ARAB NATIONS
COUNTRY FOCUS – ALGERIA
Algeria encourages foreign investment
compared to the rest of the world. In recent years, however, the nation has worked on opening, modernising and diversifying its economy, and today the economy is considered stable.
A
Changes in the hydrocarbons sector Since 2005, the Algerian Government has relaxed investment rules in the petrochemical sector and more changes are expected to occur as President Bouteflika commits to more liberalisation and market reforms, which include privatisation plans, increasing the education budget to boost the skilled workforce and encouragement of small and medium-sized enterprises. The Algerian economy depends on the hydrocarbon sector,
which represents about 60 per cent of budget revenues, 30 per cent of the GDP and more than 95 per cent of export earnings. The country’s oilfields produce high-quality light crude oils with very low sulphur and mineral contents. More oilfields were discovered recently and there is the potential for new discoveries and an increase in the country’s proven oil reserves. Most of Algeria’s crude oil exports go to the USA and Western Europe. Since 2005 an association agreement between Algeria and the EU has been increasing bilateral trade. Algeria has the eighth-largest reserves of natural gas in the world and it is the fifth-largest natural gas exporter (2008
lgeria is the second-largest country in Africa and the eleventh largest in the world. During the 1990s, Algeria remained closed to foreign investments, which caused its economy to remain flat when
figures). In 2008, Algeria was the world’s fourth-largest supplier of liquefied natural gas and exported 10 per cent of the gas consumed by Europe. In 2009 Algeria ranked fifth as EU’s largest energy provider (5.1 per cent of total EU energy imports), as 98 per cent of imports from Algeria were energy (source: European Commission). Oil production, refining and transportation had previously been monopolised by Sonatrach, the state-owned oil and gas company, but now the sector is open up to foreign investors through partnerships with Sonatrach.
Ruin by the sea in the archeologic site of Tipasa, Algeria.
FDI and a new outlook on resources The Algerian Government aims to attract more foreign investment, as the nation still has the potential to increase its oil production capacity. Australia’s BHP-Billiton has operated in Algeria since 1989, then in 2000 the company also brought Woodside, another Australian company, to work in Algeria’s oil and gas exploration. In 2004, when Algeria held another licensing round for foreign development of oil and natural gas reserves, BHP was one of the seven companies to gain exploration rights. Other natural resources in Algeria are iron ore, phosphates,
Algerian Dinar. 118 AUSTRALIA AND THE ARAB COUNTRIES | 2010
zinc, coal, salt, lead and uranium – Algeria has proven and exploitable uranium reserves, as announced by the country’s energy and mines minister Chakib Khelil in the end of 2009, followed by the country’s call for companies interested in uranium exploration. In January 2010, Algeria signed a cooperation agreement in the fields of energy, nuclear energy, oil and gas with Jordan for the exchange of expertise and technology for uranium exploration. Algeria plans to have its first full-scale nuclear power station working by 2020.
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