Algeria and Europe's scramble for gas

Arab Digest - 15/4/2022

Francis Ghilès, Senior Associate Researcher at CIDOB, analyses the changes in the Algerian energy market due to the Ukrainian war and the Covid crisis: “In recent years, Algeria has had an energy policy where the price of electricity, which comes mostly from gas, is one of the lowest in the world, it doesn’t even cover costs. And the powers have been reluctant to change that for fears of social unrest. This has led to an increasing proportion of Algerian gas production going to domestic use. So, that is the difficult fact we all are faced with. And furthermore, until 2019, the laws were very restrictive about foreign investment. That has changed since the end of 2019, of course because of the Covid crisis, so we are now seeing the first major contracts signed with Italy, last November, which is attracting foreign companies back into Algeria. And in recent weeks, of course, there has been a rush of foreign companies to Algeria to look at the possibilities at investing in Algeria in searching for new oil and gas, particularly. So, things are moving, how quickly will they move is difficult to say”.

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