Draft Algerian oil bill draws international praise
A proposed law that will make Algeria’s oil sector more accessible to foreign oil companies is drawing praise from members of the international business community.
According to the draft bill, the state-owned Sonatrach oil company will no longer operate as both the industry regulator and a business partner.
Instead, a neutral regulatory authority will be created to formulate and enforce technical and environmental regulations, and another entity will be created to award exploration and production contracts through international tenders. Effectively, this will end Sonatrach's monopoly on the domestic market.
The draft hydrocarbon law is a key component of the current Algerian government’s program to transforming the country’s once socialist economy into one that is managed by market forces.
The draft law drew praise last week from foreign business executives who were in Algeria to attend an international conference on investment opportunities in Algeria's energy and mining sectors.
“[The law] will be viewed favorably by the banking and international financial markets," said Matthew Irwin, a vice-president at Deutsche Bank AG, speaking to the Reuters news agency.
But the draft law is likely to run into firm resistance from the country’s labor unions, who are keen prevent foreign concerns from gaining sovereignty over national resources.
To date, the unions have not rule out the possibility of their going on strike to block the laws passage through the parliament.
Algeria's existing hydrocarbon deposits are estimated to equal about 10 billion barrels. The government envisages that $21 billion will be invested in to the sector over the coming five years. – (Albawaba-MEBG)
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