TUNISIA - Afif Chelbi.

The Minister of Industry, Energy & Small and Medium Entreprises since the cabinet was reshuffled in November 2004, Chelbi has succeeded Fethi Merdassi who had served as minister of industry and energy since August 2003.

Chelbi on Oct. 28, 2005, announced that foreign and local companies were to be able to look for oil and natural gas in 82% of Tunisian territory. He said the authorities had decided to extend the area to 53,300 square miles in which companies may search for oil and gas. Previously, the government had said it was to grant 12 prospecting permits in 2005. In 2004, just three such licences were approved. By late October 2005, only European companies had been granted such concessions. A bigger number of foreign oil companies have joined the E&P business for oil and gas since then and Chelbi has been keen on attracting investors in the energy sector.

Fethi Merdassi previously used to be the minister for development and international co-operation and foreign investment, a post since August 2003 held by Mohammed Nouri Jouini. As energy minister Merdassi had replaced Moncef ben Abdallah, who had held this portfolio since Oct. 9, 1997, and had been retained through successive government reshuffles.

One of Chelbi priorities is the planned energy integration with Europe and fellow Maghreb countries. It is Chelbi who signs the E&P agreements with foreign and local companies, together with the head of the state-owned petroleum company ETAP. But, like his predecessors, he delegates power and devotes time for all the industries in the country, with emphasis on those which are still controlled by the state.

It was under Merdassi that the portfolio was renamed as Ministry of Industry and Energy. Under Chelbi, the portfolio was expanded to cover small and medium sized businesses. The ministry controls all the state-owned companies of the energy and industrial sectors. These include:

Entreprise Tunisienne d'Activites Petroliere (ETAP), in charge of the petroleum sector as well as state's partnerships with foreign and local E&P operators. It handles oil/gas production, exports and imports (see omt16TunisExportsApr14-08). Its exploration department makes the annual offers of E&P blocks. All data on such blocks are available at reasonable fees and the department offers a special data room at its premises for companies interested. The Chairman and CEO of ETAP is Khaled Becheikh, who has developed a good working relationship with Minister Chelbi.

ETAP was set up in 1972 and began operations in 1974. Its management has been under constant pressure by foreign companies to keep improving the country's E&P regime.

Societe de Recherches et d'Exploitation des Petroles de Tunisie (SREPT), in charge of exploration and the upstream sector.

Societe Tunisienne de l'Electricite et du Gaz (STEG), the power and gas utility.

Societe Tunisienne des Industries de Raffinage (STIR), the oil refiner. The Chairman and CEO of STIR, Ali Labiadh, is concentrating on a project to upgrade and expand the country's only oil refinery at Bizerte and on an export refinery to be built at La Skhira oil terminal with a capacicy of 6-8m t/y (see down15TunisRefPetchApr7-08).

Societe Nationale de Distribution des Petroles (SNDP), in charge of oil products and LPG distribution, but with a market share of less than 20% as the operators in this business include foreign companies (see DT No. 15).

Other companies in the energy sector include the Trans-Tunisian Pipeline Co. (TTPC), part of ETAP and STEG, which manages the system of gas pipelines in the country; the Trans-Tunisian Pipeline Service Co. (Sergaz), owned 66% by Snam of Italy's ENI group and 34% by ETAP, manages the Tunisian transit sector of the TransMed gas pipeline from Algeria to Italy; and SEGMA, which does an inventory of the country's offshore gas reserves. SEGMA is owned 40% by ETAP, 40% by Total and 20% by OAPEC's Apicorp.

Mohamed Akrout is the man in direct charge of the petroleum sector in his capacity as director-general of the ministry's energy section. He led Tunisia's delegation to the 6th bilateral UK-Tunisian Energy Steering Committee Meeting in Sfax on Feb. 27, 2008, which discussed opportunities for co-operation in this country's energy sector. That brought together representatives of public and private firms operating in the energy sector in the two countries. The British team was led by UK Ambassador to Tunis Alan Goulty and included BGI, Petrofac, Cairn Energy, International Power and Clarke Energy, operating in petroleum E&P, wind energy and co-generation. The Tunisian team included CEOs of the state's energy firms and agencies: ETAP, STEG and ANME. The Steering Committee reviewed actions from the previous meeting held in Edinburgh in May 2007. Participants heard about future Tunisian energy projects.

