Algeria - Profile - Youcef Yousfi.

The Energy and Mines Minister since June 25, 1997, Yousfi is a key technocrat close to President Zeroual and is a member of the ruling National Democratic Rally (RND). Until June 25, 1997, Yousfi used to be head of the Zeroual's Presidential Office. Previously he headed Sonatrach. As minister of energy and mines, Yousfi replaced Amar Makhloufi who had been in this post since April 1994 and who had been at the forefront of changes in the Algerian hydrocarbon sector. Makhloufi had replaced Ahmed Benbitour, who became finance minister and held that post until September 1996. Now the finance minister is Abdelkrim Harchaoui. Yousfi built up his career in Sonatrach, becoming its vice president under CEO Khellef in the early 1980s and subsequently its president. Then he moved on to head one of the financial institutions. In the more recent years he acted as advisor to Qatar's Minister of Energy and Industry, Abdullah Bin Hamad Al Attiyah, assisting the latter in the marketing of LNG and in matters related to oil and gas. In 1996 Yousfi was brought back to Algeria to become head of President Zeroual's office and, later, a member of RND which the ruler helped found as a government party. At the presidential office he became Zeroual's top advisor on energy matters and on OPEC affairs. Yousfi and fellow energy experts allied to Zeroual in early 1997 were behind the creation of the National Council of Energy (CNE) under the president's chairmanship. Now Yousfi is a key member of CNE. In June 1997 President Zeroual successfully negotiated a national coalition government with the former ruling party, the National Liberation Front (FLN), and the moderate Islamic Movement for a Peaceful Society (MPS) of Shaikh Mahfoud Nahnah. Yousfi was given the key energy and mines portfolio. That government was formed by Ahmed Ouyahia, who was retained from the previous cabinet as prime minister. The new government had seven ministers from each of FLN and MPS and the dominant share - 28 ministers and state secretaries - was kept for the ruling RND. Ouyahia resigned in December 1998 and was replaced as prime minister by Ismail Hamdani, a member of parliament and former ambassador to France, Spain and Sweden (see Gas Market Trends). Hamdani formed a new government on Dec. 19, 1998, but only three ministers and nine secretaries of state were replaced. Yousfi was retained as energy and mines minister. Yousfi effected important changes in Sonatrach in July 1997 as he made Abdelmajid Attar its president to replace Nazim Zouioueche. Zouioueche was not on good terms with Yousfi and several Sonatrach executives. Attar was close to the minister and, a very nice man, was judged more effective in speeding up the restructuring of Sonatrach (see next profile). Like his predecessor Makhloufi, however, Yousfi is against the idea of privatising Sonatrach. In late 1994 and early 1995, for example, Makhloufi had responded to criticism from trade unions by reassuring them that privatisation of Sonatrach was not debatable. As soon as he became energy minister, Yousfi stressed that state control did not mean Sonatrach could be inefficient or function without accountability to the government. He said the private sector should become involved in joint ventures with Sonatrach subsidiaries in the upstream and downstream branches of the hydrocarbon industry. Sonatrach used to operate somewhat as a "state within a state" - and still does to some extent. But Yousfi's and Attar's efforts at reorganisation have made it a less centralised and more efficient entity with greater accountability to the government. During OPEC's ministerial conference in Vienna in November 1998, Yousfi was elected as its president - with his former boss, Qatar's Energy Minister Attiyah, elected as alternate president. (His predecessor Makhloufi was elected OPEC's president in 1996). As such, Yousfi became involved in efforts to get OPEC to lower oil production in order to help restore prices. By then crude oil prices had fallen to very low levels. Behind Riyadh Pact & OPEC Price Defence Efforts: With long experience in OPEC affairs, Yousfi had been strongly opposed to Saudi Arabia's market share policy since the Jakarta ministerial conference in November 1997. At that conference, Saudi Oil Minister Ali Al Naimi got most OPEC minister to agree to a 2m b/d rise in the organisation's oil production ceiling. That immediately caused a fall in crude oil prices, in view of a worsening economic crisis in Asia. Prices fell to lower levels in the following months as the winter in the Northern Hemisphere was exceptionally mild and non-OPEC supply continued to rise. It was thanks to Yousfi's efforts in the subsequent months that the oil ministers of Mexico and Venezuela agreed to a collective price defence move by OPEC and IPEC states. Yousfi's efforts led to a meeting in Riyadh and a tripartite pact between the oil ministers of Mexico, Saudi Arabia and Venezuela. The pact called for a cut in OPEC and IPEC production. With Yousfi continuing to lobby behind the scenes, the Riyadh pact was adopted by OPEC's ministerial conference in Vienna in June 1998, which was attended by ministers of some IPEC states. However, Yousfi was not satisfied with the scale of OPEC's production cut and called for further reductions. In late 1998 he called for an emergency OPEC meeting and said crude oil prices would only be restored to the 1997 average if the organisation cut output by another 1.5m b/d. His view was backed by Iran, Libya, Kuwait, Qatar, and the UAE. Some non-OPEC states, including Oman, pledged to cut their production further if OPEC came down by 1.5m b/d in addition to the 2.6m b/d already pledged. Saudi Arabia was yet to be convinced, as the other members did not comply with their new quota commitments. The Saudi oil minister said Riyadh's market shares remained a priority until it saw full compliance by all the other OPEC members. On Dec. 10, 1998, Algeria's then premier Ouyahia charged that oil prices were low mainly because of "the selfishness of certain OPEC members", not only because of the weather and the Asian crisis. Although he did not mention names, he had the quota violators and Saudi Arabia in mind. Algeria's oil production capacity now is over 1m b/d, excluding condensates, and should reach 1.4m b/d or more in 2000. Its current output commitment to OPEC is 788,000 b/d, compared to a pre-June 1998 quota of a little less than 900,000 b/d. Yousfi has insisted that Algeria's actual production is less than 800,000 b/d. Kuwaiti Oil Minister Shaikh Saud Al Nasser Al Sabah strongly backed the Yousfi position, calling for an emergency OPEC meeting in February 1999 - ahead of the next conference scheduled for March 23. But on Feb. 1 Shaikh Saud said: "Some oil exporting states have taken a clear position against non-compliance of production cuts by deciding not to attend any future OPEC meeting until it has been confirmed that all the members have fully complied with the cuts". The Kuwaiti minister added: "If there is going to be an OPEC meeting, it will not take place unless its aim is further (output) reduction". He also said: "The danger from the decline in oil prices is a real one, also for us, which has recently prompted the (US) Senate to discuss the consequences for major (US) oil companies". Yousfi, a strong advocate of Sonatrach's opening to foreign oil companies in the upstream and downstream sectors, used his wide contacts among foreign companies in 1998 to help in Sonatrach's road-show presentations in the US, Europe and other parts of the world (see DT 5, 6 & 7). In May 1997, he led a big Algerian delegation to Australia, where he discussed BHP's radical compact LNG technology. His team included senior Sonatrach executives, who are now negotiating with BHP on the use of this technology for a 500,000 t/y expansion in one of the LNG plants at Arzew.