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Damir Kaletovic

Damir Kaletovic

Damir Kaletovic is an award-winning investigative journalist, documentary filmmaker and expert on Southeastern Europe whose work appears on behalf of Oilprice.com and several other news…

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This Is the Algerian End Game That Has Oil Investors Worried

Protests

Protests that erupted six weeks ago in Algeria have now transformed into a million-strong force against aging Algerian strongman President Abdelaziz Bouteflika, with Exxon having already called the political unrest endgame when it stalled talks over a major Algerian shale deal just over a week ago.

For investors in this oil- and gas-rich venue that is critical most immediately to Europe, the uncertainty is high enough to put everything on hold.

Mass protests across Algeria erupted when Bouteflika announced he would run for a fifth term as president. Those protest forced him to rescind that decision, but the momentum against him failed to subside. Instead, it has increased and intends to do so until he steps down entirely.

On Friday, news wires around the world reported that a million had gathered to protest against the president’s rule, with fighting a losing battle using tear gas.

But what signals Bouteflika’s doom more than anything is the fact that the million-strong protests were covered live on three state TV channels. Traditionally, there would have been a local media blackout.

In other words, Bouteflika is losing support—quickly—and now everyone is watching the military kingmakers to see where this ends.

In large part, the kingmakers have already spoken, which has given further impetus to the protests. Earlier this week, the army chief called for a constitutional process to declare the aging and ill Bouteflika unfit for office.

But for investors, what happens next is a tricky transition process, for which opposition leaders have agreed to a roadmap, but for which uncertainty is the ruling element.

The current presidential appointment ends on April 28, and the opposition is suggesting the creation of a presidential authority body that would be in power for less than six months and whose representatives would not be allowed to run for office or back any candidates after the transition period.

By Damir Kaletovic for Oilprice.com

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  • Ryad Rizouk on March 30 2019 said:
    I would argue that the biggest risk to oil and gas supplies coming out of Algeria which predominantly go to Europe is a strike action by workers of Sonatrach (the state owned oil and gas company). Algeria during its decade long insurgency which left more than 200000 dead never failed to produce and ship the black gold which accounts for over 95% of its export. Having said that if protesters were to clash with the security forces and the military were to crack down heavily and clear the streets then the mobilisation might take another form such as a general strike across all economic sectors including the oil and gas sector, whilst Sonatrach workers are among the best paid workers in Algeria, it will be difficult to envisage a scenario whereby oil workers will not join in any organised strike whose objective will be to force the regime out of power which includes its main pillar the military. If this were to happen then we are talking about 2m barrels of oil equivalent being removed from the market albeit for a short period of time causing a shock to the system. So watch this space!

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