Many foreign oil businesses have left Tunisia, and more are planning to do so. As a result of the accumulation of numerous issues, the oil industry is suffering.
Hamed El-Matri, an engineer with expertise in hydrocarbon exploration and production, former advisor to the energy minister in charge of the hydrocarbon file, and member of the TANS Executive Committee, discussed the state of the oil sector in Tunisia and the factors that led to oil companies leaving the nation in an interview with the Tunis Africa News Agency.
News Agency for Tunisia: Despite the arrival of several oil fields into production, many foreign oil corporations are getting ready to leave Tunisia.
Hassan El-Materi Sadly, what I said is true, and the issue is not the result of yesterday. Many large and medium-sized businesses have abandoned Tunisia during the past few years in favor of smaller businesses, and this regrettable tendency has recently contributed to the sector’s already wide range of challenges.
The only two businesses, “ANI” and “Shell,” that are active in Tunisia are looking for purchasers for their shares, therefore I am not concealing anything. Since it appears that small businesses have run out of patience and hope and are considering leaving as well, OMV has launched a program to abandon its investments, sell its stakes in joint ventures, and restrict its activities to the area around Nawara.
Press agency for Tunisia, Africa: What, in your opinion, are the causes of this disappointment?
Hamed El-Matri: In my opinion, there are three main causes for the disappointment of oil companies. The first is financial difficulties brought on by the recent decline in oil prices in exchange for Tunisia’s relatively high operating costs. The second is frequent delays in payments from the Tunisian side being accepted (the same is true for commitments with the Tunisian company of petroleum activities and the Tunisian company of electricity and gas).
In addition, there is a lack of a strategic vision for the sector and challenges in interacting with the national authorities. These issues have been made worse by political instability, the appointment of ten new energy ministers since 2011, the creation of the Ministry of Energy twice, and its subsequent dissolution and reinstatement.
Thirdly, in exchange for the state’s inability to impose law and order, social and security issues have emerged as threats to the security of oil supplies, activities, and regularization of employee positions, in addition to increasing and frequent strikes, intentional road closures, and social unrest. Moreover, the Camor sit-in is only one in a string of such incidents.
It is normal for businesses to worry about their interests and choose to make investments elsewhere in comparable situations, which is terrible.
In summary, investors in the oil business have encountered a wide range of challenges (social and political issues, “land management,” strikes, roadblocks, disagreements over contracts, political pressures, and influences), which is the ideal setting for an attractive project to fail miserably.
It seems sensible that no one would make an investment if they were unsure they could earn the required income.
Let me tell you that the situation has become so impossible that four out of the last five earthquake campaigns (the first stage of the oil exploration process) have been abandoned (with dry pieces costing millions of dollars each) due to force majeure. As patriotic Tunisians, we always try to rectify the situation by promoting a completely different image of the situation the country is going through and being less worried about it (related to social problems, obstructions, strikes, and access to the land)
Due to pressing circumstances, even the Tunisian oil company had to give up on carrying out the seismic survey associated with the “El Chaal” area permission. It seems to reason that there won’t be any more discoveries or production if we are unable to investigate.
(Watt): Exist any fresh hydrocarbon sector exploring projects?
Hamed El-Materi: Although it is positive, the recent introduction into production of several fields in Tunisia, represented by Halk Al Manzil (Naft, Hammamet Bay) and Nawara (Gas, South Tunisia), illustrates the sector’s distress.
The political bidding and legal dispute over the ownership of the house during the preceding period delayed the use of the privilege for two years and caused the investor to suffer significant losses. For roughly 8 years, the Nawara field concession was halted.
(Watt): Do you believe that the institutions’ exit signifies the beginning of Tunisia’s oil exploration industry’s demise? Is it a result of resource depletion or the state’s inability to continue its exploratory efforts?
Hamed El-Materi: Some individuals believed that the experts’ predictions of the “death” of the industry were overstated. The “beginning of the end” is currently a genuine danger, nevertheless. Despite the fact that the oil fields are using up their stocks, this condition is not related to the country’s resources being depleted; rather, the forms are tied to the replenishment of this stock.
Tunisia does not lack resources; rather, it needs to look for and explore them in advance. It has a lot of promise in the southern region, the Gulf of Gabes, and the northern coast. Personally, I am certain that we can address the energy shortage and halt the downward trend in the upcoming years. Sadly, we are not connected to it, thus this calls for accelerating research once again and creating the ideal environment to entice investors to explore.
(Watt): Why do you think Tunisia’s successive governments have been unable to win back the trust of the oil industry and assure its survival? Given that natural resource exploitation contracts (Article 13 of the Constitution) are referred to the appropriate parliamentary committee and that agreement in this respect are submitted to the House of Representatives for approval, is this the result of legal considerations?
Hamed Al-Materi: In actuality, the industry is plagued by issues that predate the revolution and go outside the purview of Article 13 of the new constitution. The evidence is unambiguous, and the slowdown in exploration or production operations is the result of factors outside of their control.
The sector is having significant problems with governance. It is evident.