Sonatrach issued the following announcement on Oct. 14.

The draft law on hydrocarbons, adopted Sunday by the Council of Ministers, is a legal framework for the development of investment in the entire energy sector, including mining, making it more attractive to the eyes of the public. foreign partners.

A review of the hydrocarbon legal regime, particularly in terms of contracts and taxes, was necessary in view of the drop in production (gas and oil) that Algeria has recorded in recent years, as well as the increasing increase in consumption. national.

It is important to remember from the communiqué of the Council of Ministers that the maintenance of the current legal regime will put Algeria in a situation of "structural deficit between the national supply and demand from 2025".

To avoid this, the new provisions contained in the future law on hydrocarbons will strengthen the economic, financial and technical role of the company, SONATRACH, being the only national party signatory of oil contracts with investors and to assert its monopoly on pipeline transport activity.

In order to preserve national interest and sovereignty, the so-called 51/49% rule, governing foreign investment in Algeria, has been maintained for "all contracts, national wealth being the property of the national collectivity". 'it should be exploited to its advantage, in an optimal way'. While this same rule was lifted for nonhydrocarbon sectors, considered non-strategic.

A "great interest" is given by the bill to health, safety and the environment as part of the "respect" of the principles of sustainable development.

There is also a question, through this new legal framework, of expanding offshore operations, an activity in which Algeria is starting and needs partners with the experience, financial resources and technologies required.

The partnership allows Algeria to share the risks associated with the prospecting operations that SONATRACH alone is currently undertaking, to renew its reserves and to revive the production activities, which will contribute to the preservation of its energy security and the continuation of the realization of economic development projects.

60% of contract gas reserves are exhausted

During his visit last Sunday to the forum of the daily El Moudjahid, the director general of hydrocarbons at the Ministry of Energy, Mustapha Hanifi, said that Algeria must achieve new discoveries of oil and gas to ensure its safety and its revenues, notably through the foreign partnership.

According to him, to achieve new gas and oil discoveries requires the establishment of an adequate legal framework hence the advantage of the bill recently adopted by the Council of Ministers.

Wanting to be more convincing, he said that the national production profile was experiencing a "downtrend", knowing that the Hassi R'mel field, totaling half of the national production, is at "his third boosting", techniques to support the production of an aging oil field but for a limited period.

Moreover, according to the ministry's representative, "60% of Algeria's gas reserves under contract are exhausted", even though, he said, the country has "extremely important" potential.

As a reminder, the Minister of Energy, Mohamed Arkab had explained that the draft law on hydrocarbons is the fruit of study started in 2017, through an enlarged commission, chaired by the Minister of the sector and enriched by experts and several national skills.

It is characterized, according to Mr. Arkab, by a "flexibility" to attract foreign investors mastering the technologies and having the financial resources to invest in Algeria in partnership with SONATRACH.

In this regard, he recalled that out of a total of 67 exploration sites, subject to international tenders since 2005, only 19 tenders and 13 signed contracts (APS) have so far been registered.

Original source: https://sonatrach.com/actualites/le-projet-de-loi-sur-les-hydrocarbures-un-cadre-juridique-en-faveur-de-linvestissement