SONATRACH at a Glance – Africa’s Largest Oil Companies

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An overview of Sonatrach.

Sonatrach is a hydrocarbons company owned by the Algerian Government. It was founded in 1963 and has grown into one of the largest oil companies in Africa. It has 154 subsidiaries in various parts of the world. So, it is one of the largest oil companies in the world. It operates in all three categories;

Upstream
Midstream
Downstream

In 2002, its gross sales were 1530 billion Algerian dinars for a net income of 175 billion. The company has employed about 120,000 employees. It addition, it accounts for 30% of Algeria’s total income.

Production and Nature of Operations

The company produces 206 million Tonne of Oil Equivalent (ToE) in a year. In other words, this is equal to 11.7% of the total for the Algerian domestic market. It also operates 3900 km of crude oil pipelines in the country. The critical lines carry crude oil from the Hassi Messaoud field to export terminals.

The company operates oil condensate and LPG pipeline networks. These networks link Hassi R’mel and other fields to Arzew. Also, Sonatrach has diversified into the desalination of Seawater and petrochemistry. The company has also partnered with Mauritania, Yemen, Venezuela, Libya, and Peru.

The hydrocarbons account for almost 60% of the revenue and 95% of export earnings. Algeria also had about 160 trillion cubic feet (Tcf) of proven natural gas reserves by 2005. As a result, Sonatrach has become very important to Algeria’s economy.

In 1998, Sonatrach established a passenger airline company called Tassili Airlines. This was in partnership with Air Algerie. Sonatrach owned 51% of the company as Air Algerie owned 49%. However, in 2005, Air Algerie withdrew its shares in the airline. As a result, Sonatrach claimed the ownership wholly. Furter, In 2006, Sonatrach allowed Tassili Airlines to expand its domestic operations. In future, they aim to go international.

The subsidiaries and ventures of Sonatrach

Sonatrach also owns the following oils companies;

Numhyd which is a joint venture with ETAP in Tunisia
ALEPCO which is a joint venture with National Oil Corporation in Libya.

Further, in 1998, the company acquired Naftal. This company sells petroleum fuels for domestic consumption. Naftal had about 10,000 gas stations in the year 2005.

Naftec operates Algeria’s four main refineries;

Hassi Messaoud
Skikda,
Algiers

Hassi Messaoud refinery supplies products to southern Algeria and has a capacity of 4,800 m3/d. Similarly, the Skikda refinery provides a total of 300,000 BPD. This consists of a variety of Algeria’s refined products. Algiers is a 9,500 m3/d refinery that processes crude from Hassi Messaoud for use in the capital city. Finally, the Arzew refinery provides products for domestic use and export.

The management team.

M.Kamel Eddine Chikhi is the president of Sonatrach. Firstly, His career begun in the Algerian Institute of Petroleum (IAP). He was in charge of training of future company executives in oil and gas trades. Later, In 1996, he assumed the functions of Director and research teacher in topics related to oil tanks.

He joined the exploration department of the upstream activity. While here, he had the mandate to promote partnership. This was through elevating the mining sector. And supervision of work done in collaboration with international oil companies.

He later joined the central structures of the company as a senior manager. In 2012, he became the Executive director of Sonatrach associations. He subsequently became an adviser to the chairman and chief executive officer in 2015. Later, in 2018, he became the director of advice to the general management of Sonatrach.

The Services and Activities of Sonatrach.

Some of the core activities offered by Sonatrach are;

Exploration
Production
Transportation by pipelines
Liquefaction of natural gas, and
LPG separation and marketing

Exploration and production

Algeria is still unexplored. That is to say, there’s still a lot of treasures in Algeria’s soils. Therefore, Sonatrach is funding the exploration and exploitation of these resources. This is, of course, in a sustainable manner.

Transportation by pipelines.

Sonatrach aims at developing a network of transport. For instance, they are building;

Pipelines
Storage
Loading, and unloading facilities.

These infrastructures will be built on the high seas and at the quay. Therefore, it will be easier to transport hydrocarbons. This will be from the mining areas, to the processing centers, and to the market.