Algerian government seeks to salvage energy trade after attack

In Amenas siege may have far-reaching repercussions for a gas-reliant economy

Until a few days ago, workers at the In Amenas gas plant in the Algerian Sahara lived a simple, if confined life. Working 12-hour shifts and seven-day weeks offered little opportunity for leisure.

But when there was down time, they had at their disposal state-of-the art training and sports facilities, including a football pitch, swimming pool and fitness rooms.

“There’s a lot of friendly rivalry there,” says Gerry Peereboom, head of BP operations in Algeria from 2005-09. “The Brits play the Norwegians at soccer, and the expats play the Algerians.”

Until the plant came under attack last week, there was little reason to believe that the safety of workers at In Amenas was at serious risk. Algerian authorities said at least 37 hostages were killed in the siege. Last night, Norwegian energy company Statoil ASA confirmed that two Norwegian employees missing since the attack are dead.

In the 55-year history of Algeria’s oil and gas industry there had never been a major attack on an oil or gas facility, despite a decade-long civil war in the 1990s that claimed an estimated 200,000 lives.

Security at the plant is extremely tight. Whenever workers leave the compound to travel to the nearby airport or to work on the gas fields, they are escorted by Algerian security forces. The compound is protected by a perimeter fence, a second inner fence and armed patrols.

The site itself offers natural protection from outside intrusion. Two sides of the facility are protected by a cliff drop that it would be difficult to scale unobserved. On the other two sides there is a clear view all the way to the horizon.

How such comprehensive security could be breached remains a mystery. But the fact that it was breached is a huge blow for a government that derives much of its legitimacy from its success in combating Islamic terrorism, and takes great pride in the experience of its security services.

The shutdown of the In Amenas plant has economic repercussions too. The facility accounts for about 10 per cent of Algeria’s gas output and more than 15 per cent of its exports. The gas produced from the field is worth between $5m and $10m (£3m and £6m) a day. Algeria’s Energy Minister, Youcef Yousfi, said on Sunday that the plant could resume production “in the next few days”, but BP and Statoil are more cautious. “The site is still part of the crime scene – it will take a while,” said Sheila Williams, a spokeswoman for BP in London.

The Government has insisted that the loss of output from In Amenas can be covered, while Spain and Italy have reported that gas deliveries from Algeria are above average for the month to date.

But the reputational impact on Algeria of the security breach at In Amenas could be much more damaging. Algeria’s hydrocarbons sector accounts for about two-thirds of the country’s economy and 97 per cent of its export income. A lack of exploration and rapid growth in local energy demand in recent years has put the government under huge pressure to accelerate its exploration and development programme.

Statoil and BP both say that they intend to maintain their business in Algeria. But both have underlined the need for new security guarantees. A statement released by BP on 22  January insisted that the company “remains committed to operating in Algeria”. But the company has evacuated all of its staff from the country, including those based in Algiers. “When they return will be decided at a later date,” said Ms Williams. “They have been through an extremely hard time.”

Whether the appetite of other companies to invest in Algeria, or to continue existing operations there, will be affected remains to be seen. On Monday, Algeria’s parliament passed a series of amendments to the country’s oil and gas licensing regime for foreign companies operating in the country. The terms are appealing, say analysts. At the moment, though, security concerns will come first.

Sport
Radamel Falcao
footballManchester United agree loan deal for Monaco striker Falcao
Voices
A man shoots at targets depicting a portrait of Russian President Vladimir Putin, in a shooting range in the center of the western Ukrainian city of Lviv
voicesIt's cowardice to pretend this is anything other than an invasion
Arts and Entertainment
The eyes have it: Kate Bush
music
Sport
Louis van Gaal, Radamel Falcao, Arturo Vidal, Mats Hummels and Javier Hernandez
footballFalcao, Hernandez, Welbeck and every deal live as it happens
PROMOTED VIDEO
Have you tried new the Independent Digital Edition apps?
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Arts and Entertainment
booksNovelist takes aim at Orwell's rules for writing plain English
Arts and Entertainment
Al Pacino in ‘The Humbling’, as an ageing actor
filmHam among the brilliance as actor premieres two films at festival
News
Fifi Trixibelle Geldof with her mother, Paula Yates, in 1985
people
Arts and Entertainment
Downton Abbey fans rejoice, series five returns later this month
TV
Arts and Entertainment
booksExclusive extract from Howard Jacobson’s acclaimed new novel
News
i100
Independent
Travel Shop
the manor
Up to 70% off luxury travel
on city breaks Find out more
santorini
Up to 70% off luxury travel
on chic beach resorts Find out more
sardina foodie
Up to 70% off luxury travel
on country retreats Find out more
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs General

