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Sonatrach Aims To Reform Algiers Energy Laws

Algeria

Algerian oil and gas laws need an upgrade if it is to attract foreign investors, according to the North African country’s government petroleum company, Sonatrach.

Sonatrach CEO Abdelmoumen Ould Kaddour told reporters that the current legal framework needs updating and strengthening for it to be a suitable competitive international energy environment.

“We are talking to the government to make it more attractive for investment, I understand that taxes, and exploration legal framework, need to be changed,” he said.

Italian Eni and French Total are in advanced stages of talks with Algiers to take over large projects in several fields of operation, including optimization, petrochemicals, and solar energy development.

President Abdelaziz Bouteflika established nationalist policies to keep oil profits close to Algiers. In turn, the capital used the money to hire the populace for public works projects and national mineral and fossil fuel companies. These efforts were based on an aged legal framework that does not represent the realities of today’s oil markets.

In 2016, Algiers furthered talks with the European Union for renewed gas infrastructure investment, which would potentially give the continent an alternative to Russian gas supplies. But investing in Algeria is a tricky game. Bureaucratic delays and security concerns are red flags for bigwigs in the oil and gas sector.

In order to capture the interest of companies most reluctant to work in Algeria, the country has begun to enter bilateral negotiations, instead of putting out tenders for bidding regarding major projects.

Related: Oil Price Volatility Is Set To Return

“I want a strategy for Sonatrach, it never had a strategy before. I will publish shortly what I called Sonatrach 2030, a plan that will show the way for the next decade,” the Sonatrach chief said.

Much of the ongoing policy efforts in Algeria have been the brainchildren of Bouteflika’s closest advisors, who have taken over the leadership role for the president since he suffered a stroke a few years ago. 

By Zainab Calcuttawala for Oilprice.com

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