SONATRACH FABRICATES A CLAIM AGAINST PETROCLETIC TO COVER UP ILL PLANNED EXPROPRIATION OF ASSETS

• Evidence has emerged from within Sonatrach that the company CEO Hakkar has contemplated the expropriation of Petroceltic’s assets as early as November 2020
• He opted for the expropriation and instructed Sonatrach’s internal and external counsels to prepare for arbitration before any notice to Petroceltic was given, casting serious doubt over the company acting in good faith to resolve issues
• Sonatrach demanded from Petroceltic to pay Petrofac invoices without giving Petroceltic the opportunity to verify them, pointing to a corruption scheme involving payments form Petrofac to Sontrach chief Hakkar

Sources in Sonatrach have shared with us that the legal department has received instructions from CEO Toufik Hakkar to initiate a bogus claim against Petroceltic in order to cover up management mistakes and corrupt practices before the Algerian Prime Minister and the Energy Minister. The instruction was given around a month before the unfounded termination notice was given to Petroceltic, which points to the company acting in bad faith in the subsequent negotiations with Petroceltic. The news of Petroceltic asset’s expropriation caused an outrage among the investor and diplomatic community. Sonatrach has been scrambling to figure out how to defend the decision by Hakkar to illegally remove Petrocletic from the joint venture, after it became apparent that the single-handed move by the CEO is about to cause irreparable damage to the organization. The instructions to the legal department of Sonatrach and their external legal advisers according to the source is to accuse Petroceltic of corruption in order to cover up its own internal cash corruption scheme involving EPC contractors.

Mr. Hakkar, enjoying a sound support from the Prime Minister and the Energy Minister, has been setting up his internal corrupt circle for some time. This development was closely monitored by and has raised a lot of eyebrows in the West. He appointed individuals at the top of Sonatrach simply on the request of his wife and friends, thus creating a mafia-like organization at the top of the only major cash cow organization in Algeria. The foreign oil companies operating in the country as JV partners with Sonatrach were not asked for money directly, but were milked by the contractors close to the leadership of Sonatrach. Mr Hakkar and his crew would then lean on the foreign companies to pay inflated costs of the contractors, who in turn would grease their pockets.

There is talk in oil and gas circles that foreign investors in Algeria are fed up with their treatment by Sonatrach and asking G7 governments to sanction Algeria over action which represent blatant attack on foreign companies in Algeria. It has prompted Petroceltic to join others to seek to add Hakkar and his cronies as well as the state owned Sonatrach on the sanction lists in the US and the UK. Creating such mafia-style circle at the top of Sonatrach has allowed Mr. Hakkar to extract significant monetary benefits from contracts awarded to friendly contractors, some of which are being investigated for corrupt practices by UK Serious Fraud Office. Sources in Sonatrach have confirmed to us that EPC contractors’ money very often end up directly in Mr Hakkar’s pockets. That would explain why when Petroceltic legitimately took its time to verify invoices issued by Ain Tsila EPC contractor Petrofac, Mr. Hakkar decided to expropriate its stake in Ain Tsila.