Algeria to Maintain Windfall Profit Tax, Energy Minister

Algeria Minister of Energy, Youcef Yousfi said Monday that the upcoming law on hydrocarbons will maintain the windfall profit tax (TPE).

Mr Yousfi told the local radio that “the windfall profit tax will not be cancelled, as the amendments of the hydrocarbon law (05-07) suggest imposing such taxes,” adding that “the amendments will affect neither the collection of hydrocarbons taxes, nor the windfall profit tax.” “The hydrocarbons taxes would take into account the investments that are to be launched and difficulties facing investors in terms of the development of oil plants,” he specified. Concerning the agreement reached between the state run hydrocarbons giant Sonatrach and the US Anadarko Petroleum Corporation to resolve the dispute regarding Sonatrach’s implementation of Algeria’s 2006 windfall profits tax, Mr Yousefi said such an amicable resolution does not mean that the windfall profit tax has been cancelled. The agreement will net the Texas group $4.4 billion over several years. Anadarko statement already mentioned that the parties’ agreement will become effective upon approval by the government, estimated to occur within the next four months. Upon such approval, the existing arbitration proceeding between the parties will be dismissed. The statement reads that “this amicable solution maintains Anadarko’s long-standing partnership with Sonatrach surpassing 1.5 billion BOE (barrels of oil equivalent) of cumulative production and advancing the El Merk mega project toward first production.”