April 24, 2024

North Africa’s Prospects as Energy Goliath Are Fading

LONDON — A deadly attack by militants on an Algerian natural gas plant last month has dealt a major setback to a group of North African countries whose prospects as oil and gas producers were already cloudy.

A few years ago, Algeria, Libya and Egypt looked like they would provide much of the solution to Europe’s declining natural gas production and its uneasy reliance on Russia for supplies of a fuel widely used in industry, power generation and home heating.

But well before the early morning assault by dozens of raiders on the In Amenas gas facility, deep in the Sahara, the difficult political realities of the region were creating doubts about how big a role North Africa could play in the world energy equation.

Both oil and natural gas production have been in decline in Algeria, the region’s biggest gas producer, since the mid-2000s. In Libya, the rebellion that ousted Col. Muammar el-Qaddafi, and its chaotic aftermath, have disrupted oil and gas exploration. In Egypt, rising domestic consumption, encouraged by government policies, has cut into exports.

“For the rest of this decade there has to be a big question of how far Europe can rely on North African gas,” said Jonathan P. Stern, chairman of the gas program at the Oxford Institute for Energy Studies, a research concern. “It certainly can’t rely on an expansion of North African gas supplies. Most likely there will be a contraction.”

During the militants’ attack on In Amenas, and the Algerian military’s action to retake the facility, 40 workers and 29 insurgents were killed. The plant — jointly owned by BP, Statoil of Norway, and Sonatrach, the Algerian national energy company — has yet to reopen. Its gas field and processing center accounted for about 10 percent of Algerian production, but so far the shutdown has had little impact on exports.

“Algeria still has the ability to swing production for short periods,” said Femi Oso, an analyst at Wood Mackenzie, an energy consulting firm in Edinburgh.

Algeria reinjects a substantial portion of its gas back into its oil and gas fields to maintain pressure. Mr. Oso said that Sonatrach is now diverting some of this gas into exports, but this is only a short-term fix.

Sonatrach is pressing to repair and reopen the plant, which suffered blast damage.

But if much of the plant remains closed for long, or if there is another attack on Algeria’s energy production infrastructure, exports will suffer, analysts say, forcing up prices in Europe. Most of the Algerian and Libyan gas exported to Europe flows under the Mediterranean through a handful of giant pipelines. While the undersea portion of these arteries seems secure, the pipelines cover long stretches of desert before they reach the sea. Some pass through troubled countries like Tunisia, where they could be hit.

“What we find in troubled geopolitical hotspots is that gas infrastructure and pipelines are the most vulnerable targets,” said Rob West, an analyst at Bernstein Research in London. “Pipelines are very hard to protect.”

He noted that in Yemen, Iraq and other countries, anti-government forces had succeeded in cutting pipelines on numerous occasions, disrupting oil and gas supplies.

The worry for Algeria and other North African countries is that the attack on In Amenas, coming after two years of political instability, will further discourage the foreign investment the countries need to maintain their positions as oil and gas exporters.

Western energy companies were already turning up their noses at Algeria’s tough contract terms, which give the government more than 90 percent of the proceeds from oil and natural gas production and require that Sonatrach get a majority stake in all projects. The country also has high costs and lengthy regulatory procedures.

In Algeria’s most recent auction of oil and gas leases, in 2011, only 2 of 10 exploration blocks found takers — and one of those went to Sonatrach.

“The fiscal terms are so tough that international oil companies don’t think they will be able to make any money,” said Mr. Oso, the Wood Mackenzie analyst.

Article source: http://www.nytimes.com/2013/02/23/business/global/23iht-natgas23.html?partner=rss&emc=rss

After Disclosures by WikiLeaks, Al Jazeera Replaces Its Top News Director

Al Jazeera is under intense scrutiny in the Middle East over its varying coverage of the Arab Spring revolts. Although the network is nominally independent — and its degree of autonomy was itself a revolution in the context of the region’s state-controlled news media when it began in 1996 — many people contend that its coverage of the region still reflects the views of its Qatari owners.

Al Jazeera played an early and influential role in covering — some would say encouraging — the unrest in Tunisia and Egypt last winter. It was even more aggressive in its focus on the regime of Col. Muammar el-Qaddafi and the struggles of what it called “freedom fighters” in Libya, where Qatar came to play a major role in supporting the rebellion.

But some people now cite what they see as a double standard in the network’s sensational coverage of the unrest in Syria on the one hand, and its relatively negligible coverage of the strife in Bahrain, Qatar’s Persian Gulf neighbor.

United States diplomatic cables disclosed recently by WikiLeaks appear to open a new window into the network’s interactions with Qatar and other governments.

A cable sent by the American ambassador, Chase Untermeyer, and dated October 2005, describes an embassy official’s meeting with Al Jazeera’s news director, Wadah Khanfar. According to the cable, the official handed Mr. Khanfar copies of critical reports by the United States Defense Intelligence Agency on three months of Al Jazeera’s coverage of the Iraq war; Mr. Khanfar said that the Qatari Foreign Ministry had already provided him with two months of the American reports, according to the cable, suggesting a close three-way consultation involving the two governments and the network.

He also urged American officials to keep his behind-the-scenes collaboration a secret.

He objected to an intelligence report’s written reference to an “agreement” between the United States and Al Jazeera.

“The agreement was that it was a non-paper,” Mr. Khanfar said, according to the cable. “As a news organization, we cannot sign agreements of this nature, and to have it here like this in writing is of concern to us.”

Senior United States officials often charged publicly during the Iraq war that Al Jazeera’s coverage inflamed anti-American sentiment, but in the cable Mr. Khanfar appeared eager to convince the American official that Al Jazeera was trying to be fair. He said he was preparing a written response to the points raised in the intelligence reports, according to the cable.

