Investment Rule 51/49 Will Not Be Withdrawn From The New Hydrocarbons Bill

The new hydrocarbons bill did not amend the 51/49 rule for partnership with foreigners in oil and gas projects, as Sonatrach’s share in all projects will be at least 51%.

According to the text of the project, which copy is available to Echorouk, in the case of a partnership with a foreign party, the share of the National Company for Hydrocarbons (Sonatrach) is estimated at a minimum of 51% at least, while the share of the foreign party is 49% at most.

Regarding Sonatrach’s contribution to the financing of projects’ investment, either through tenders or through the granting of consensual transactions, this is done in consultation with the National Agency for the Valuation of Hydrocarbons Resources (ALNAFT) in order to determine the value of the financing (share) that Sonatrach is sponsoring.

The draft law provides for the possibility of the Sonatrach National Oil Company to grant oil and gas projects under the terms of the agreement. Article 75 states that “in consultation with ALNAFT Agency, Sonatrach can enter into a contract of hydrocarbons in a consensual form (gré à gré) “, and this remains subject to the extent of conformity of the contract with the provisions of the law.

The law passed the regulations on the burning of gas in the air or the so-called “Torchage” for an annual tax that is calculated on the basis of DZD 7000 per thousand cubic meters, and any delay in payment resulted in an increase of 1000 for each day of delay.

The law exempts companies from paying the special tax that is resulting from the quantities of burned gas during the research process and conducting the tests on the gas wells.

The law provides for penalties against the prospecting companies or contracting parties of a project and states that if they do not respect any provision of the law that has been observed by the ALNAFT or the provisions of the signed hydrocarbons contract, suspension of exploration license or cancellation of the hydrocarbons contract can be applied.

The hydrocarbons agency ALNAFT may impose a fine of DZD 10,000 or each day on the owner of the hydrocarbons’ transfer license in case of a proved violation of the provisions of the hydrocarbons law or the contract that the owner signed.