Monday, October 14, 2019

Summary of the new Algerian hydrocarbon law 2020

Summary of the new Algerian hydrocarbon law 2020

Algeria's new hydrocarbon bill 2020

On the sidelines of a national conference on bets on the completion of the African continental free trade zone agreement, Mr. Arqab said in response to a question on the content of the hydrocarbons bill recently approved by the government, three types of oil contracts were included in the partnership.

It is a "concession contract" and a "risk-based service contract" as well as a "production sharing or sharing contract" in force by the world's largest oil and gas companies.

"We have included three types of oil contracts in the hydrocarbon bill to bring as many foreign investors as possible," he said.

On the other hand, Mr. Arqab asserted that the foreign partners whose concerns have been heard confirmed that they are "not disturbed by Rule 51/49 (the march of foreign investment in Algeria) and therefore have been retained".

Include four types of taxes:

On the other hand, the minister pointed out that the amendments included in the draft hydrocarbons law has also touched the tax system as the latter "is not clear in the law in force."

He pointed out in this regard that "the inclusion of four types of taxes" in relation to the tax system, which would "preserve the state revenues as well as simplify the tax system so that there are no changes every year in the tax system, which greatly annoy investors."

In his presentation on the reasons for the decision to revise the hydrocarbons law, the Minister of Energy said that "the activity of hydrocarbons knows a major transformation in the world and that Algeria does not remain isolated from this transformation."

Government Meeting: Approval of the preliminary draft of the new hydrocarbons law

He added that the hydrocarbons activity requires advanced mechanisms and dealing with companies owning technology, pointing out that "the area of ​​the national barn mine is 1.5 million km 2, where currently only uses 40% of this total area."

"To develop this area, we need foreign partners to accompany us in continuing our production and development," said Mr. Arqab.

In the same context, the minister highlighted the importance of developing hydrocarbon production in view of the increasing domestic demand for gas and petroleum products by 7 percent each year, which must be accompanied by adequate production.

One reason for the revision of the hydrocarbons law is that Mr. Arqab said that the exploration undertaken by Algeria in the past years was "weak" compared to the objective set out in this context.

"Of the 67 regions in the South that have been submitted to the competition, only 19 have been received since 2005, while only 13 contracts have been signed so far this year," the minister said.

"We talked to the big companies that are ranked in the top five in the world and we asked them to inform us about the flaw in the current hydrocarbons law," the minister said, adding that the representatives of these companies said that there are two important points related to "the legal system of hydrocarbons activity. Integrated "and the second related to" the tax system. "

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