Sonatrach issued the following announcement on Nov. 4.

Energy officials have warned Sunday in Algiers against a structural energy crisis looming in 2030 due to a reduction in the country's energy supply against a strong internal rise , saying that the new law on hydrocarbons is likely to spare the country this crisis.

"Studies show that by 2030, Algeria will experience a structural deficit between energy supply and demand, which may prevent it from meeting local demand for energy," said Hakkar Toufik, chief of energy. working group, responsible for the drafting of the draft law on hydrocarbons, during a study day organized by the parliamentary group of the National Liberation Front (FLN) on the two draft laws on hydrocarbons and Finance 2020, in the presence of several officials and experts, chaired by Mr. Khaled Bouriah, chairman of the group, and Mr. Arghib Ferhat, vice-president of the National People's Congress (NPC).

Algeria could face, from 2025, "to a severe reduction of its receipts in currency because of the decline of the hydrocarbons exports", foresees the person in charge who affirms, also, that the examination of this text at this moment is only a "coincidence", recalling that the drafting of this bill had begun several years ago.

In order to cope with this situation, "it has become more than necessary for the country to adopt this bill," he said.

The same manager also indicated that the average period between the signing of the exploration contract and the extraction of the first quantities of oil or gas under the same contract was ten (10) years, which makes "Unjustifiable" any delay in the promulgation of this text, which introduced an incentive tax system to foreign partners.

In order to dispel any fear of national sovereignty, Mr. Hakkar asserted that "the latter is inscribed within the framework of this law and enshrined in the Constitution".

The provisions of the draft law do not apply to agreements signed so far, but on new agreements to be concluded from the moment the law is adopted by Parliament, he explained.

For his part, the director of hydrocarbons at the Ministry of Energy, Mustapha Hanifi said that the use of the new law on hydrocarbons "is not a choice but an imperative dictated by the failure of the regulations in force" , deeming it "irresponsible to ask for his postponement".

SONATRACH has realized, in recent years, some 150 new oil exploitations which have not been explored because of the lack of yield and given the big risks that they can incur to this company which requires about 2 billion Usd annually as investment Upstream, he said again.

Not exceeding 30%, the rate of return in the extraction activity is qualified as low, since on the 100 wells, there is oil that in 30 wells per average, said Mr. Hanifi.

Referring to shale gas , the representative of the Ministry of Energy explained that "the exploitation of this type of gas can not take place in the absence of the necessary technological, economic and environmental conditions".

Fatiha Neffah, head of SONATRACH, said that the revision of the tax system governing hydrocarbons has become more than a necessity today because of the reluctance noted towards this sector since the amendment of this law in 1986.

The bill does not highlight any "tax concession" for the benefit of foreign investors, it rather proposes a reduction in the tax burden, or even a facilitation of taxation and their adaptation to the system in force around the world.

Referring to the exemption of SONATRACH partners from the tax on professional activity (TAP), Ms. Neffah explained that the shortfall would not be felt by the Treasury if this tax was to be repealed, especially as this Exemption exists from the outset in the current law.

The bill will encourage Algeria to penetrate the exploration of Offshore

As far as offshore investment is concerned, Hacini Arezki, Acting Chairman of the Alnaft Agency Administration Committee, said the penetration of this mining area, which covers an area of 100,000 square kilometers, financial resources that SONATRACH alone can not commit, because the cost of exploration at sea is seven times higher than the cost of onshore exploration.

The new bill and the incentive benefits it grants to foreign partners will encourage investors to invest in this area, allowing Algeria to know its potential in this area.

Responding to a question about allowing foreign partners to resort to international arbitration in the event of a dispute, the same official said that it is impossible to drain partners without allowing them to resort to this arbitration.

During their interventions, the representatives of SONATRACH affirmed that the company possesses a great expertise in this field which allowed him to win many cases of litigation in the international tribunals.

During the debate, MP Abdelsamad Al Ouardi said that the bill will encourage exploration because it is simply a "logical and necessary return" to the Hydrocarbons Act of 1986.

For Mr. Al Ouardi, the party of the National Liberation Front (FLN), through representatives in successive governments, had always been with Law n 86-14, claiming that national sovereignty is immune in the framework of this project. that alleviates the tax burden on SONATRACH and its partners.

MP Moussaoudja Mohammed wondered whether the depletion of Algeria's reserves of hydrocarbons will directly lead to the acceleration of shale gas exploitation, given that most of the traditional reserves are retained in the rocks, sharing its fears about the impact of this exploitation on the environment.

In turn, Toumi Azzedine questioned the potential of Algeria for the exploration of "Offshore" gas, expressing in this regard his fears concerning the exploitation of shale gas and the repercussions at all times. plans.

Questioning the reason why foreigners are allowed to resort to international arbitration in case of disputes between SONATRACH and a partner, the same MP believes that this arbitration "is not in the service of Algeria", before to express its concerns about the effectiveness of the bill with the current political situation.

MP Houifi Karima spoke about the conditions for subcontracting contracts in the field of hydrocarbons and how to select domestic and foreign subcontractors, before questioning the effectiveness of the dispensation SONATRACH's partners of the TAP as part of the bill.

MEPs will be debating the hydrocarbons bill in plenary sessions from next Tuesday.

Then, the FLN parliamentary group proceeded to the examination of the draft law of finance by an intervention of the deputy and member of the commission of the finances and the budget of the NPC, Ahmed Zeghdar on the main procedures envisaged in this project of text.

Welcoming the majority of the procedures contained in the draft law, including the preservation of the social character of the state, the strengthening of the ordinary tax system and the support of startups, Mr. Zeghdar raised some articles to enrich as those concerning the property tax, the non-resident tax and the vehicle pollution tax.

The parliamentary group also listened to a presentation by economist Kamel Rezik on the bill, calling on MEPs to introduce amendments to or cancel certain articles.

These are the property tax, the new vehicle tax and the non-resident tax.

During the debate, MP Ilyes Saadi referred to Article 104 of the PLF 2020 on the deletion of Rule 51-49 for non-strategic sectors calling on his colleagues to introduce an article defining the list of sectors.

The deputies will proceed to the examination of the finance bill at the plenary sessions from next Wednesday (APS).

Original source: https://sonatrach.com/actualites/hydrocarbures-le-projet-de-loi-epargnera-a-lalgerie-une-crise-energetique-aps