In at least one instance, involving a report on the network’s Web site, Mr. Khanfar said in the cable that he had changed coverage at the American official’s request. He said he had removed two images depicting wounded children in a hospital and a woman with a badly wounded face.

When the official raised other complaints, Mr. Khanfar “appeared to repress a Sigh,” according to the cable, “but said he would have the piece removed.”

“Not immediately,” he reportedly said, “because that would be talked about, but over two or three days.”

Mr. Khanfar, a former correspondent in Iraq and elsewhere for Al Jazeera, had been director for eight years before he resigned on Tuesday. He offered no explanation for his departure, but said on his Twitter account, “Entertained by all the rumors of why I have resigned.” His successor is Sheik Ahmad bin Jasem bin Muhammad Al-Thani, a businessman and member of the royal family.

Article source: http://feeds.nytimes.com/click.phdo?i=7552f9fa4aae7f48f5a9fe5d4b528124

Letters: Seeing Productivity as a Volatile Number

Opinion »

The Thread: Obama’s Non-Doctrine Doctrine

Qaddafi is out. Is a new American foreign policy in?

Article source: http://feeds.nytimes.com/click.phdo?i=fb447995132a283f8052ef749966c2e5

Obama, at Summit, Seeks Financial Support for Egypt and Tunisia

These crosscutting pressures show the complexity of the Arab upheaval and the responses it is drawing from major powers. While the United States is stressing the need to stabilize the economy of Egypt, its major Arab ally, France and Britain are eager to intensify the NATO air strikes on Libya’s leader, Col. Muammar el-Qaddafi.

These goals are not mutually exclusive, American and European officials said. The United States said it expected the Group of Eight countries – France and Britain, among them – to express strong support for efforts to generate jobs and revive growth in Arab countries.

“Chancellor Merkel, President Sarkozy, a number of leaders, have all stressed the importance of using these meetings to show a unified front in providing support for Egypt and Tunisia,” said Benjamin J. Rhodes, the president’s deputy national security advisor.

Libya and the Arab world dominated the meeting of world leaders in this fashionable seaside resort in Normandy. President Nicolas Sarkozy, the host, is still pushing for the United States to deploy A-10 attack aircraft and AC-130 gunships in Libya, said a French official, though he said Mr. Sarkozy was making his pitch privately.

At a news conference here, the French president reiterated his call for Colonel Qaddafi to relinquish power. “We’re not saying he should go into exile,” he said. But he “cannot stay in power.”

Mr. Obama, who has rejected calls for more combat aircraft, is trying to keep the focus on economic stability and jobs in Egypt and Tunisia. At the same time, he is relying on European governments and international financial institutions to supply much of the capital.

Prime Minister David Cameron told Mr. Obama on Wednesday that Britain would support the effort, and it will pledge $178 million. American officials said they have gotten encouraging signs from Germany and France, even if neither has made a concrete pledge.

The International Monetary Fund, which has had a team in Egypt for the last week, is readying a package worth $4 billion to $5 billion to help it bridge a financing gap, a fund official said. Egyptian officials said their economy, damaged by unrest that halted trade and tourism, will need an infusion of $12 billion just this year to steady itself.

Last week, Mr. Obama announced $1 billion of debt relief and $1 billion in loan guarantees for Egypt. The European Union plans to increase its aid by $1.75 billion.

The United States and Europe have played down expectations of a big dollar total, saying this is not a pledging conference. That partly reflects the bitter experience of past summits, where tens of billions of dollars were pledged to alleviate poverty and many countries dragged their feet in delivering on their promises.

It also reflects the fact that the most cash-rich countries – as well as the ones with the most incentive to support stable Arab countries – are their neighbors in the Persian Gulf. The Obama administration is focusing much of its efforts on persuading Saudi Arabia and other gulf countries to make pledges to Egypt and Tunisia, officials said.

The Group of Eight is also expected to take a harsh stand against Syria’s crackdown on pro-democracy protesters, officials said. That may require some arm-twisting, however, since Russia has opposed efforts to impose United Nations sanctions on the Syrian government.

Conceding those differences, Mr. Rhodes said, “We want to have a strong and unified voice that we’re speaking with our allies and all who share concerns for the rights of the Syrian people.”

The Libyan campaign was high on the agenda when Mr. Obama met for 90 minutes with Russia’s president, Dmitri Medvedev. But the two men also discussed Russia’s bid to enter the World Trade Organization and efforts to settle disagreements over the deployment of an American missile-defense system in Eastern Europe.

Russia is less bitterly opposed to missile defense than it was a year ago, an American official said. But he said the Russians remain suspicious that the most advanced version of the system – not scheduled to be deployed until 2020 – would threaten their nuclear defenses.

“They have a perception that when we get to that phase, that there may be some capability to threaten what we call strategic stability,” said Michael McFaul, senior director for Russia at the National Security Council. “We have no intention of doing that.”

Mr. Medvedev and Mr. Obama appeared stern-faced after their session, but American officials insisted it went well. Their expressions, one said, reflected only the stuffiness of the room.

Despite much anticipation, the leadership void at the International Monetary Fund did not figure much in hallway chatter. The French government is promoting its finance minister, Christine Lagarde, as a candidate to succeed Dominique Strauss-Kahn, who has been charged with the sexual assault of a hotel maid in New York.

The Obama administration remains noncommittal on her candidacy, saying only it wants the most qualified person. But a French official said he was confident that Ms. Lagarde, who did not attend the meeting, had amassed enough support to win the managing director post.

Liz Alderman contributed reporting

Article source: http://www.nytimes.com/2011/05/27/world/europe/27prexy.html?partner=rss&emc=rss