No more brain drain: Sonatrach’s new leadership team

Sonatrach Algeria
Sonatrach’s siege in Amenas central region, Algeria. Sonatrach is the biggest company on the African continent (2016 turnover: $27,9 billion in 2016) © Habib Kaki

Brain drain in Alegeria is real. In order to stop and reverse the flow of talent from leaving the country, the CEO of Algeria’s Sonatrach, a state-owned oil firm, has assembled a new leadership team, said a source from the company.

Following years of frauds, scandals, red tapism that saw short-lived CEOs, Algerian President Abdelaziz Bouteflika had appointed U.S.-trained Abdelmoumen Ould Kaddour in March 2017 so as to overhaul Sonatrach .

For Europeans countries, Algeria’s Sonatrach is crucial since it is an important source of energy in their quest to reduce dependence on Russia. As for Algeria, the state-owned oil firm plays a significant role in the country’s budget where economic security has helped prevent social turbulence. Given the high stakes, it is in this context that Bouteflika has chosen to reverse brain drain in the country.

While jobs at Sonatrach are plentiful and are sought-after, however in comparison to the rest of the world, pay scales depend on time served and are low.

“We have lost thousands of experienced and talented people mainly because we can’t give them a salary they get now in the Gulf and other countries,” said Kaddour in an interview in reference to the the brain drain exercise.

Kaddour, who came with his own team, has chosen 8 vice presidents from within the firm, said a source on the condition of anonymity since the appointments have yet to be made public.

“The appointments still need to be validated by a presidential decree but the top managers have already started,” as an initial measure to stop brain drain, said the source.

Kaddour aims to make Sonatrach, one of the top 5 state oil companies by 2030. Incidentally, last year, Algeria ranked 18th in oil output by the U.S. Energy Information Administration.

For Algeria, it is essential that it manages to retain its top talent and reserve brain drain trends of the previous years since Sonatrach holds the third biggest shale reserves in the world. In order to capitalize on it, the state-owned oil firm has been talking to Exxon Mobil and other firms to shore up energy export revenues, which make up 95% of its total exports.

Such explorations however require specialist skills, reservoir specialists, drillers, 10,000 engineers many of whom have left Sonatrach since 2010, said a manager of the firm. This is why it is crucial to stop the brain drain.

Many of those who have left work in the Gulg. Salary is a big concern.

“Friends and colleagues at Sonatrach call me on a daily basis seeking a position in the Gulf,” said Shikh. “(Monthly) Salaries here are between $5,000 to $15,000, while Sonatrach’s CEO salary is no more than $10,000.”

So as to reverse brain drain, Kaddour’s plans bank on education and training. He plans on creating a ‘Sonatrach Management Academy’ where retired workers will be given jobs to train new recruits. Bright people will also be given special rewards.

Any sudden hike in wage for new engineers could potentially spark protests from existing staff, including doctors and teachers who had gone on strike for months last year demanding increased pay to match inflation.

Much of Kaddour’s exercise to stem brain drain depends on how potential recruits size him up: whether he can last in his post in a country where a secretive elite made up of business tycoons, military, intelligence and those from the ruling party, reshuffles positions at their whims and discretions.