Algeria removes Sonatrach management

17 January 2010

Up to 16 top executives are under investigation for corruption

Algiers has removed the chief executive of state energy company Sonatrach, Mohamed Meziane, along with up to 15 other senior Sonatrach officials as part of a corruption investigation.

According to sources in Algeria, Meziane has been told he cannot leave the country and has to report to court officials on a weekly basis while other executives have been arrested.

Analysts report that Meziane was removed from duty on 12 January along with Boumediene Belkacem, vice president for exploration and production, Benamar Zenasni, vice president for pipelines, and Chawki Rahal, vice president for marketing.

According to a report by Samuel Ciszuk, Middle East analyst at the US’ IHS Global Insight, the executives were snared in a probe ordered by the Algeria’s President Abdelaziz Bouteflika. It was conducted by military intelligence officers who looked in to corruption charges relating to undisclosed contract awards.

The case leaves the company without a tier of senior management. Algeria is the sixth largest gas producer and the fourteenth largest oil producer in the world, with Sonatrach overseeing the production and marketing of both resources.

Sources in the country report that Abdelhafid Feghouli, Sonatrach’s vice president for downstream operation, has been placed in charge of the company until further notice.

The state energy firm will continue to operate as normal, Ciszuk says, although major business development decisions will likely be placed on hold for the foreseeable future.

“The company will be paralysed for some time when it comes to business development decisions throughout its areas of operation, and will face delays even in simple areas of business such as contract negotiations in the marketing sector or even ordinary procurement issues,” Ciszuk says. “If for no other reason than because all its transactions and contract awards will be scrutinised more closely.”

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