Algeria Approves Amendment to Hydrocarbons Laws

Algeria will offer foreign energy firms easier tax terms and other incentives under amendments to its hydrocarbons law passed by parliament on Monday, Reuters said.

The changes, prompted by weak interest shown in bidding for Algerian oil and gas permits in recent years, come in the wake of an attack on a gas plant where more than 60 workers and militants died.

The amendments offer incentives to foreign companies wishing to invest in unconventional resources such as shale gas and shale oil and will link taxes on partners of state energy firm Sonatrach to profit instead of turnover, Reuters added.

Algeria's last three rounds of bidding for oil and gas permits attracted lacklustre interest from foreign firms, raising questions about whether it could maintain output levels and meet growing demand.

Under Monday's amendments, investors are set to be granted prospecting licences for up to 11 years and exploitation licences of 40 years for shale gas and 30 years for shale oil.

Conventional energy licence terms remain unchanged at seven years for prospecting and 25 years for exploitation, with a five-year supplementary period for natural gas deposits.

Algeria wants to develop shale gas and offshore production to help ensure security of supply.