Ramadan is over just in time to segue to summer holidays in North Africa. Even so, there have been noteworthy developments across NARCO’s big buckets. Politics throughout the Maghreb remain disjointed with no common thread. In terms of security, all North African countries still face some kind of Islamic State threat. And oil? Forget global markets, it’s all local in North Africa.
The big question everyone is asking is now that Libyan production has hit the magic 1mbpd, how long can it stay there? A lot of analysts are spitballing, but it’s really a question without an answer. Here’s why. Because there is no overarching strategy that brought production back, there is therefore no corresponding trajectory allowing us to project how long production will remain at these levels. At its root, the problem is not one of production analysis, but more of meta-analysis: if we can’t identify a pattern that explains how we got to where we are, then we can’t develop a pattern to tell us where we’re going.
Someone is gunning for Sonatrach’s CEO and it’s likely not long before he’s gone...
In a surprising move Algeria replaced four powerful ministers in a routine cabinet shuffle. The cabinet shuffle wasn’t supposed to have been a big deal. Algeria had legislative elections on 4 May and portfolios are always reassigned after a new government is formed. But not all portfolios get reapportioned and usually there is some policy continuity. But not this time. And this is why the move is such a surprise. Prime Minister Abdelmalek Sellal, Minister of Foreign Affairs Ramtane Lamamra, Minister of Industry and Mines Abdeslam Bouchouareb, and Minister of Energy Noureddine Boutarfa all got the axe.
In 2013 I published a piece with SciencesPo’s Centre de recherches internationales (CERI) on what I called resource regionalism. At the time, I argued that there was a trend afoot in North Africa “where workers are disrupting the operations of extractive industries and demanding a greater share of the wealth that these industries produce. The governments of North African, Saharan, and Sahelian countries are constrained in their ability to respond to this new phenomenon and as a consequence, it appears that local communities’ willingness to actively struggle for a greater share of extractive industries revenue will be enduring feature of the North African, Saharan, and Sahelian political and economic landscapes.” The events of Tataouine in southern Tunisia in the last several days have borne out this thesis.
With its government disintegrating and its economy beyond repair, Libya is at a crossroads. Ahead lies a slow, painful, collapse or a rapid, painful, collapse. Neither is particularly appealing. But the US has no Libya policy – either to try to help Libya find a third way or to prepare the homeland for the ramifications of a Libyan collapse. One of the reasons the US has no Libya policy is because the US currently has no foreign policy in general. A second reason is that President Donald Trump’s campaign spent so much time vilifying his opponent and tying her to the disaster that Libya has become that just the mention of Libya in the White House is toxic. Lastly, the Trump administration doesn’t have the people to craft a Libya policy.
On global commodities markets, oil is fungible. One barrel is worth the same as another. But where oil comes from, in some places it’s worth more than others. In Libya, oil is worth a whole lot more than whatever a barrel is commanding on some faraway exchange (which as it happens to be these days is not all that much.) In Libya, oil is not just mucky old dinosaur bones. In Libya, a barrel of oil is a whole lot more than the crack spread: it’s not just feedstock for gasoline, diesel, lubes, and naphtha. In Libya, oil is power. Oil is leverage. In Libya, where everyone has weapons, oil is the biggest weapon of them all.
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This month, North Africa Risk Consulting introduces a new format* for the monthly NARCO RoundUp. The new NARCO RoundUp now features three analytic pieces on the top developments in North African Politics, Security and Oil. In addition, the new NARCO RoundUp also includes forecasts that give North Africa Risk Consulting’s clients a sense of what’s next. This month we look at the GNA's closing act, the state of competition between al-Qaeda and the Islamic State in North Africa, and the latest shakeup in the Algerian energy sector.
North Africa Risk Consulting's president, Geoff D. Porter, was invited to testify in front of the U.S. House of Represenatives Homeland Security Committee, Subcommittee on Counterterrorism and Intelligence regarding "Terrorism in North Africa: An Examination of the Threat." Per the subcommittee's own introduction "the United States continues to face a dynamic threat from al-Qaeda and ISIS affiliates across the globe. This threat will only grow as ISIS loses territory in Iraq and Syria, and al-Qaeda fights to reclaim its status as the leader of the global Jihadi movement. In this context, North Africa has emerged as an important theatre in the war on terror."
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