Back in September 2017 NARCO put out some analysis about Libya managing beyond all expectations to maintain production at that magic 1mpbd threshold. The September note was a follow up to an earlier note from July 2017 when Libya hit 1mbpd for the first time in three years. The following is Part Three of that discussion.
It’s a new year, but some things just still remain the same. In fact, in some cases they are getting worse – Tunisia is lurching toward economic austerity and political authoritarianism; Libya’s political process is a shambles even as oil production inexplicably stabilizes at around 1.1mbpd. Algeria’s hanging on and is even starting to make some changes for the better. At least in the energy sector. Politics, not so much.
Sorry, folks, no teaser on this one...
As 2017 winds down and 2018 gears up, NARCO takes a look back at what happened in Algeria, Libya, and Morocco last year and what’s likely to happen next year. Not surprisingly, there were no dramatic changes in trajectory in any of the three countries – with each pursuing foreseeable paths. Next year, though, “a change is gonna come,” and we could see meaningful developments in politics in Algeria and Libya, and hydrocarbons in Morocco.
ExxonMobil signed an exploration deal this week for three offshore blocks. Although the terms are not yet public, Nouakchott is murmuring that XOM paid a US$70 million signing bonus. That’s big. Especially for a country with a 2016 GDP of US$4.6 billion. But the Exxon deal isn’t the only thing happening in Mauritania these days. Extractive industries in general are booming and Nouakchott is bouncing.
So here we are again. Algeria says it wants to – no, it says it has to – exploit its enormous shale gas potential. Sure. This feels very much “been-there-done-that.” But this time’s different. No, really. It is. And here’s why...
Summer is over, the Eid and beaches behind us, but North Africa seems to be stuck in a rut. If there’s one theme that ties the September RoundUp together it’s repetition: Algeria has a new old prime minister. Libya is talking about talking again. Mauritania’s president is laying the foundation for a third term. And the Islamic State is making a limited comeback.
Back in July NARCO put out some analysis about Libya having reached that magic 1mpbd production milestone. The thrust of NARCO’s analysis was that Libya – largely through the singlehanded, Herculean efforts of NOC Chairman Mustafa Sanalla – had managed to cobble together a meaningful level of production after years of lost potential. But NARCO had serious reservations about how stable that production was.
Prime Minister Abdelmajid Tebboune is out and Ahmed Ouyahia is back (for the fourth time.) Tebboune was too destabilizing, and if there's anything that President Abdelaziz Bouteflika does not like it's instability. Ouyahia is a known entity. He's a sure thing. And he gets things done discretely that would otherwise be unpopular. This has implications for workaday Algerians and for the energy sector alike.
In his first speech to parliament after being appointed Prime Minister, Abdelmajid Tebboune lashed out at those who mix money and power, saying “the state is the state and money is money.” There was no question in anyone’s mind that he was referring to Ali Haddad, one of Algeria’s richest men, the president of the Forum des Chefs d’entreprise, and a close associate of President Abdelaziz Bouteflika’s younger brother Said. Since the prime minister’s comments back in June, the slugfest between Tebboune and Haddad hasn’t let up. Blood’s spattered the mat, but still no knockout blow.
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