New Sonatrach pick reflects Algeria’s infighting

Sunday 26/03/2017

The appointment of Moumen Ould Kaddour as the chief executive officer of Algeria’s state oil and gas company Sonatrach was a bolt out of the blue. Nobody was expecting Amine Mazouzi, who had been appointed less than two years ago, to get fired.
The name of the new CEO was not even whispered in the corridors of power before the impromptu Sonatrach board meeting called March 20th by Algerian Minister of Energy Noureddine Boutarfa. Like his immediate predecessors, Ould Kaddour is a competent techni­cian but has no experience in upstream activities or the commercialisation sector.
Ould Kaddour’s appointment underlines the extent of infight­ing within Algeria’s leading circles. It sends a confused message to Sonatrach’s foreign partners, which are helping to develop Algeria’s vast gas resources and to those countries Algeria is committed to working with to stabilise a north-western African region beset by civil strife (Libya) poverty and terrorism (Libya, Mali, Niger and Tunisia).
Sonatrach is on its sixth CEO since the removal of Chakib Khelil as Energy minister for corruption in 2010. His downfall was engi­neered by the Département du Renseignement (DRS). Khelil fled to the United States but returned to Algiers two years ago, part of a presidentially sanctioned rehabilitation process. Ould Kaddour is close to Khelil and his appointment is considered another step in the rehabilitation of the former minister.
Trials followed the dramatic events of 2010 but those responsi­ble for the massive corruption charges were never brought to trial or charges were dismissed. Second-liners, including Ould Kaddour, were sentenced to prison and then rehabilitated. The sorry affair left a bitter taste in the mouths of millions of Algerians.
Ould Kaddour was in charge of Brown and Root Condor (BRC) in the mid-2000s. This was a joint venture specialising in engineer­ing work between Algerian companies (Sonatrach and the Nuclear Research Centre at Draria) and KBR, the British subsidiary of Halliburton, a major US company whose chairman was Dick Cheney before he became US vice-president.
BRC was alleged to have received kickbacks from Sonatrach and the Ministry of Defence for work carried out at their behest in Algeria during the boom years of high oil prices. None of the senior culprits were held to account. The DRS did press charges of spying for a foreign power to get Ould Kad­dour condemned.
After he left Algeria, Khelil worked at the World Bank, eventually overseeing the Latin America energy department after 1980. In the decade that followed, Argentina and Bolivia came under huge pressure from the US government directly and through the World Bank to privatise state oil and gas companies, which they strongly resisted. It was during those years that the future minister forged strong links with Cheney.
Today, the energy sector is seriously weakened by the fact that neither the minister of Energy nor the CEO of Sonatrach makes key decisions, which occur at the level of Prime Minister Abdelmalek Sellal, a practice unprecedented in modern Algeria.
Prime Minister Ould Kaddour’s appointment will further demor­alise staff at Sonatrach and the Ministry of Energy. The institu­tions were, until a decade ago, the pride of Algeria. This key sector of the Algerian economy — it provides 95% of Algeria’s export income and 60% of government budget income — has traditionally been led by men of the highest integrity and competence. Its engineers and managers enjoyed a strong reputation internationally.
In recent years, however, many have taken early retirement or gone abroad where their skills are appreciated. The culture of international engagement so characteristic of Sonatrach since it was founded in 1964 is vanish­ing as fear of denunciation following events since 2009 means that no one at intermedi­ate levels dares make any deci­sion. This pushes decision-mak­ing to the top where the system is clogged.
With recent ministers and CEOs a pale shadow of their predeces­sors, two key institutions of the Algerian state have been turned into giants with feet of clay.
Ould Kaddour’s appointment may be no more than a minor episode in the endless settling of scores between Algerian security and the presidential circle.
Rehabilitating people close to Khelil is viewed by those close to Algerian President Abdelaziz Bouteflika as another demonstra­tion that they can make and unmake any senior official in Algeria. The president’s feud with the DRS and its predecessor the Securité Militaire (SM) goes back to 1979 when, after president Houari Boumediene’s death, the SM blocked Bouteflika’s candida­ture to succeed Boumediene.
These palace intrigues will have serious consequences for Alge­ria’s reputation. They send a confused signal to foreign partners with whom Algeria is keen to discuss regional issues.
How can such countries engage seriously about the future of Libya, the threat of terrorism in the Sahel and the challenges facing Tunisia with a country whose senior officials are on a perpetual merry-go-round — replaced at the drop of a hat by less competent officials, for reasons as petty as they are difficult to fathom?