Anti-government rallies in the capital of Algeria, inspired by events in Egypt, were broken up last night by government services.
Reports emanating from outside the country have suggested in tone that the movement is a logical extension of what has happened in Egypt, though local residents have denied that internet access has been curtailed and social networking are operating as usual.
The BBC website on Sunday reported that riot police in Algiers dispersed thousands of people who had defied a government ban to demand that President Abdelaziz Bouteflika step down. However, Fatma Douifi, a housewife in Blida, told ArabianOilandGas.com last night that the numbers on the streets were much smaller than those appearing in the international press.
A march in Yemen’s capital, Sana’a, calling for President Ali Abdullah Saleh to leave office was attacked by pro-government supporters. Egypt’s Hosni Mubarak stepped down on Friday after 18 days of mass protests.
Both Yemen and Algeria have recently witnessed demonstrations for greater freedoms and improved living standards.
However, fears that the protests could escalate have been exacerbated by the potential impact on energy markets. Algeria is a key supplier of gas to Europe, and a major holder of oil reserves.
The BBC reported from Algeria that armoured vehicles were placed at strategic points across the capital city of Algiers, with water cannons on standby and a helicopter circling above the centre. Public demonstrations have been banned in Algeria under a state of emergency in place since 1992.
Protesters chanting “Bouteflika out!” – in reference to the country’s president, who came to power in 1999.
To date no oil or gas exports have been disrupted, but further major protests have not been ruled out. Widespread unrest in Algeria could, should the situation deteriorate, have implications for the world, and in particular European economy. Although unemployment is high and poverty is endemic, the country is a major oil and gas exporter. Wealth has been concentrated in the hands of the ruling elite, and corruption is one of the key issues driving a wide cross section of society to the streets.
However, few people expect a revolt similar to the Egyptian people-power uprising witnessed last month. The Algerian government has enough liquidity in hydrocarbon-derived revenues to meet most people’s demands. The demonstrations across Algeria have been much smaller and dispersed much sooner.
Algeria In Profile: An Energy Giant
Algeria is an important exporter of oil and natural gas and is a member of the Organization of the Petroleum Exporting Countries (OPEC). The country achieved political independence in 1962 after more than a century of colonial rule by France. Algeria’s struggle for independence was one of the most bitter in Africa’s colonial history.
It has a population of more than 35 million, with over 3.5 million living in the capital, Algiers. Arabic is the official language, while French and Berber Tamazight are also spoken.
The hydrocarbons sector is the backbone of the economy, accounting for roughly 60 per cent of budget revenues, 30 per cent of the gross domestic product, and more than 95 per cent of export earnings. The country’s other natural resources include iron ore, phosphates, uranium and lead.
The country joined OPEC in 1969. Algeria’s first commercial oil discovery was Edjelleh in 1956, followed immediately by the Hassi Messaoud oil field the same year. Production began in 1958. With an estimated 6.4 billion barrels of proven oil reserves, Hassi Messaoud is Algeria’s largest oilfield, producing more than 400,000 b/d. With the start-up of the Arzew GL4Z plant in 1964, Algeria became the world’s first producer of LNG.
The Energy Information Agency says that in 2008, Algeria produced 1.42 million bbl/d of crude oil. Algeria was the fourth largest crude oil producer in Africa after Nigeria (1.94), Angola (1.89), and Libya (1.71) and the largest total oil liquids producer on the continent.
As a member of OPEC, Algeria’s crude oil production can be constrained by the group’s crude production allocations, but Algeria also produced 450,000 bbl/d of condensate and 357,000 bbl/d of natural gas liquids, which are exempt from OPEC quotas, bringing total oil liquids production for the year up to a total of 2.23 million bbl/d. Domestic oil consumption accounted for about 13 percent of total production.
The EIA says that Algeria was the sixth largest natural gas producer in the world in 2007 after Russia, the United States, Canada, Iran, and Norway. Algeria produced 3.03 trillion cubic feet of natural gas in 2007, of which 70 percent was exported and 30 percent was consumed domestically.
Algeria has an estimated 12.2 billion barrels of proven oil reserves, the third largest in Africa (behind Libya and Nigeria).
Algeria’s dry natural gas exports totaled 2.10 Tcf in 2007, down slightly from 2.17 Tcf in 2006. Almost two-thirds of Algeria’s total natural gas exports currently move through two natural gas pipeline connections operating between Algeria and Europe; the remaining one-third of total natural gas exports is exported in the form of LNG. The 670-mile, 2.32-Bcf/d Trans-Mediterranean (Transmed, also called Enrico Mattei) line runs from Hassi R’Mel, via Tunisia and Sicily, to mainland Italy. Completed in 1983 and doubled in 1994, there are plans to construct an additional compressor station along the Transmed that could increase capacity to 3.48-Bcf/d.
An international consortium, led by Spain’s Enagas, Morocco’s SNPP, and Sonatrach, operates the 1,000-mile, 820-Mmcf/d Maghreb-Europe Gas pipeline, completed in 1996, which connects Hassi R’mel via Morocco with Cordoba, Spain, where it ties into the Spanish and Portuguese natural gas transmission networks.
Algeria’s LNG exports currently make up about one-third of the country’s total natural gas exports and are expected to increase in the mid-term, when the Skikda plant comes back online. About 898 Bcf of LNG was exported in 2007, compared with 844 Bcf in 2006. Most of Algeria’s LNG exports go to Europe: about 729 Bcf in 2007 compared with 800 Bcf in 2006.
Algeria is the fourth largest exporter of LNG (behind Qatar Indonesia, and Malaysia), exporting around 11 percent of the world’s total in 2006. Primary customers are France, Spain, and Turkey. Also in 2007, Algeria exported 77 Bcf of LNG to the United States, some 10 percent of total US LNG imports for that year. Algeria’s largest LNG export terminal is the Arzew facility, whose three facilities combined produced an estimated 1,183 Bcf of re-gasified LNG in 2007. Other important terminals include Skikda and Algiers.
However, the Skikda LNG plant is being rebuilt after an explosion in 2004 and is not expected to come back online until 2013.
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