Sonatrach is a fully state-owned integrated oil and gas company headquartered in Algeria. In 2020, it had USD 23 billion in revenue and a reported 200,000 employees*. Sonatrach is the national oil company of Algeria. It is the largest company in Africa with 154 subsidiaries and is often called the first African oil major. Sonatrach lacks a robust climate change strategy and governance process.
Sonatrach is in the early stages of developing a renewable energy portfolio. The company plans to use some of its generated renewable electricity for own consumption at its oil sites, but also plans to sell some of this renewable electricity to customers.
Sonatrach also has some small-scale low-carbon activities underway such as the signing of memorandums of understanding (MoUs) with Eni and Total for renewable energy development. By 2030, it aims to reach 1.3 gigawatts (GW) of installed renewable energy capacity. However, this target constitutes less than 0.001% of the company’s 2019 sold product output. The company will have to significantly step up its ambition if it intends to transition its business model and scale up its renewables activities to replace its fossil fuel activities.
The share of gas in Sonatrach’s sold product mix increased by nearly 3% between 2014 and 2019, leading to a marginally downward trend in the company’s scope 1, 2 and 3 emissions intensity. However, this rate of change is still far below the rate required by the company’s 1.5°C pathway. Going forward, Sonatrach will have to increase its emissions reduction rate by more than 10 times its current rate of decline to align with its 1.5°C pathway between 2019 and 2024.
Sonatrach receives a trend score of -. If the company were reassessed in the near future, its score would likely decrease. An increasing share of gas in the company’s sold product mix led to a marginally downward trend in its scope 1, 2 and 3 emissions intensity between 2014 and 2019. However, with no emissions reduction targets in place or clear plans to decarbonise its portfolio, the company will not be able to increase its emissions reductions at the rate required by its 1.5°C pathway. Further, Sonatrach’s early-stage renewable energy activities are undermined by its otherwise lacking low-carbon transition plan and the lack of a climate change strategy and governance.
Sonatrach has not set any emissions reduction targets. However, the company has committed to ensure that 80% of the energy consumption at its oil sites is solar powered, and to have a solar power production capacity of 1.3 GW, by 2030. The company’s targeted solar power production capacity equates to less than 0.001% of the company’s 2019 sold product output.
Sonatrach does not have a clearly defined low-carbon transition plan or deployment schedule for its renewables activities to achieve its goals. It is currently undertaking measures to reduce emissions from flaring to less than 1% but has not provided any timeline associated with this target.
Sonatrach’s main business activities continue to rely on fossil fuels; these constituted 100% of its sold products in 2019. In 2019, Sonatrach undertook some small-scale development in renewables, such as signing to MoUs with Total and Eni to develop renewable energy projects.
Sonatrach’s fuel mix remained relatively unchanged between 2014 and 2019, meaning there was no improvement in the company’s scope 1 and 2 emissions intensity. The share of gas in its sold product mix increased by 3% during the same period, leading to a marginally downward trend in its scope 1, 2 and 3 emissions intensity.
Apart from its renewable energy target, there are no other signs that Sonatrach is preparing for the low-carbon transition. The company lacks a climate-related strategy and governance, and its main business activities continue to rely on oil and gas. The company needs to make significant strategic changes to align with its 1.5°C pathway.