| ALGIERS, April 11
ALGIERS, April 11 Algeria could change its
hydrocarbons law to boost energy partnerships with foreign firms
and draw more investment into its oil and gas sector, Energy
Minister Nourredine Bouterfa said in a statement on Tuesday.
Any move to amend its law -- criticised by some oil
companies as too tough -- would be a major shift as Algeria
looks to boost production. But changing the law may face
resistance from the country's political old guard wary of ending
more nationalist policies.
A key gas supplier to Europe, Algeria has managed over the
last year to reverse stagnant production and increase oil and
gas output, bringing new fields online and getting better yield
from mature fields.
But new exploration for longer-term output will need more
foreign investment just as Algeria is juggling reforms to help
offset the sharp slide in global crude prices that have slashed
the government's energy revenues.
"We have engaged a dialogue with oil firms to shed light on
their understanding of our laws, including their apprehensions
with regard to taxes and to bring the necessary corrections so
we can boost the development of our partnership and make our
country more attractive," Bouterfa said in a statement to EU
officials in Brussels.
Bouterfa was speaking during a visit to discuss deepening
energy cooperation with the European Union. Algeria, E.U.
officials and oil companies have been in dialogue for a year
over how to improve energy ties.
Algeria's energy legal framework and taxes have been seen by
foreign oil and gas firms as a hurdle to more partnership. But
the law is only one barrier. Oil firms say bureaucracy and
delayed projects are others.
In 2013, Algeria amended its law offering incentives to
foreign companies in unconventional resources such as shale and
linking taxes on partners of state energy firm Sonatrach to
profit instead of turnover.
But that was not enough to entice companies to subsequent
energy bidding rounds, where investors saw little on offer and a
lack of transparency in data on the fields. Since then Sonatrach
has adopted a more flexible approach dealing with companies on a
bilateral basis and abandoning public bids.
The minister's statement also told EU energy decision makers
that "growth of output mainly natural gas will continue in a
sustained way for the medium term and beyond."
Algeria is the third gas supplier to the Europe Union after
Russia and Norway, covering 55 percent of Spain's gas energy
needs in 2016, 16 percent of Italy's and 15 percent of
Algeria exported 54 billion cubic metres in 2016, and it
will export more than 57 billion cubic metres in 2017, according
(Editing by Patrick Markey and Susan Thomas)