In recent years Tunisia's industrial sector, which includes manufacturing, energy and mining, has represented more than a quarter of the GDP, with industry alone accounting for almost 20% of that as well as 19% of employment and more than 85% of total exports. More than 50 nationalities are represented among industrial companies in the country which now exceed 12,000.

Chelbi's ministry has spent more than $4 to upgrade the industrial sector. About 2,200 enterprises have participated in the upgrade, including small-to-medium sized companies. As a result, Tunisia now is competitive in electricity as well as in transport.

There are more than 1,750 foreign companies involved in Tunisia's various industries geared for export. Under an agreement signed in 1995, Tunisia will have free access to the EU market from 2008. Chelbi plays a key role in the privatisation of state industries, in collaboration with other ministries.

Energy integration with Europe is to have major economic and geo-strategic implications for Tunisia. Among other things, it will raise the importance of gas trunklines from North Africa to the European continent. These consist of the TransMed gas pipeline from Algeria to Italy, which has been expanding considerably in recent years and passes through Tunisia, and the pipeline from Algeria to Spain which passes through Morocco and the Strait of Gibraltar. A gas pipeline from Libya to Italy started operations in late 2004. Two other gas pipelines from Algeria are under construction, with one to Sardinia and a marine line to run directly to Spain.

Chelbi, together with Development and International Co-operation Minister Mohammed Nouri Jouini, and Finance Minister Mohammed Rachid Kechiche and other key members of the government have been involved in the spread of public private partnerships (PPPs). PPPs are being promoted to undertake infrastructure projects. The Carthage Power Co. (CPC), which operates a 471-MW power plant at Rades on the Bay of Tunis, is one of the major examples of PPPs.

New plans call for PPPs for the management of the huge Enfidha project on the central east coast, harbours, highways and water treatment stations. Chelbi is encouraging local and foreign companies to establish PPPs for electric power generation as in the case of CPC. BGI, the largest investor in Tunisia's energy sector, is to establish a major IPP.

Although the government is demonstrating its intent to increasingly involve foreign investors in the local economy, however, a lingering tendency towards protectionism still characterises the relationship between state firms and the private sector. Chelbi and Ministers Jouini and Kechiche, under the leadership of Premier Mohamed Ghannouchi, are pushing public sector firms to open up and for PPPs to be created (see the background in down16TunisWhoApr17-06).

Chelbi visited Tehran in February 2008 at the head of a large Tunisian delegation and, in a meeting with Iran's Minister of Industries and Mines Ali Akbar Mehrabian, discussed the expansion of industrial ties between the two countries. Chelbi then said there was potential for joint projects in the automobile, food and construction material industries. He said he was keen to have an Iranian car manufacturing plant built in Tunisia. Mehrabian proposed that the two countries jointly invest in a steel plant. Fars news agency said the offer was welcomed by Chelbi.

Chelbi also met with Iranian First Vice-President Parviz Davoudi, who said Tunisia was to become the base for Iran's trade ties with North African states. He praised Tunisia's principled stance on support for Iran in international circles and expressed Tehran's readiness to transfer to Tunisia its experience in various fields including construction of dams and power plants.

Chelbi met with Iran's Energy Minister Parviz Fattah. The latter said: "Iran and Tunisia can...exchange their capabilities in the field of electricity", using new energy sources. Fattah noted: "Iran has managed to generate 70 MW of wind power this year and aims at increasing the amount to 500 MW". Chelbi said "although the two countries enjoy very good diplomatic ties, bilateral co-operation in the energy sector is far from satisfactory". Later it was reported that a delegation from the Iranian Energy Ministry would visit Tunisia to explore possibilities for new power plants to be built in the country.

At a meeting in Tunis with Chelbi and PM Ghannouchi on Jan. 4, 2008, visiting ENI CEO Paolo Scaroni focused on the future of Transmed, which is being expanded by about 6.5 BCM to 33.5 BCM/year by 2012. The talks included development of two oil and gas fields located in the Gulf of Hammamet, which, once in production, will make a substantial contribution to Tunisia's energy supply (ENI's current equity production in Tunisia averages about 17,000 b/d of oil equivalent).