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Algeria says to change energy law to draw investors

Energy minister says level of tax levied on foreigners will be reviewed, as well as the terms of production-sharing contracts, in a bid to boost involvement

Reuters, Wednesday 7 Dec 2011
Views: 552
Views: 552

Algeria is to review its hydrocarbons law to attract more foreign investment into its faltering oil and gas exploration, the state news agency quoted Energy and Mines Minister Youcef Yousfi as saying on Tuesday.

"We have to adapt to international reality. We have pretty comfortable reserves of energy, but we need to ... ensure the long-term security of supply and reinforce Algeria's role as a major player in the international energy trade," the APS news agency quoted Yousfi as saying.

He said the amounts of tax levied on foreign investors in the energy sector would be up for review, as well as the terms of the production-sharing contracts offered to foreign partners.

As the law stands, state-owned energy firm Sonatrach is the majority partner in all new exploration projects.

"All these aspects will be studied," the news agency quoted Yousfi as saying.

Algeria's last three bid rounds for oil and gas permits have attracted lacklustre interest from foreign firms, raising questions about whether it has enough new projects coming on stream to maintain output levels.

Foreign energy executives have said the tax terms, stipulated by the hydrocarbons law, are not attractive enough for them to buy into Algerian acreage.

Supporters of reforming the hydrocarbons law will have to get past resistance from powerful figures within the Algerian government who in the past few years have been behind a push towards resource nationalism.

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