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Algeria Sees Energy Law Amendment by End of 2018

Source: Reuters 10/16/2017, Location: Africa

Algeria aims to amend its energy law in 2018 as it plans to improve contract terms to attract needed foreign investment, authorities said on Monday, giving the first timeline for a much-anticipated move.

OPEC member and gas supplier Algeria relies heavily on energy revenues to balance state finances, which have been hit significantly by a drop in global oil prices and stagnation in domestic output of oil and gas.

“Work has started. The first draft will be ready by May-June,” Energy Minister Mustapha Guitouni told reporters, referring to government plans to amend the law.

“We need time to prepare a good law. This law will come at the right time.”

Guitouni was speaking on the sidelines of a conference organised by state energy agency ALNAFT, which is in charge of launching bid rounds and concluding contracts with foreign firms.

Asked whether amendments would be finalised by the end of next year, ALNAFT chief Arezki Hocini said: “We hope so.”

Foreign energy firms have mostly stayed away in recent years, complaining about bureaucracy and tough contract terms.

Algeria awarded only four of 31 oil and gas field blocks on offer to foreign consortiums in 2014. In 2011, it secured bids for just two fields out of 10.

The government has started consultations with foreign partners in an attempt to improve the investment climate and remove hurdles to investment, Guitouni said.

“We want to strengthen ties with our partners. It is necessary to be flexible,” he said.

The minister did not give details on the planned amendments but said the law would provide tax incentives and alleviate administrative proceedings.

“We are determined to wage war on bureaucracy,” he said.

Preparation for the amendment coincides with government plans to develop unconventional energy sources including shale gas to boost output and cope with growing domestic consumption, which has dented export volumes.

“We need at least five to 10 years to highlight shale gas,” Guitouni said.

Algeria has no experience in developing shale gas and is seeking foreign partners with expertise.

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