* Sonatrach seeking more bilateral foreign deals
* Oil price drop has halved Algeria energy earnings
* Sonatrach has had six CEOs in seven years
By Lamine Chikhi
ALGIERS, May 12 The new chief of Algeria's state
energy company Sonatrach has urged employees to simplify
bureaucracy, and focus on the core business of production as the
North African state deals with lower oil prices, an internal
company letter shows.
The message from new CEO Abdelmoumen Ould Kadour was sent to
Sonatrach employees just over a month after he took the job as
the oil giant's sixth chief executive in seven years, a period
marked by instability and a collapse in global crude prices.
It appeared to be another sign of flexibility from Sonatrach
as it looks to increase oil and gas production and work with
foreign partners to open up delayed projects and increase energy
production to offset lower prices.
Algeria has seen its energy revenues halved since the oil
price drop began in mid-2014, forcing the government to cut
budget spending and start small reforms to the vast social
welfare system financed by energy earnings.
"We need to simplify the way we work, review our procedures,
make a qualitative leap and focus our efforts on the core
business of our company namely production, the development of
our activities," Ould Kadour said in the message, a copy of
which was seen by Reuters.
It is not the first time Sonatrach has pushed to streamline
its operations in the last three years, but the new CEO's call
comes as Sonatrach looks to better bilateral relations with
Ould Kadour, an engineer who graduated from the
Massachusetts Institute of Technology and headed U.S.-Algerian
firm Brown & Root Condor in the 1990s, was appointed at the end
of March in a surprise decision to replace Amine Mazouzi.
In recent years Algeria's production stagnated as investors
stayed away, put off by tough contract terms and state
bureaucracy that made the North African country a tough sell for
oil companies despite its potential. Lower oil prices have made
Algeria's offers less competitive for investors.
But oil and gas production has been increasing since last
year. Sonatrach said in 2016 that it would start working with
companies on a bilateral basis for new fields instead of through
bidding rounds as a way to cut through bureaucracy and make
dealings more flexible to help increase production.
Algeria remains dependent on oil and gas earnings, which
provide 60 percent of the state budget, and Sonatrach's
performance is key to the economy. But there is debate within
government circles on how best to work with and attract more
foreign oil investors.
(Writing by Patrick Markey; Editing by Dale Hudson)