Hassi R'Mel
Sitting on 4500 km3 of natural gas reserves, Algeria is the second most hydrocarbon-rich country in Africa, and the 10th ranking gas producer in
the world.
Data from OPEC and IEA.
This is in large part thanks to the Hassi R'Mel gas field, which extends for 2100 square kilometres (almost the size of Luxembourg) underneath the wilayas of Ghardaïa and Laghouat, at the heart of the Algerian Sahara. The gas field currently produces about 31 cubic kilometres of gas per year, serving not only Algeria, but much of Europe.
Hassi R'Mel is the point of departure for the Trans-Mediterranean (Transmed) gas pipeline, which (as of 2024) accounts for 26% of Italy's needs for natural gas; for the Maghreb-Europe Pipeline (MEG) to Spain, which accounts for 46% of Spain's needs; and for the LNG terminals on the coast, which bring gas to France, Greece, Türkiye, the UK, Belgium, the Netherlands, the US, and Japan. Hassi R'Mel will also soon be the crucial point of arrival of the planned Trans-African gas pipeline, connecting the Warri region of Nigeria to Europe through its nodes. The extraction of gas in Hassi R'Mel makes it not only one of Europe's main energy hubs, but a fundamental piece of the Algerian economy; and it has been so since the country's independence in 1962.
Indeed, the story of Hassi R'Mel begins even before the establishment of the Republic of Algeria. The field may be only the fifth in the world by size, but it was the very first to become a major international hub for gas production, back in the 1950s, when natural gas was still mostly considered an annoying by-product of oil extraction, and offshore gas pipelines or LNG transportation were still in their infancy.
As is often the case, the political and geopolitical aspects of these infrastructure developments are as impressive as their technology. Hassi R'Mel was discovered by the probes of the French consortium CREPS (Compagnie de Recherches et d'Exploitation de Pétrole au Sahara) in December 1956, just as the guerrilla movements challenging the French occupation of Algeria were escalating into full-scale warfare, and as France was coming under significant international pressure to end its colonial rule.
Hassi R'Mel, like its neighbouring oil field Hassi Messaoud (300km south), became inextricably linked with the war, with the development of Algeria as an independent country, and with European energy strategies for decades to come. The French engineers who had travelled 550km south of Algiers, crossing a desert without roads and without water, were probably at least partially aware of these substantial geopolitical entanglements. Finding large quantities of "French" oil and gas was hailed in France as an absolute victory, the culmination of 30 years of studies and research — proof that the French oil engineers could do just as well, and even better, than their American counterparts. Musso, Marta. 'Petrolio e politica nella decolonizzazione algerina: verso un network energetico europeo?' Cahiers d'études italiennes, no. 22 (20 April 2016): 141–56. https://doi.org/10.4000/cei.2925. For France, having sizable amounts of hydrocarbons in their territory meant energy independence, and control over what was becoming the most precious geopolitical resource of the time. In the 1950s, oil consumption for transportation and the petrochemical industry were exploding, replacing coal as the most important energy source. However, France, like the rest of Europe, did not have sizable oil fields, and was dependent on imports from the Middle East and from the US, mostly managed by American companies. Particularly in the context of the Cold War, being able to count on oil produced in French-controlled territories was an important part of the country's energy security strategy, and the reason for the massive research investments carried out by the state in the Sahara. Indeed, with the discovery of oil and gas, the desert became for France even more important than the north of Algeria, which had been under its rule since 1830, and was considered an integral part of the French territory.
