Algeria lets $908 million refinery contract to Technip

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Sept. 24 -- Algeria’s state-owned Sonatrach said it awarded a $908 million contract to Technip to refurbish the 60,000-b/cd refinery at Algiers. Work on the refinery will take 38 months to complete at a cost of 67.8 billion dinars ($908.2 million), Sonatrach said.

The work at the refinery is part of a modernization plan that will see construction of a new refinery southwest of Algiers at Tiaret. Algeria currently has four refineries with a combined capacity of about 450,000 b/cd.

Analyst IHS Global Insight saw the awarded contract as a significant development for the state-owned firm. “The fact that a contract has now been awarded signals that Sonatrach is coming out of its decision-making paralysis,” the analyst said.

The Technip contract is the first major project awarded by Sonatrach since January, when the chief executive and several senior executives were removed from their posts as part of an investigation into corruption. As part of the fall-out, Nourredine Cherouati was named as Sonatrach’s new chief executive, replacing the long-serving Energy minister Chakib Khelil.

In January, Khelil was quoted as saying Algeria’s oil and gas production was unaffected by allegations of corruption among officials at Sonatrach. At the time, though, it was thought that Khelil himself could suffer political damage due to the arrest of one of his close confidants, Chief Executive Mohamed Meziane (OGJ Online Jan. 20, 2010).

Contact Eric Watkins at

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