Petroleum Africa
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Sunday, June 2, 2019
Algeria’s latest version of its hydrocarbon law is complete and will be submitted to authorities for approval according to Mohamed Arkab, the country’s Minister of Energy.
The draft hydrocarbon law covers institutional, contractual, fiscal and environmental terms.
Africa’s third-largest oil producer and number one natural gas producer is looking to revamp its exploration strategy and attract fresh investment. A decline in reserves has been noted in the past few years despite several recent discoveries. Meanwhile, the national demand for hydrocarbon products is increasing and the country is facing a whopping seven percent annual GDP growth.
The draft has been finalized according to the orientations of the Inter-ministerial council and has been handed over to the various ministerial departments for possible add-ons,” said Arkab. He did not provide a deadline as to when to expect final approval.
During the announcement, Arkab mentioned the 51/49 rule, which forbids foreign investors from owning north of 49% of any company in Algeria would not be withdrawn from the future bill. “We will not alter the 51/49 rule. However, further amendments will allow us to improve investment conditions from a legal, institutional and fiscal point of view,” Arkab said.
Arkab went on to say that the aim of drafting a new law was to is to counter a “slowdown in new exploration and production contracts” as well as “restore the country’s extractive industries attractiveness, increase production levels and bring in foreign direct investment in the petroleum sector, without threating national sovereignty.”
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