Few Algerians know that since November 2017 the country had been engaged in an ambitious industrial project in a joint venture between Sonatrach and the US’ Baker Hughes General Electric (BHGE). It was intended to manufacture, assembly and maintain various types of pressure control equipment including strategically important well heads and thereby replace equipment currently being imported by Sonatrach at a cost of several hundred million dollars.

The Algerian Petroleum Equipment Company (APEC) was establishing a 20,000 m² manufacturing plant in the Arzew industrial zone, 25 kms east of Oran, in order to provide some of the most efficient manufacturing capacities in North Africa to strengthen Algeria’s upstream activity of the oil and gas market.

The project — which drew on BHGE’s world class experience — was scheduled to be launched in late 2019. The political events that shook Algeria throughout 2019 and the instability that impacted Sonatrach during 2019-2020 delayed the project’s launch.

We now have evidence however that the project has been completely sabotaged by Toufik Hakkar who has been Sonatrach’s CEO since February 2020. Industry sources have revealed that Hakkar quietly and deliberately decided to abandon the project by dissolving APEC. According to these same sources, this chaotic and seemingly absurd decision, which was not published in Algeria and is therefore largely unknown to the general public, created a shock wave among hydrocarbon sector investors. 

This project was at a very advanced stage, with the US partners insisting on maintaining control of the project, which would reduce Algeria’s dependence on imports and develop a number of qualified and certified SMEs. 

Its cancellation and the dissolution of APEC has never been explained beyond bald statements that there was a misunderstanding between Toufik Hakkar and BHGE. Since he took over the corporation Hakkar has been openly hostile towards US or Anglo-Saxon companies. The apparent aim is to replace them with other partners who are much more ‘flexible’ — a euphemism for corrupt — and less interested in controlling the financial transparency of groups or partnerships concluded with Sonatrach.

Another example of this policy has been Sonatrach’s favouring Russia’s leading steel pipe producer, TMK, on which Algeria Politics & Security – 27.11.20 reported. 

Many senior government ministers and top Sonatrach managers have long records of corruption and accepting bribes from potential foreign suppliers and investors. No public allegations have yet been made that any may have accepted bribes from Russian or other international companies, or their agents, but questions must be asked as to why Hakkar appears to favour companies that are more ‘flexible’ and less interested in financial transparency. With the new spate of allegations enveloping Sonatrach since he took over, albeit protected by Prime Minister Abdelaziz Djerad, it would be prudent for the intelligence services to divert some of their energy from repressing the Hirak to undertaking a judicial and financial investigation of Sonatrach, if only to ensure that it does not inflict more lasting reputational damage on the country.