Y4 Teacher - Leicester

£90 - £120 per day: Randstad Education Leicester: We are currently recruiting ...

VMware Infrastructure Engineer - (VCP, VMware) - £45k, London

£45000 per annum: Ashdown Group: Infrastructure Engineer, VMware (VCP, NetApp,...

Business Development Manager

Salary/Rate: £32,000/annum: M&E Global Resources Ltd: Description/Main Duties ...

IT Systems Manager

£40000 - £45000 per annum + pension, healthcare,25 days: Ashdown Group: An est...

Day In a Page

Alexander Fury: The designer names to look for at fashion week this season

The big names to look for this fashion week

This week, designers begin to show their spring 2015 collections in New York
Will Self: 'I like Orwell's writing as much as the next talented mediocrity'

'I like Orwell's writing as much as the next talented mediocrity'

Will Self takes aim at Orwell's rules for writing plain English
Meet Afghanistan's middle-class paint-ballers

Meet Afghanistan's middle-class paint-ballers

Toy guns proving a popular diversion in a country flooded with the real thing
Al Pacino wows Venice

Al Pacino wows Venice

Ham among the brilliance as actor premieres two films at festival
Neil Lawson Baker interview: ‘I’ve gained so much from art. It’s only right to give something back’.

Neil Lawson Baker interview

‘I’ve gained so much from art. It’s only right to give something back’.
The other Mugabe who is lining up for the Zimbabwean presidency

The other Mugabe who is lining up for the Zimbabwean presidency

Wife of President Robert Mugabe appears to have her sights set on succeeding her husband
The model of a gadget launch: Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed

The model for a gadget launch

Cultivate an atmosphere of mystery and excitement to sell stuff people didn't realise they needed
Alice Roberts: She's done pretty well, for a boffin without a beard

She's done pretty well, for a boffin without a beard

Alice Roberts talks about her new book on evolution - and why her early TV work drew flak from (mostly male) colleagues
Get well soon, Joan Rivers - an inspiration, whether she likes it or not

Get well soon, Joan Rivers

She is awful. But she's also wonderful, not in spite of but because of the fact she's forever saying appalling things, argues Ellen E Jones
Doctor Who Into the Dalek review: A classic sci-fi adventure with all the spectacle of a blockbuster

A fresh take on an old foe

Doctor Who Into the Dalek more than compensated for last week's nonsensical offering
Fashion walks away from the celebrity runway show

Fashion walks away from the celebrity runway show

As the collections start, fashion editor Alexander Fury finds video and the internet are proving more attractive
Meet the stars of TV's Wolf Hall... and it's not the cast of the Tudor trilogy

Meet the stars of TV's Wolf Hall...

... and it's not the cast of the Tudor trilogy
Weekend at the Asylum: Europe's biggest steampunk convention heads to Lincoln

Europe's biggest steampunk convention

Jake Wallis Simons discovers how Victorian ray guns and the martial art of biscuit dunking are precisely what the 21st century needs
Don't swallow the tripe – a user's guide to weasel words

Don't swallow the tripe – a user's guide to weasel words

Lying is dangerous and unnecessary. A new book explains the strategies needed to avoid it. John Rentoul on the art of 'uncommunication'
Daddy, who was Richard Attenborough? Was the beloved thespian the last of the cross-generation stars?

Daddy, who was Richard Attenborough?

The atomisation of culture means that few of those we regard as stars are universally loved any more, says DJ Taylor