Algeria: because of bureaucracy, TotalEnergies withdraws from a megaproject

#Algeria : The French major TotalEnergies has withdrawn from a petrochemical megaproject in western Algeria following being engaged for five years, we learned on Monday.

After being engaged for five years, the TotalEnergies group suddenly decided to withdraw from the project to build a petrochemical complex in Arzew, near Oran, revealed on Monday Africa Intelligence. The French media specializing in strategic information on Africa cites three main reasons that motivated the decision of the French major: “the lack of profitability of Arzew, the attraction for the Gulf and the slowness of the government of Algiers” .

After the announcement of a global partnership in 2017, TotalEnergies had signed in May of the following year a accord with the Algerian state company Sonatrach to launch engineering studies for a petrochemical project in Arzew. This project, which represented an investment of around 1.4 billion dollars for the two partners (51% for Sonatrach and 49% for TotalEnergies), included a propane dehydrogenation plant (PDH) and a polypropylene production unit ( PP) with a capacity of 550,000 tons per year.

>>> READ ALSO: Automobile: Will Renault withdraw from Algeria?

But while the project seemed to be on the right track, TotalEnergies announced its withdrawal “during July via a letter” to Sonatrach in which it justified its decision “by highlighting the lack of profitability of the factory,” says Africa Intelligencestressing that the multiple feasibility studies had nevertheless been carried out, the shareholders’ agreement signed, the technical design stopped in “February 2022”, as well as the financing which was “on track”.

This revelation comes a few days before Emmanuel Macron’s visit to Algeria. The French president is indeed expected Thursday, August 25 in the Maghreb country for an official visit. A stay that aims to revive bilateral relations, not looking good, between the two countries.