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Macron Seeks Warmer Algeria Ties, But a Gas Deal Is Elusive
(Bloomberg) -- Emmanuel Macron travels this week to Algeria, a former French colony and one of the world’s largest gas producers. But it’s unlikely the French president will return with the one thing that has European leaders scouring the globe for: commitments for alternative supplies of liquefied natural gas.
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Even though Macron will be accompanied by Catherine Macgregor, chief executive officer of utility Engie SA, the trip is not about replacing gas imports from Russia but about mending relations, according to French officials close to the president. Furthermore, it’s unlikely Algeria has excess supply to offer France.
Energy markets have been thrown into turmoil since Russia started squeezing gas supplies to Europe, leading German Chancellor Olaf Scholz to accuse Moscow of using energy as a weapon to retaliate against European Union sanctions. Concerns over the economy pushed the euro currency to a record low against the dollar this week, with inflation at the fastest in years.
Macron warned of potential hardships in coming months and asked the French to “accept paying the price for our freedom and our values,” in a speech last week commemorating the liberation of a town in southern France in World War II.
French government spokesperson Olivier Veran told reporters Wednesday that the energy crisis “will be part of the themes on the table, of course” during Macron’s visit.
Italian Prime Minister Mario Draghi visited Algeria twice since Russia invaded Ukraine six months ago, and in July announced that the Algerian state energy company, Sonatrach Group, would supply Italy with an extra 4 billion cubic meters of gas over an unspecified period. Algeria has provided Italy with 13.9 billion cubic meters of gas since the start of 2022, 113% more than was initially earmarked for Rome, according to a statement by Sonatrach.
Italy, which is linked to Algeria by pipeline, is doing better than many European peers in reducing its dependence on Russia following Russia’s invasion. The nation has cut its reliance on Russian gas to 25% from about 40% at the start of 2022.
New Reservoirs
Algeria is already Europe’s biggest gas supplier after Russia and Norway, including to France. It has discovered new reservoirs that have drawn growing interest.
Rather than clinching new commitments for energy supplies, Macron will be looking to reset relations after years of tensions, said the officials who asked not to be identified as per standard practice. In a three-day visit, Macron will stop in the capital Algiers and Oran, Algeria’s second-largest city. He will meet young entrepreneurs, religious leaders and hip hop fans.
Macron’s 2017 presidential win was warmly welcomed by Algiers. On the campaign trail he denounced what he called “crimes against humanity” committed by France during its colonial rule of Algeria, and during his first term he returned the severed heads of hundreds of Algerian resistance fighters that had been held for a century and a half in a Paris museum.
Change of Tone
Macron’s tone changed however as Algeria’s ageing military leaders who have ruled since independence from France tried to stem mass pro-democracy protests. He accused Algeria’s “political-military system” of being “tired” and stoking “hatred toward France.”
In response, Algeria closed its airspace to French military planes, affecting peacekeeping operations in Mali, and recalled its ambassador to Paris over what it called “unacceptable interference in its internal affairs.”
France has also slashed by half the number of visas granted to Algerians -- as well as to Tunisians and Moroccans -- after their governments refused to facilitate the return of nationals living in France with irregular immigration status.
The north African country has turned increasingly to Turkey, China and Russia for commercial deals and to Italy for energy agreements.
Even if Macron manages to make amends during his visit, Algeria’s state-run energy company, lacking investment, says it doesn’t have the capacity to provide more to France in the short term.
The best Macron can hope for is to try to lay the foundations for a new relationship, according to Ali Bey Nasri, president of the National Association of Algerian Exporters. “France has to start seeing Algeria like a partner,” he said.
(Updates with Veran remarks in fifth paragraph)
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