Algeria's hydrocarbons draft law, which proposes to open the sector to foreign investment, will be reviewed without delay by the government, Energy and Mines Minister Chakib Khelil told the Organization of Petroleum Exporting Countries news agency (Opecna). After the government endorses the law, it will be presented to parliament.
First presented in late 2001, the new law will introduce free competition in both upstream and downstream activities in Algeria’s oil and gas industry. Eradicating the monopolistic position of Algeria’s state-run oil and gas company Sonatrach, the law puts the company on the same footing as any other firm, local or foreign, in bidding for exploration and development tenders on the Algerian market.
Nonetheless, the new legal framework will not affect the terms of Production Sharing Contracts (PSC) already in force between Sonatrach and foreign firms. The current law requires international companies entering the local market to set up joint ventures with Sonatrach. The draft bill would also allow Sonatrach to continue to manage the state's 43 percent share in the hydrocarbons market and grant the company concessions for existing pipeline network operations.
The hydrocarbons exports earn Algeria 96 percent of its foreign cash revenues. The country has proven oil reserves of 9.2 billion barrels, and an oil production capacity of 1.5 million barrels per day (bpd). Unlike most other OPEC members, Algeria hydrocarbons sector is relatively diversified, having been open to extensive foreign involvement since the 1980s. — (menareport.com)
© 2002 Mena Report (www.menareport.com)
