By Christian Lowe and Lamine Chikhi
ALGIERS, May 3 (Reuters) - An industry veteran was named as head of Algeria's state energy firm on Monday, an appointment aimed at restoring stability to the company, which supplies one fifth of Europe's gas, after a damaging corruption probe.
Nourredine Cherouati, who until now was head of an energy sector regulator, takes over as chief executive of Sonatrach four months after the previous holder of the post was removed as part of a judicial investigation into corruption allegations.
In a statement on its Internet site, Sonatrach said Algerian Energy and Mines Minister Chakib Khelil had introduced Cherouati to staff as the new chief executive in a closed-door ceremony at the company's headquarters on Monday afternoon.
Cherouati has since 2005 been head of the Hydrocarbon Regulatory Authority, one of two main state regulators in the energy sector. His other roles have included that of No. 2 at the Energy Ministry, and general manager of Naftal, the state-owned fuel retailer.
Algeria exports more than 60 billion cubic metres (bcm) of gas a year and is the world's eighth biggest exporter of crude oil. Sonatrach has a monopoly on oil and gas exports from Algeria and is sole operator or partner in all energy projects.
Previous chief executive Mohamed Meziane was removed from his post in January after he was put under investigation, along with several other senior executives, over allegations that contracts had been improperly awarded.
Since Meziane's removal, Abdelhafid Feghouli, previously Sonatrach's vice-president for downstream activities, has been acting as caretaker chief executive.
'Cherouati ... will place the emphasis on stability,' Abdelmajid Attar, who was a Sonatrach CEO in the 1990s, told Reuters. 'It was time that we got rid of the interim situation. It's good news for Sonatrach.'
The appointment is likely to cheer foreign operating oil firms in Algeria, which include BP, Anadarko and Total. Some oil executives said uncertainty caused by the corruption scandal disrupted work on joint projects.
CHALLENGES AHEAD
Analysts said there had been pressure from parts of Algeria's government to appoint a Sonatrach chief executive from outside the energy sector, an outcome that would have weakened influential energy minister Khelil.
'Overall, the appointment of Cherouati is a plus for Khelil and demonstrates that the corruption investigations into Sonatrach have not completely undermined his influence,' said Geoff Porter of Eurasia Group consultancy.
'It remains to be seen, though, how quickly this new management team will be able to address the backlog of Sonatrach projects and keep the company moving forward.'
One challenge facing the new chief executive is to help meet Algeria's target of creating the capacity to export up to 85 bcm of natural gas per year by 2012.
A vital component in the plan, the Medgaz pipeline from Algeria to Spain, has been delayed repeatedly and is now slated to start operating this July. Completion of the planned Galsi gas pipeline to Italy has slipped back two years to 2014.
Another problem for Cherouati is that Algeria's supply of new energy projects -- which it needs to sustain production levels -- is looking meagre after two successive licensing rounds attracted only lacklustre interest from foreign firms.
Khelil has said a fresh licensing round will be held this December and that terms will be more attractive to international investors. But some foreign energy executives say they are sceptical that there will be much improvement.
As part of the new line-up of senior Sonatrach executives unveiled on Monday, former interim boss Feghouli was named as an advisor to Cherouati, a source close to the company said.
(Writing by Christian Lowe; editing by Marguerita Choy) Keywords: ENERGY ALGERIA/SONATRACH (maghreb.newsroom@thomsonreuters.com; tel: +213 21727020) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
ALGIERS, May 3 (Reuters) - An industry veteran was named as head of Algeria's state energy firm on Monday, an appointment aimed at restoring stability to the company, which supplies one fifth of Europe's gas, after a damaging corruption probe.
Nourredine Cherouati, who until now was head of an energy sector regulator, takes over as chief executive of Sonatrach four months after the previous holder of the post was removed as part of a judicial investigation into corruption allegations.
In a statement on its Internet site, Sonatrach said Algerian Energy and Mines Minister Chakib Khelil had introduced Cherouati to staff as the new chief executive in a closed-door ceremony at the company's headquarters on Monday afternoon.
Cherouati has since 2005 been head of the Hydrocarbon Regulatory Authority, one of two main state regulators in the energy sector. His other roles have included that of No. 2 at the Energy Ministry, and general manager of Naftal, the state-owned fuel retailer.
Algeria exports more than 60 billion cubic metres (bcm) of gas a year and is the world's eighth biggest exporter of crude oil. Sonatrach has a monopoly on oil and gas exports from Algeria and is sole operator or partner in all energy projects.
Previous chief executive Mohamed Meziane was removed from his post in January after he was put under investigation, along with several other senior executives, over allegations that contracts had been improperly awarded.
Since Meziane's removal, Abdelhafid Feghouli, previously Sonatrach's vice-president for downstream activities, has been acting as caretaker chief executive.
'Cherouati ... will place the emphasis on stability,' Abdelmajid Attar, who was a Sonatrach CEO in the 1990s, told Reuters. 'It was time that we got rid of the interim situation. It's good news for Sonatrach.'
The appointment is likely to cheer foreign operating oil firms in Algeria, which include BP, Anadarko and Total. Some oil executives said uncertainty caused by the corruption scandal disrupted work on joint projects.
CHALLENGES AHEAD
Analysts said there had been pressure from parts of Algeria's government to appoint a Sonatrach chief executive from outside the energy sector, an outcome that would have weakened influential energy minister Khelil.
'Overall, the appointment of Cherouati is a plus for Khelil and demonstrates that the corruption investigations into Sonatrach have not completely undermined his influence,' said Geoff Porter of Eurasia Group consultancy.
'It remains to be seen, though, how quickly this new management team will be able to address the backlog of Sonatrach projects and keep the company moving forward.'
One challenge facing the new chief executive is to help meet Algeria's target of creating the capacity to export up to 85 bcm of natural gas per year by 2012.
A vital component in the plan, the Medgaz pipeline from Algeria to Spain, has been delayed repeatedly and is now slated to start operating this July. Completion of the planned Galsi gas pipeline to Italy has slipped back two years to 2014.
Another problem for Cherouati is that Algeria's supply of new energy projects -- which it needs to sustain production levels -- is looking meagre after two successive licensing rounds attracted only lacklustre interest from foreign firms.
Khelil has said a fresh licensing round will be held this December and that terms will be more attractive to international investors. But some foreign energy executives say they are sceptical that there will be much improvement.
As part of the new line-up of senior Sonatrach executives unveiled on Monday, former interim boss Feghouli was named as an advisor to Cherouati, a source close to the company said.
(Writing by Christian Lowe; editing by Marguerita Choy) Keywords: ENERGY ALGERIA/SONATRACH (maghreb.newsroom@thomsonreuters.com; tel: +213 21727020) COPYRIGHT Copyright Thomson Reuters 2010. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.