistan Urges U.N. To Intervene Over Kashmir Tension With India
  • 10 hours The Quick Read On MBS's Tour of Pakistan, India And China
  • 11 hours Iran Starts Gulf War Games, To Test Submarine-Launched Missiles
  • 10 hours BMW to add 2,000 more jobs at Dingolfing plant
  • 9 hours Teens For Climate: Swedish Student Leader Wins EU Pledge To Spend Billions On Climate
  • 12 hours Saudi A to Splash $100 Bln on India
  • 1 day Itt looks like natural gas may be at its lowest price ever.
  • 11 hours Venezuela: Nicolas Maduro closes border with Brazil
  • 5 hours Washington Eyes Crackdown On OPEC
  • 1 day Amazon’s Exit Could Scare Off Tech Companies From New York
  • 20 hours NEW FERUKA REFINERY
  • 8 hours Indian Oil Signs First Annual Deal For U.S. OilIndian Oil Signs First Annual Deal For U.S. Oil
Alt Text

How Long Will This Oil Rally Last?

Oil prices have been trading…

Alt Text

Rising Energy Demand Could Be A Boon For The Philippines

The private sector is accelerating…

Zainab Calcuttawala

Zainab Calcuttawala

Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…

More Info

Trending Discussions

Can Natural Gas Rescue Algeria’s Ailing Economy?

Algeria is paving the way for a stronger natural gas export profile in Europe, building off of preexisting relationships with Spain, Italy and Portugal, Forbes reported earlier this year. But efforts to restore growth based off energy sector expansion have a limited chance of revitalizing success as two years of low oil prices bear down on government revenues.

"Boosting existing fields and new fields coming online this year will push output up," Sonatrach's CEO Amine Mazouzi said in January.

The Algerian economy needs large-scale government reforms to improve the prospects for its populace in the short and medium terms—and not just the lackluster reforms that entrenched officials have already been pursuing to encourage new businesses and balance the budget by increasing the tax burden on citizens.

President Abdelaziz Bouteflika has spent the last 18 years building a system that offers Algerians subsidized fuel and food for loyalty and national security. The dismantling of this trade-off through overdue austerity measures in December revealed deepening cracks in the North African country’s “stability.”

In January, Interior Minister Noureddine Badawi threatened to “strike with an iron fist whoever tries to destabilize the country’s security” after rioting, complete with burning and vandalism, erupted in Algiers and several other major cities.

Together, the westernmost countries of the Arab world – Morocco and Algeria – represent a bulwark of stability for neighboring Europe, which is preoccupied with preventing unwanted terrorist visitors from chaotic Libya across the Mediterranean.

But the death of 80-year-old stroke-stricken Bouteflika is imminent. The leader’s family has hidden his health status from the public after a 2013 stroke and subsequent hospital stay in France – meaning the president’s closest associates will be pulling the strings until new elections are declared. Related: Iran’s Oil Industry Unshaken By New Sanctions

Unwieldy corruption makes it unlikely that the coming change in guard will be democratic. Senior officials have a made a habit out of over-invoicing imports and exports to personally profit off of the nation’s natural resources. A capital addiction of this intensity won’t be easy for Algeria to kick as deep-seated officials stick to their positions.

Recent attempts at reform have facilitated the creation of new small businesses—which would redistribute wealth to citizens—though too little time has passed to measure the real effects of the policy changes.

In anticipation of a diversified export profile, the government has approved the construction of deep-sea port in the city of El Hamdania with loans secured from China and the African Development Bank.

Once the $3.3 billion facility is fully constructed in 2021, it will process 27 million tons of goods annually, competing directly with rival Morocco’s Tanger Med Port. A road project that starts in the same city will allow Algerian importers to bring goods from the new port into landlocked countries to the south. Related: Oil Markets On A Knife Edge Despite 91% OPEC Compliance

Establishing a balance of trade in Algeria’s favor requires a strong manufacturing engine, which has been slow to take shape.

Manufacturing has seen small victories in Algeria, with Renault Trucks announcing a new 24,000 square meter plant in January that will begin production later this year. The site will employ just 500 people and does not represent a strategic expansion of partnerships that could reshape the national economy. Forty percent of the popular 16-ton truck market is already dominated by Renault Trucks.

As Bouteflika’s time on Earth runs out, much of his country’s reform plans are too little too late.

Zainab Calcuttawala for Oilprice.com

More Top Reads From Oilprice.com:




Download The Free Oilprice App Today

Back to homepage

Trending Discussions


Leave a comment

Leave a comment




Oilprice - The No. 1 Source for Oil & Energy News