Chevron, Sonatrach sign MoU for Algerian hydrocarbon development

Chevron has signed a memorandum of understanding with Sonatrach to initiate joint discussions on exploration, development, and exploitation of hydrocarbons in Algeria following the promulgation of the new Algerian Hydrocarbons Law.

 

The new law is aimed at stimulating foreign investment in Algeria’s oil and gas sector. The law has abolished value-added tax on professional activities within the oil and gas sector, exempts imported goods, equipment, material and products used in exploration activities and/or the exploitation of hydrocarbon fields from all customs duties, taxes and other charges.

 

Foreign workers in the refining and petrochemical fields will be exempted from social security tax, provided they continue to contribute to a social security fund in their country of origin.

 

Under the law, the duration of a hydrocarbon contract includes a 30-year exploration and exploitation period and may be extended for a maximum period of ten years. The oil and gas supply chain must include provisions that give preference to Algerian companies for the supply of goods and services produced in Algeria, subject to their competitiveness.

 

The law reintroduces production sharing agreements and reduces the complexity of the previous petroleum framework by simplifying the structure of the fiscal terms.

 

Sonatrach must continue to hold a 51% stake.

 

Source: Oil & Gas Journal