Sonatrach is Algeria’s oil and gas company. An acronym for the national enterprise of Research, Production, Transpor-tation, Processing and Commer-cialization of hydrocarbons, Sonatrach is the sole company in Algeria responsible for the exploitation and sale of Algeria’s enormous oil and gas resources.
Although it has yet to enjoy the international brand recognition of the world’s largest oil companies such as Exxon, Shell and BP, Sonatrach is without a doubt a major international player.
With a 2000 turnover of approximately $22 billion, Sonatrach is by far Africa’s largest company. It is the 12th largest petroleum company in the world*, the world’s second largest exporter of LPG (liquid petroleum gas) and the third largest exporter of natural gas.
Its global production (all products included) will grow from 202 million tons oil equivalent (toe) in 2000 to around 250 million toe in 2004.
Its sales represent approximately 95% of Algeria’s total exports and its activities make up 25% to 30% of the country’s annual GDP, while it employs over 50,000 people in the mother company and over 120,000 through the Group.
Sonatrach is on the cusp of a new period of operations and business opportunities. A series of changes and strategies are overseen to fundamentally transform the company’s internal management and prepare it for increasingly fierce competition in the world’s energy markets. This will turn Sonatrach into a high performance, competitive oil and gas company.
In one of the most fundamental changes in its history, the Ministry of Energy and Mines and Sonatrach are putting in place an exhaustive series of reforms that will separate the role of Sonatrach from that of the state. In short, the changes mean that Sonatrach will be required to compete for state contracts and be subject to state taxation, putting it on an equal footing with other oil companies operating in Algeria and eliminating potential conflicts of interest. The reforms will also ensure that the company adopts international standards of management, cuts costs and maximizes profits. And although the state still intends to maintain a majority share in the company (Sonatrach is state-owned), Sonatrach is also focusing on its partnership strategy to expand and improve its operations. This approach has been practiced for more than a decade with convincing success. Sonatrach has signed 53 joint-venture agreements with foreign oil companies in its upstream activities since 1986.
Partnering with foreign firms resulted not only in a significant transfer of international technological and management expertise but, more importantly, in a spectacular increase in the number of oil and gas discoveries.
Sonatrach estimates that production in partnerships, which in 2000 was 24 million toe (12% of the country’s total production), will reach around 73 million toe in 2004 (30% of the total production).
One premier example of Sonatrach’s strategy is its partnership with BP to develop the gas resources of Algeria’s In Salah region. Worth $2.5 billion, this partnership is set to highly increase the gas production of the country.
Given its success, Sonatrach is eager to pursue partnerships in its downstream and upstream activities abroad. This is particularly true in Yemen, where Sonatrach has joined Italy’s AGIP in a production-sharing contract and Germany’s BASF in Spain for the production of propylene. Sonatrach is also participating in a consortium of a pipeline network realization, exploitation and maintenance in Peru and is currently negotiating an exploration block in Iraq.
With its new corporate structure and its eagerness for partnership agreements, Sonatrach is confident that it will be able to surpass the production and sales achieved since its inception in 1963.
Already one of Europe’s most important suppliers of oil and gas, Sonatrach is awaiting the liberalization of the European Union’s energy market with keen interest and is looking even further abroad for opportunities elsewhere around the globe. So if you had not heard of the name Sonatrach before today, you will hear it more often in the future. Sonatrach is set to become a commanding presence in the world’s energy market.

(*) PIW ranking

Djenane El Malik,
Hydra - Algiers, Algeria
Tel.: 213 21 54 70 00 Fax: 213 21 54 77 00
email: sonatrach@sonatrach.dz
http://www.sonatrach-dz.com