Sonatrach’s Strategy at the Heart of Algeria’s Energy Transition: A System Dynamics Approach

Abstract

Sonatrach, Africa’s leading oil company, is at the heart of Algeria’s energy model. This article highlights the challenges facing the company, a longstanding pillar of the hydrocarbon sector. By comparing Sonatrach’s low-carbon strategy with the national roadmap, the analysis reveals discrepancies between the Algerian government’s climate ambitions and Sonatrach’s strategic choices, which are focused on fossil fuels. Faced with persistent obstacles (excessive subsidies for fossil fuels, institutional monopoly, limited openness to private actors, and an unincentive legal and regulatory framework), Algeria must respond to climate challenges while preserving its economic model. How can this ambivalence be addressed? What role should Sonatrach play in the Algerian government’s national roadmap? To answer these questions, we will return to the need for greater consistency between public policies and industrial strategies. This is where the bulk of the country’s energy transition is at stake.