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Geopolitical Uncertainty Shakes Oil Markets

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Via Oilprice.com

Saudi Arabia

Politics, Geopolitics & Conflict

– Following the arrest of five Algerian billionaires and members of the political elite close to former president Bouteflika, investor fears are becoming a reality. The one piece of assurance is that the military has long been one of the beneficiary of Sonatrach revenues and measures will be taken to ensure that the oil giant is protected. After firing the CEO of the state-run oil giant Sonatrach and replacing him with the company’s head of production and exploration, the Algerian government is doing its best to assure investors that it’s business as usual and that deals are safe – along with production and development. While there is still no word on whether Chevron will go through with its planned talks with Sonatrach over Algeria’s shale patch (after Exxon bowed out), Sonatrach announced late this week that its new CEO, Rachid Hachichi, signed an MOU with Italy Eni’s CEO on the renewal of a gas supply contract through a Mediterranean pipeline. That move was meant as a message to other investors and potential investors that deals will move forward under the new leadership. In the meantime, keep a close eye on the emerging elite clan warfare in Algeria. Algeria has two influential clans – one representing the presidency and one representing the military – and the billionaires that have fallen were from the presidential clan.

– There have been no significant changes on the Libyan front to impact oil flow…

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