The change in chief executive officer at First Calgary Petroleums Ltd. this month will slow progress on the company's Algerian joint venture in a $1.3- billion natural-gas project, Oil Minister Chakib Khelil said.

First Calgary and dissident shareholders agreed April 14 that Shane O'Leary, former chief operating officer, would replace Ricahrd Andersonas president and CEO to end an investor battle at the Canadian producer. Investors led by Waterford Finance & Investment Ltd. had sought to oust Anderson because of the company's lagging share price.

First Calgary has a 75 percent stake in the Algerian natural-gas project, includes building a plant to process gas into a liquefied form so it can be transported by tankers to distant markets. Its partner is Sonatrach, Algeria's state energy company, which controls the remaining 25 percent.

``This change will definitely disrupt the project,'' Khelil said in an interview in Algiers yesterday. ``The new CEO doesn't have the capacity to move the project forward at the same speed. He will need more time to build up ties with Sonatrach officials.''

The project will be designed to produce 260 million cubic feet of gas and 20,000 barrels of gas liquids a day, according to First Calgary's annual report.

Anderson led the company since 1997. First Calgary, which has no production, has not posted a prodit since at least 1998 and accumulated losses of about $71 million in the past decade, according to data compiled by Bloomberg.

International Projects

O'Leary, 51, has more than 30 years of experience and has worked on projects in the Middle East, Africa, Trinidad and Tobago, and Alaska, according to UBS Securities LLC analyst Memet Kont in a note this month. O'Leary received a chemical engineering degree from Canada's Queen's University and obtained a master's in business from the University of Western Ontario, according to a First Calgary statement.

O'Leary said during a press conference in Calgary on April 14 that the company's relationship with the Algerian government was unlikely to change as the compromise left management largely intact, and Anderson would act as a consultant for several months.

Khelil had voiced concern before the management change was agreed, saying in a letter to the company on April 6 that Algeria was ``deeply concerned'' about the possible removal of Anderson and would look ``negatively at any changes at this critical time,'' according to a copy entered as court evidence.

Khelil said yesterday that Algeria will take management into account when choosing partners in future projects. ``We will favor companies with stable management,'' he said.