To the Algerian Front de Libération Nationale (FLN), meanwhile, there was a sense that oil was a way towards freedom, a tool for negotiations and development. As armed conflict raged, a clandestine oil diplomacy played out with governments and oil companies, with the FLN warning that only an independent Algerian government would have the right to give out oil and gas concessions in the Sahara, whereas any concession signed with France would be considered void after independence. Secret negotiations rarely leave concrete traces in archives; much speculation has occurred over the years about what exactly was said behind the scenes. The French government, for its part, accused Exxon, Saudi Aramco (back then, US-owned), and other majors of funding the FLN in exchange for future oil concessions. Several memoirs from oilmen of the time confirm that oil companies, including the French companies operating in the Sahara, paid the FLN in exchange for keeping their infrastructure safe during the war; and that many sent their envoys to Évian — where peace treaties were under consideration, and eventually agreed in 1962 — monitor the negotiations. See for example Malek, Rédha. L'Algérie à Évian: Histoire Des Négociations Secrètes, 1956-1962. L'épreuve Des Faits. Paris: Éditions du Seuil, 1995; Pirani, Mario. Poteva andare peggio. Edizioni Mondadori, 2012; Cantoni, Roberto. Oil Exploration, Diplomacy, and Security in the Early Cold War: The Enemy Underground. 1 edition. New York: Routledge, 2017. In particular, Mario Pirani from ENI, the Italian oil company, claimed that he acted as a ghost consultant for the FLN during the negotiations, advising on oil matters. Pirani, Mario. Poteva andare peggio. Edizioni Mondadori, 2012. Memoirs apart, it has been shown that the UGEMA, the Union of Muslim Algerian students, which was part of the FLN, provided thousands of scholarships in the US, Italy, and Eastern Europe to train students in oil management, schemes often sponsored by the companies, which were interested in training local personnel from producers' countries. See Beasley, Betsy. 'White-Collar Wildcatters and Wildcat Strikes: Oil Experts, Global Contracts, and the Transformation of Labor in Postwar Houston'. In Working for Oil. Comparative Social Histories of Labour in the Global Oil Industry, by Touraj Atabaki, Elisabetta Bini, and Kaveh Ehsani, 257–84. London: Palgrave, 2018.; Ait-Laoussine, interview with the author (2015) Meanwhile, in the pages of El Moudjahid, the clandestine newspaper of the FLN, at least one or two articles in every issue were dedicated to the activities of the oil companies in the Sahara, with concessions and infrastructure plans sharply detailed. In 1957, the newspaper warned that "the foreign companies that have invested their capital in the Sahara and those who refer to the French government to obtain research permits are building… on sand." "Les illusions sahariennes de la France et ses ayants-droit," El Moudjahid, 15 November 1957.
Negotiations over sovereignty in the desert dragged on for weeks in the final phases of the war: when the Évian agreements brought an end to the war, and to France's 130-year rule in Algeria, an entire chapter of the peace treaty was dedicated to the hydrocarbon industry in the Sahara. The "Declaration of principles on co-operation for the exploitation of the wealth of the Saharan subsoil" stated that "Algeria shall inherit the rights, prerogatives and obligations of France as a public power granting concessions in the Sahara," while at the same time, "Algeria shall confirm all the rights attaching to the mining and transport entitlements granted by the French Republic in pursuance of the Saharan petroleum code," established by De Gaulle in 1958. This solution was the result of weeks of heated debate that more than once risked derailing the negotiations to end the war. It was clearly not a solution that was acceptable to Algeria in the long run, as it essentially left colonial patterns of exploitation in place. For the new Algerian establishment, the oil and gas reserves were the main opportunity for raising the capital that Algeria needed to develop as an independent country, lifting out of poverty the large majority of Muslim Algerians, and ending the gap with the industrialised world.
The full mise-en-valeur of the hydrocarbon resources was at the heart of an industrialisation strategy based on heavy industry, as favored by many economists at the time. In order to implement this, the government needed to acquire full control over the resources, from sale prices to the volume produced, the infrastructure of distribution, and the output of petrochemicals. Acquiring control became a priority for Algeria. A few months after independence, the Algerian government established a state hydrocarbons company. It also adopted an increasingly strident voice on the international stage, arguing for the need to re-equilibrate international markets in favour of resource-producing countries, and advocating for new international oil prices that would promote the economic development of producing countries. Initially, Algeria even refused to join OPEC (the Organisation of Petroleum Exporting Countries), as they considered it too moderate. It eventually did in 1969, and negotiations for new international prices started to be conducted in a much more aggressive way, ending in a steep increase in prices with the Tehran and Tripoli agreements of 1971. When French companies in Algeria tried to refuse to obey the new agreements, the Algerian government seized the opportunity to nationalize its hydrocarbon sector, the first country to do so successfully. The move was hailed as a second day of independence, the day of economic independence. Abbas, F., L'indépendance confisquée, 1962-1978, Flammarion: Paris 1984. Most producer countries, particularly from the Arab world, soon followed Algeria in the nationalisation of their oil sector; sometimes, like in the case of Saudi Arabia, not for economic strategy on part of the government, but because of popular pressure.
