Skip to main content Accessibility help
×
Hostname: page-component-7479d7b7d-pfhbr Total loading time: 0 Render date: 2024-07-11T00:02:59.248Z Has data issue: false hasContentIssue false

13 - Sonatrach: the political economy of an Algerian state institution

Published online by Cambridge University Press:  05 January 2012

David G. Victor
Affiliation:
University of California, San Diego
David R. Hults
Affiliation:
Stanford University, California
Mark C. Thurber
Affiliation:
Stanford University, California
Get access

Summary

Introduction: overarching themes

The hydrocarbons sector is Algeria’s primary source of economic activity and a major source of revenue for the government. As is evident in most other case studies in this book, the authoritarian Algerian government has sought to promote efficiency within its hydrocarbons sector to maximize revenues to the state without relinquishing control over this industry in Algeria. Its strategy has hinged on a national oil company (NOC), Sonatrach, which is involved in virtually every significant oil and natural gas project in the country. Sonatrach participates in joint ventures with other domestic and foreign hydrocarbons companies, owns several subsidiaries, and has recently developed worldwide operations but these operations are still under the control of the government. Sonatrach is a particularly important player in the natural gas market, though its oil production is significant as well.

Across most of the economy, Algeria has pursued a variety of policy reforms aimed at boosting transparency and economic efficiency. Such reforms have encouraged greater competition and have enhanced the performance of the Algerian hydrocarbons industry, but the government’s strong desire to retain control over this sector explains why these efforts at liberalization are invariably abandoned when they diminish the state’s control over Sonatrach. Despite repeated promises for a more liberalized and market-oriented hydrocarbons industry, the status quo of patronage relationships between Sonatrach and the state usually prevails. To be sure, the relative importance of these pressures – liberalization and control – varies with oil prices and other factors. Moreover, internationalization of the hydrocarbons industry has put pressure on Sonatrach to enhance its efficiency quite apart from particular government policies. Yet the overall strategy and performance of Sonatrach’s activities in the hydrocarbons industry in Algeria remain remarkably the same.

Type
Chapter
Information
Oil and Governance
State-Owned Enterprises and the World Energy Supply
, pp. 557 - 598
Publisher: Cambridge University Press
Print publication year: 2011

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

Save book to Kindle

To save this book to your Kindle, first ensure coreplatform@cambridge.org is added to your Approved Personal Document E-mail List under your Personal Document Settings on the Manage Your Content and Devices page of your Amazon account. Then enter the ‘name’ part of your Kindle email address below. Find out more about saving to your Kindle.

Note you can select to save to either the @free.kindle.com or @kindle.com variations. ‘@free.kindle.com’ emails are free but can only be saved to your device when it is connected to wi-fi. ‘@kindle.com’ emails can be delivered even when you are not connected to wi-fi, but note that service fees apply.

Find out more about the Kindle Personal Document Service.

Available formats
×

Save book to Dropbox

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Dropbox.

Available formats
×

Save book to Google Drive

To save content items to your account, please confirm that you agree to abide by our usage policies. If this is the first time you use this feature, you will be asked to authorise Cambridge Core to connect with your account. Find out more about saving content to Google Drive.

Available formats
×