Tag Archives: Mali

Northern Mali Threat Continues to Cast Shadow Over Algerian Energy

ImageDespite the apparent success of a French-led military force in ridding Northern Mali from an armed separatist movement, recent violence has suggested that significant challenges remain to both that country and the energy sectors of its neighbors.

As recently as this past weekend, a car bomb and violence were reported in Timbuktu, once again highlighting the uncertainty of the region and the challenges of those in the region in need of a more stable business environment.

As much of North Africa has struggled with wide-ranging political opposition movements, resulting in the collapse of long-standing governments, Algeria has remained unchallenged by protest efforts. Rather, threats to the country’s stability have come from outside, with substantial pressure coming from a stretch of Mali along the country’s southern border. The country has struggled with an armed separatist movement for months, which seized authority from national troops late last year.

This pressure boiled over into Algeria in January with a coordinated raid on a BP gas site, spurring a messy government response and ending with the death of 38 foreign workers. The impact was immediate, with foreign firms suggesting delays to protect their personnel and neighboring Libya promising swift action against any similar events.  

More than just an unfortunate turn of events for a country that relies heavily on energy revenues for just about every aspect of government spending, the event presented a real threat to vital foreign investment needed to strengthen and expand the country’s infrastructure.  Algeria currently boasts access to about 12.2 billion barrels in oil reserves and 159 tcf of natural gas, with the U.S. as one of their largest trading partners.

However, a recent decline in local production and a push to tap into the country’s sizable shale potential have highlighted the role of foreign investment in the country’s immediate energy growth plans. To reach new output goals, Algeria will contribute billions from their own coffers towards boosting downstream capacity, but they will also need to partner with foreign partners who can offer the investment support and technical know-how needed to boost production exploit shale reserves in the near future.

Algeria has promoted substantial shale potential, attracting a number of necessary foreign firms to their shores, each providing the equipment and experience needed for the introduction of shale to the region. Keeping them in place may prove a little more difficult unless Algeria can provide a more stable working environment, making the kind of flare-ups seen this week all the more damaging.  

Originally Posted: Newsbase’s MEA Downstream Monitor

Photo: Mem.algeria.com

Tagged , , , , ,

Mali’s Uncertainty Spurs Concerns Across Central Africa

While not directly connected to Mediterranean affairs, the situation in Mali could have far-reaching effects in North Africa.

Continued uncertainty about the actions of both government and separatist forces in Mali have stoked fears that the country’s recent instability could spread throughout the region and threaten the efforts of several energy actors to get back on track.

Last week saw the Tuareg population’s National Movement for the Liberation of Azawad (NMLA) continue their campaign towards the creation of an independent nation in the north of Mali with public declaration following a series of military victories against scattered government forces.

“We, the people of the Azawad [desert region] proclaim the irrevocable independence of the state of the Azawad starting from this day, Friday 6 April 2012,” the NMLA said in a statement posted on their Web site.

Led by the Tuareg rebel group, the National Movement for the Liberation of Azawad, the uprising is a part of a long-standing conflict between the local population and the central government. However, the campaign has recently experienced resurgence as heavily armed fighters have returned home after fighting alongside the Gadaffi government. Since the fall of the Gadaffi government, a wave of weapons and explosives has made its way to Mali, Niger and Burkina Faso in the hands of fighters once loyal to the Libyan colonel. Further, the Tuareg group is a part of a larger population that is spread across Southern Algeria, Libya and Northern Niger.

The move comes as the country’s new government continues to try to put a positive spin on a military coup led by mid-level officers in an apparent response to what was seen as insufficient support for troops fighting the NMLA. Instead of consolidating support behind the troops, the coup, led by Captain Amadou Sanogo, resulted in panic and disorganization allowing the NMLA to capture more ground. The move also resulted in strict series of sanctions from neighboring countries worried about the spread of instability in the region and recognition of such military action. The sanctions, which included the closure of border and halting of trade, spurred Sanogo to announce that he would ensure a return to constitutional rule with plans to transfer authority to parliamentary leader Diouncounda Traore who would then be given 40 days to organize public elections.

The NMLA’s declaration of independence has raised concerns in the region for a number of reasons, including worries among energy actors in central and West Africa. Late last year, the region included in the declaration had been the focus of a series of agreements to finally initiate an exploration program aimed at studying the territory’s oil potential. The effort had included Algeria’s state-backed Sonatrach announce that they would begin operations in the country’s Taoudeni Basin.

Further, concerns have arisen about the potential for the movement to spread or inspire similar movements across the territory currently occupied by the Tuareg population. While the central African region does not currently host many oil or gas endeavors, continued instability could place further restrictions on existing projects, including the already delays Trans-Saharan Pipeline linking Nigeria with the North African coastline and eventually, Europe. The pipeline was intended to link Nigerian natural gas reserves to North Africa, but worries about possible attacks on the project and theft have put the project on hold until concerns can be dealt with. Despite the potential to link the Africa’s largest natural gas reserves with Europe, the pipeline project has fallen on tough times as the EU economic slowdown has decreased demand and created an insufficient market environment for the proposed $13 billion transmission project.  First proposed in 2009 with a joint agreement between the governments of Nigeria, Niger and Algeria, the pipeline faced obstacles from the very beginning.

The potential for such an uprising to spread or create an unrecognized and unstable territory in central Africa has inspired efforts on the part of the African Union and cautious statements of opposition from the US and Europe in hopes of calming the situation before further violence can occur. On its way to restoring production and output to pre-war levels, Libya is already facing budget and personnel shortfalls and an autonomy movement of its own, making the prospect of further instability a greater threat to the country’s energy sector recovery.

For its part, Algeria has seen the kidnapping of seven diplomats in the town of Gao, according to an Al Jazeera report. Reflecting the chaotic nature of the current situation, the kidnappings themselves were publicly opposed by the NMLA leadership, at the same time that the group’s independence declaration was condemned by Ansar Dine, an Islamic organization also operating against government forces in the region.

The collapse of order in what was viewed as one of West Africa’s most stable countries has raised concerns about the region’s ability to weather the political and economic transitions that have occurred over the last year and a half.

Disputes should not be resolved by arms. It’s a bad sign for other countries which are in the process of consolidating their democracies,” Nadia Nata, political governance officer at the Open Society Initiative for West Africa (OSIWA) told Reuters.

Image: Reuters Alert-Net

Tagged , ,