Following the new contracts, and especially after the 1973 oil shock, the windfalls from oil and gas were used to push for a fast industrialisation of the country. Algeria developed a major industrial base, creating more than one million jobs in the span of a few years. Strong emphasis was also placed on education and welfare: in 1954, only about 500 Algerian Muslims were enrolled in university; in 1970, there were 12,500. The schooling system was universal and free, and so were health care and medicine. Hassi R'Mel, once barely a geographical expression (it literally means "sand pits"), visited only by sparse nomadic tribes, became a town with about 22,000 permanent residents, with schools, hospitals, leisure facilities, an airport, a motorway connecting it to Algiers in less than 7 hours. Sonatrach, the Algerian state oil company, is today the largest African company by revenue, and an important hub for developing competencies in the energy sector.
But during the 1970s, this narrow economic focus failed to spill over into other sectors, and to create economic opportunities for the whole population, particularly for unskilled labour. The failure at modernizing the agricultural sector, combined with high fertility, also left Algeria dependent on food imports, which were easily covered by hydrocarbon revenues only so long as prices were high. The Boumédiène administration (1965-1978) also put rigid, Soviet-style control over the industries it created; this, along with obsolete machinery and patents imported from the West and the Soviet Union, caused a failure in the industrialisation plans, with factories consuming oil windfalls instead of creating wealth. When the counter oil shock hit in the 1980s, with a drastic fall in world hydrocarbon prices, Algeria had to resort to the IMF to stop its foreign debt spiral, resulting in structural adjustment programs that mostly pushed for the privatization of the companies operating in the desert, without actually promoting economic differentiation in the country.
Algeria is still largely dependent on its hydrocarbon production, with as much as 98% of exports coming from the sector, and more than one third of GDP creation dependent on hydrocarbons. Half a century after the declaration of "economic independence," and sixty years after independence, the dark side of being a hydrocarbon exporting country is well visible. Algeria is struggling with many of the economic problems that are associated with being a resource-dependent country, with a Human Development Index (HDI) well below that of European countries (even though higher than the rest of the Maghreb area and of most of Africa), endemic corruption, and lack of democracy. The environmental problems caused by gas extraction are also more and more severe, both at a local level and at a country level; as a desert nation struggling with the low availability of arable land, rising temperatures, prolonged droughts, and increasing water scarcity, climate change impacts Algeria significantly.
In 2022, a massive methane leak in one of the Hassi R'Mel compression stations, dating back to 1984, was discovered by the satellites of the Italian Space Agency and the Technical University of Valencia; the leak was emitting into the atmosphere 939,000 tons of methane per year, an environmental disaster that scarcely made the news in either Africa or Europe. Like many other parts of the globe, Algeria is now urgently threatened by desertification, extreme precipitation, rises in sea levels, and wildfires. But though Algeria's government has spoken of a "climate emergency," it has taken minimal steps to change its energy policies. In 2023, the first bidding round for new oil and gas explorations in a decade was launched, and the Trans-African gas pipeline will ensure that Hassi R'Mel continues to be a world-relevant gas hub even with resources now depleted by 80%. In a geopolitical landscape that once again sees the Sahara as a safe hedge against "Eastern" interference, the building of such projects remains popular in Europe — even as doubts about the longer-term economics of natural gas exports begin tosurface with stronger pushes towards renewable energy. In 2021, at COP 26, Algeria refused to sign the pledge to cut methane emissions in the next 30 years. The refusal attracted little attention in the international community.
Yet the timid steps towards renewable energy that have been taken so far, interestingly, pass once again through Hassi R'Mel. In 2011, Sonatrach inaugurated the first hybrid solar-gas power station in Algeria (the second in the world with this technology), built near the extraction fields. With an installed power capacity of 150 MW, this single plant only serves a small portion of Algeria's electricity needs. But might one be able to glimpse in it a vision of future energy infrastructures? Many studies have been carried out in the past 20 years for electricity transportation from Algeria to Europe, with the goal of eventually replacing the gas pipelines. This is technically feasible. However, it would require enormous investments and political efforts not only on part of Algeria, but of Europe as a whole. It is important to remember that so too did the futuristic LNG and offshore technologies adopted 60 years ago; they still went ahead, building the Euro-African energy system on which we rely today.
