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Algeria Appoints New Central Bank Chief, Head of Sonatrach as it Adopts Energy Law

Algeria Appoints New Central Bank Chief, Head of Sonatrach as it Adopts Energy Law

Thursday, 14 November, 2019 - 19:00
FILE PHOTO: View of the headquarters of the state energy company Sonatrach in Algiers, Algeria June 26, 2016. REUTERS/Ramzi Boudia/File Photo

Algeria on Thursday named Benabderahmane Ayman its new central bank governor, and appointed Kamel Edine Chikhi as the new head of state energy company Sonatrach, state television reported.

The appointments were made on the same day the lower house of parliament approved a new energy law aimed at attracting more foreign investment.

The National Popular Assembly vote on Thursday came a month after the draft legislation had been approved by the government.

Although the text has not been officially published, the plan has stirred passions among a months-old anti-regime protest movement that fears "the nation's wealth" is being sold off to foreign oil companies.

Experts say the new law is expected to keep Algeria's oil and gas wealth firmly in the hands of the state.

While the text makes "adjustments" to the legislation, "the broad direction of Algerian policy on oil and gas is absolutely not called into question," said industry expert Francis Perrin.

It will guarantee that state-owned oil company Sonatrach has a majority stake in all projects involving foreign players, said Perrin, director of research at the French Institute for International and Strategic Affairs.

The law aims to "make the legislative and tax framework more attractive, simple and flexible, to draw more (foreign) investments in the oil and gas sector," he added.

Many Algerians suspect those in power plan to hand over Algerian natural resources to foreign firms with the new law, having already "squandered" oil revenues, said Paris-based economics professor El Mouhoub Mouhoud.

"These opinions are a testament to the current government's lack of credibility in the eyes of the people," said Mouhoud.

Nevertheless, everything "suggests that in this new draft law, the mineral title (rights to underground resources) stays in the hands of the state, while exploitation and investment operations can be shared" he added.

Oil and gas sales account for 60% of Algeria's state budget and 94% of exports, but they have fallen because of a reduction in crude prices since 2014 and higher domestic energy consumption.

The upper house must vote on the bill in coming weeks but the timing for it to be signed into law remains in doubt due to a Dec. 12 presidential election, which protesters want cancelled.

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