Algeria: Foreign Companies exert leverage for revamping of hydrocarbons law

Mystery still surrounds the fate of the fifth tender issued of late by the National Hydrocarbons Agency “Alnaft”. The result of this floating tender is expected to be known at the beginning of the month of September 2015.

Commentators wonder if this invitation to tender will be delayed or simply cancelled due to the drastic slump of oil prices since the start of this year bringing about a telling shrink in the country’s revenues.

With the price of the oil barrel now being as low as US 46 dollars,  this significant loss of profits ought to prompt the Algerian State to review its policy in the context of the investments.

In the face of this adverse situation, foreign oil companies are pushing  the Algerian Government to amend the law on  hydrocarbons through  among other things, a reduction in taxes and the repeal of investment rule 51/49, by putting forth their current financial constraints owing to the  oil prices drop and an international market currently gripped by recession.

According to economic expert, Abderrahmane Mebtoul, today the market situation is quite different. Companies have always paid a tax of $30 dollars when the oil prices were high, but today the oil barrel has plummeted to 46 dollars.  That’s why these worried companies are now eagerly seeking tax cuts.

Furthermore, the return of Iran’s sizable oil shipments on the world marketand the decrease in investments is not a motivating factor for the international companies to bid for fresh projects’ achievement  as it was the case previously.