Head of the Tunisian Company for Petroleum Activities Mohamed Akrout answers important questions about suspicions of corruption and transgression in finalizing oil contracts with foreign companies.

Mohamed Akrout, some say Tunisia is sitting on a huge wealth of oil secretly kept by your governmental institution. Is this statement true or mere allegation?

Head of the Tunisian Company for Petroleum Activities Mohamed Akrout answers important questions about suspicions of corruption and transgression in finalizing oil contracts with foreign companies.

Mohamed Akrout, some say Tunisia is sitting on a huge wealth of oil secretly kept by your governmental institution. Is this statement true or mere allegation?

(Laughing) It is not true. The monthly reports issued by the Tunisian Company for Petroleum Activities and the Ministry of Energy and Mines reveal the poor exploration, excavation and production of oil in Tunisia. How could anyone believe such false accusations when for the past ten years Tunisia has been recording an energy deficit that aggravates each year? We have not yet discovered any major oil or gas field since discovering El Borma field in southern Tunisia and Ashtart field in Sfax Sea— the maximum production size of both is 120,000 barrels and that was in the late 1970s. Oil production in Tunisia is shrinking, including that of El Borma field, which is the largest oil field in the country.

What is the reality of oil production and exploration in Tunisia?

The latest reports reveal that the average production of crude oil has fallen by 12% from March 2015 with 53.5 thousand barrels per day to March 2016 with 46.2 thousand barrels per day. National production of natural gas has also declined by 15% from 6.8 million cubic meters in the first three months of 2015 to 5.8 million cubic meters by the end of March 2016. On the other hand, the total number of licenses to explore and produce oil has decreased from 37 licenses by the end of March 2015 to 29 licenses by the end of the first three months of 2016. Additionally, there was no drilling of new wells for exploration or development in the first three months of the current year.

How do you respond to the accusations of corruption in the fuel sector in Tunisia directed by experts, party representatives and civil society?

Truth be told, there is no perfect behavior in the fuel sector and, therefore, it is natural for some breaches to occur. However, people who admit to the existence of corruption and misconduct in the Tunisian Company for Petroleum Activities are the ones that have some drawbacks about the amount that was alienated in Mescar gas field of the British Gas in the early 1990s.

The circumstances that led to making the decision regarding the field should be clarified. When the decision for developing Mescar field was made, the oil price at that time ranged between $10 and $12. Thus, the project did not have any financial or economical profitability to Tunisia. I also bet that none of the economists and oil experts of that time were able to predict the increase in the price of oil in 2008, which amounted to nearly $145. Therefore, there are some fallacies and speculations that Tunisia signed cheap contracts with foreigners to sell its oil or even that Tunisia is sitting on a fortune of oil and gas.

Court of Auditors’ reports, however, confirmed the presence of corruption and fraud in the fuel sector in Tunisia. What is your comment on that?

We have already addressed the reports and remarks of the Court of Auditors, which was evident in its regulatory reports. The Court of Auditors addressed in its notes some actions in a number of fields and the Tunisian Company for Petroleum Activities answered their concerns and attached the answers in their final report. Our officials have been proven honest as the Court of Auditors confirmed that there was no corruption, fraud or breaches in the oil contracts.

How do you comment on the protests demanding employment in foreign oil companies accused of not providing opportunities for the unemployed?

The fuel sector requires a large investment of money as opposed to a limited number of employees. The technologies used do not require a lot of working hands but high levels of skilled and experienced engineers.

Since the revolution, many workers demanded their right to employment, which is understandable considering that many oil companies allocate large investments for exploration, drilling or exploiting oil fields in underdeveloped areas, which further increases their poverty, marginalization and unemployment. However, these oil companies want in turn to make profits by producing and selling oil and gas since they are demanded to provide positive financial results, which was not tolerated by protestors.

A number of foreign oil companies faced difficulties and found themselves hostage to protestors, like what happened in the eastern field of Kerkennah Island in southern Tunisia occupied by the Tunisian Company for Petroleum Activities (by 51% of the capital) and by the British company Petrofac (by 49% of the capital).

What happened in Petrofac?

In Kerkennah Island, there were about 700 unemployed individuals with Bachelor degrees demanding employment. However, the limited operational capacity of PETROFAC, which is currently employing about 180 workers, could not provide job opportunities for all of the unemployed people on the island. Therefore, the only way for protestors to pressure the companies to employ them was to revolt. This caused the activity of the company to stop and led to enormous losses despite the fact that this company provides, in collaboration with the Tunisian Company for Petroleum Activities, social aid for the island’s population amounting to 2.5 and 3 million US dollars per year.

How did this crisis end?

Recently, a meeting took place in the headquarters of the Ministry of Energy and Mines in the presence of a representative of the Prime Minister and the Governor of Sfax. A number of suggestions were discussed including inviting a ministerial council to find a radical solution to the company’s crisis, the possibility to employ some people and to stop the protest that interrupted the company’s activity.

Is the Tunisia Company for Petroleum Activities cooperating with any foreign oil companies investing in Tunisia to promote development in the underdeveloped areas?

Yes, there is already a joint cooperation related to this issue. Four years ago, oil companies were able to raise 11.6 million dinars (5.5 million US dollars) to promote development in Tataouine, in southeastern Tunisia.

This three-year initiative was established by the Tunisian Company for Petroleum Activities, the Italian company Eni, the Austrian Company OMV and the Indonesian Medco.

This program represents a promising field to empower the state’s efforts in stimulating private initiatives alongside the actual contribution to restore infrastructure, promotion of regional development and ensure closeness to the large number of oil companies, especially in the southern regions of the country.

Another program will be launched soon in Kebili (southwest) with funds of over 3 million dinars (1.3 million US dollars) to promote development in that area. The same plan will be adopted in Kerkennah Island and Skhira where Petrofac has annual funds of about 3 million dinars (1.5 million US dollars).