Soon after he was named Algeria's energy minister in 1999, Chakib Khelil walked into the cafeteria at Sonatrach, the government-owned oil company, and asked who handled the catering services. He found that one business won the contract each year without any competition.
``I ordered a public tender and the same company won,'' Khelil said last month as he sank into a leather couch in his office overlooking the bay of Algiers. ``But it was forced to cut its prices in half. In two years, we've saved $600 million through tenders for purchases, like turbines or plane tickets.''
The 64-year-old minister, who has a Ph.D. in petroleum engineering from Texas A&M University, has also been leasing his country's oil fields, accelerating a policy initiated in the 1990s to open up Algeria's oil sector to foreign investors. Like Qatar, Iran and Libya, Algeria is encouraging companies to boost production after past nationalizations. Africa's second-largest country aims to double oil output and increase gas exports by 40 percent before the end of this decade, Khelil says.
``There's definitely a before and an after Khelil,'' says Bernard Sudreau, who heads Algerian operations for Total SA, Europe's third-largest oil company. ``More exploration blocks have been signed in the past two years than during the entire last decade. And there's still substantial potential there.''
PIN/BLOOMBERG
News ID 9566
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