Algeria’s oil and gas exports dropped 41% to 14.6 billion dirhams in the first nine months this year, casting a shadow of deep uncertainty for a country that relies on hydrocarbons for more than 90% of its exports. Most analysts rule out any surge in oil prices as more countries return to full lockdown which entails lower demand. The financial crisis facing Sonatrach is a mirror to the financial hurdles of the whole Algerian state which has shunned reform leaving its economy dependent for 95% of its exports on Sonatrach gas and oil production. Besides a dwindling domestic production, Algeria’s Sonatrach is facing acute competition in its key markets from the US, Russia and other rising oil and gas producing countries. Due to its underdeveloped banking system, unfriendly investment regulations and particularly the lack of security, is increasingly shunned by global oil and gas companies.

Source: The North Africa Journal November 07, 2020 12:56 UTC