Instability Of Officials Negatively Affects The Oil Sector

March 3, 2021

The Algerian example of instability in Sonatrach cannot be found in any company in the world, whether multinational or in national oil companies owned by states, the professor and expert in the field of hydrocarbons, Mourad Berour, told Echorouk.

“Energy Ministry, which owns the mining field and monitors Sonatrach, must also have the necessary stability”, he added.

He explained in response to a question regarding the passage of 8 ministers to the Ministry of Energy during the last decade, and 10 general directors of Sonatrach in the same period, that major companies such as British Petroleum show the name of their next official 6 months before the end of their duties of the current official, while the French “Total”, for example, its first official, Christophe de Margerie, died in a plane crash in Russia, but there were 3 potential managers ready to assume the position of their general manager.

“Even state-owned national oil companies are often mixed with politics and management, but despite this, their chief executives remain in their positions for long periods of 10 years or more, but the most appropriate field of comparison is the international companies that govern and work according to the rules of the petroleum industry”.

“We cannot find the Algerian example of this instability neither in international multinational companies nor in state-owned national oil companies, so it is a unique model in the world and this is unusual”.

“The heads of general managers must have a long stay to be able to develop projects, strategies, etc”.

“For the national oil companies, the owner here is the state as is the case for Sonatrach, and the state has a dual role, as it is the owner of the mining field (underground), and at the same time, it is the owner of the company, so the state must be strict as the owner of the mining field to ensure that the wells are exploited in the best way. On the other hand, the state must be a good owner of the national oil company (Sonatrach)”.

“The good owner of the company means that the state interferes in the board of directors and appoints the president, general manager and the members of the board, but in return, they must be left to work, because there is a board of directors that defends the interests of the owner and the appointment of the responsible must be according to competence and integrity”.

“Supervision is carried out through board meetings, leaving officials to work and to be held accountable in an objective and strict manner based on the results achieved”.

Mourad Berour talked about another aspect related to the relationship of the national company with foreigners and asserted that this instability harms the country’s image with international companies, which today talk with a Sonatrach official and the next day they do not find the same official in the same position when they contact him, and this is a matter that usually pushed the foreign companies to refrain from working with the Algerian side.

“The matter also applies to the Energy Ministry of Energy, which is the manager of the mining field, and the Sonatrach company monitors, so there must also be stability at the Ministry of Energy level which must not change so quickly”.

echoroukonline


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