Abdelmoumen Ould Kaddour, CEO, Sonatrach : Interview

Interview : Abdelmoumen Ould Kaddour

What is being done to ensure mutually beneficial partnerships with international companies?

ABDELMOUMEN OULD KADDOUR: Current and future partnerships are a core part of our SH2030 strategy. Since early 2017 most litigation with partners have been resolved, and our goal is for Algeria to once again begin attracting major global actors. Considering this, in early October 2018 we signed two deals with Total, with the aim of developing the Erg Issouane gas field and setting up joint ventures for petrochemical projects. In addition, our hydrocarbons law is being changed in order to attract both partners and foreign investors. The law is expected to be ready for implementation at the beginning of 2019. Amendments may include tax incentives and the loosening of administrative procedures.

How will Algeria continue to take advantage of its conventional and unconventional resources?

OULD KADDOUR: Sonatrach focuses both on securing the top performance of activities related to conventional resources and on pursuing the development of Algeria’s unconventional resources. We aim to double our annual figures for conventional resources, most notably through frontier exploration. Likewise, production of conventional fields can be significantly increased in the shorter term by optimising well performance and over the longer term by developing enhanced oil recovery techniques. Productivity in drilling is also a focus, and we aim to eventually drill twice as many wells per rig as we do currently.

In regards to unconventional resources, Algeria’s unconventional hydrocarbons, such as shale gas and shale oil, offshore hydrocarbons and solar energy should be exploited. Sonatrach will lead the way in developing these resources and enhancing progress made via partnerships with other companies. We will also focus on partnerships we have established for two priority petrochemical projects; however, most time will be spent on portfolio projects such as purified terephthalic acid, polyethylene terephthalate and rubber so that they can mature and be executed in a timely manner. Sonatrach has set up a unit dedicated to managing these partnerships to ensure the ongoing development of petrochemicals.

What can be done to improve the participation levels of local Algerian companies?

OULD KADDOUR: Our goal, which has been set with the government, is to increase local content rates from 40% to 55% by 2030. This is a strong national commitment to promote the Algerian economy, and the first step towards this goal is the implementation of a clear and defined local content policy for Sonatrach.

Significant measures are being implemented to promote local content, and ambitious targets at all levels will be established. New procurement procedures are being deployed all over the company, taking into consideration local choice of goods and services companies, and committing to the future development of a national engineering and manufacturing sector. In particular, a procurement and logistics organisation is being established, which will allow local suppliers to increase their overall competitiveness.

How can companies arrange their organisations to maximise efficiency within management structures?

OULD KADDOUR: We need to put performance at the heart of our business and this includes the evolution of our key processes. At a level like human resources, we need to make careers more attractive and diverse. Additionally, management of deadlines is fundamental to our projects and can be improved with the creation of an engineering department that follows these projects.

Centralisation of procurement and logistics is an imperative step to simplify processes, improve performance and reduce costs. Likewise, the performance of each of our activities must be measured and verified in a simple, fast, quantitative and rigorous manner.