Vertical integration of Sonatrach complex in the Algerian oil industry Analytical study 1962-2022

Abstract

In the light of the existence of several strategic alternatives for organizations to compete in the industry to which they belong, the vertical integration strategy appears as one of the most prominent of these strategies that achieve the goal of growth and expansion for organizations in the industry, as this strategy is considered an effective alternative to the costs of market transactions, through the orientation of the organization to practice activities that precede the main activity of the organization itself or the so-called vertical integration back, as well as the orientation towards practicing subsequent activities or the so-called vertical integration forward. From here comes this analytical study to highlight the extent of the vertical integration of the national oil company SONATRACH in the Algerian oil industry, as the institution has taken since independence the strategy of growth and expansion in the oil industry through back vertical integration towards upstream activities and front vertical integration towards downstream activities. The study found that the Sonatrach complex currently owns 154 subsidiaries and partnership companies, of which fifteen are 100% owned covering the various oil industry chain, which enabled it to monopolize the industry in Algeria.