Government set to reshuffle the Hydrocarbons law to attract foreign investments

The cabinet will discuss next Wednesday a draft law supplemental to the Hydrocarbons law issued in 2006 which is set to introduce radical changes in the Hydrocarbons sector as well as in the types of deals between Sonatrach and the foreign oil companies operating in Algeria.

• The draft law will review the party that deals with the exceptional tax on benefits while the investment rule, commonly known, 49/51 will is not put on the agenda of this meeting and remain unchanged.

• A presidential source has indicated to Echouorouk that the draft law, that contains 250 articles, is pivotal as it will reduce most of the taxes including that one levied on the benefits garnered by the foreign companies in addition to the part related to the exploitation of the gas rocks.

• The draft law is set to correct the gross mistakes contained in the hydrocarbons law elaborated by the former energy and mines minister Chakib Khellil. Many experts consider this law as an impediment for foreign investments in this sector and led to a judicial battle between the Algerian authorities and ANADARCO that caused a loss estimated at $ 5.4 billion to the treasury.

• The previous law obliged foreign oil companies like Respol, Total, BP and Anadarco to pay extra taxes retroactively on their benefits each time the price of oil on the international markets exceeds $ 30 a barrel.