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Algeria is amending its energy law in a bid to attract foreign investment into its oil and gas industry, months after international majors suspended talks about new projects amid mass protests in the OPEC member.
The upper house of Algeria’s Parliament passed a new energy law on Thursday, which lawmakers say will boost Algeria’s chances to compete for foreign investment in the oil and gas sector.
The new bill—which has yet to be signed into law by interim president Abdelkader Bensalah—cuts red tape and includes tax incentives. The bill also introduces new types of contracts in the oil and gas sector, including production sharing, participation, and risk services contracts.
Bensalah took over as interim president in April after Algeria’s President of 20 years, Abdelaziz Bouteflika, stepped down following weeks of nationwide protests. Algeria will hold an election on December 12 to elect a new president. According to Reuters, it is not clear yet if the interim president Bensalah will wait for after the elections to sign the energy bill into law.
Algeria’s new hydrocarbon bill sparked protests earlier this year, with protesters fearing that international oil majors will take over the country’s oil and gas resources.
Protests have been the highlight of Algeria’s politics this year, and those demonstrations further scared off international majors. Even after Bouteflika’s resignation in April, Algerians continued their protests, demanding the ruling elite to step down.
Algeria’s oil and gas future looks uncertain amid the political crisis as state-run oil company Sonatrach is once again under scrutiny for alleged corruption and as major international oil companies suspended talks on projects in the country.
Oil majors are reeling from the crisis in Algeria that first saw Exxon halt its prospective shale ambitions, and has spread to major trading houses.
Earlier this year, Sonatrach shuttered plans for a trading joint venture just as it was about to choose a partner from among trading giants Vitol, Gunvor, French Total, and Italian Eni.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.