Wednesday, 18 April 2012

Algeria to revise tax on energy projects

Energy Minister Youcef Yousfi told El Khabar newspaper on 10 April that Algeria plans to change the way it levies tax on some energy projects. The change will mean that foreign oil companies pay tax on profits they make from the projects and not on their turnover. Yousfi was quoted as saying: "The tax imposed will be based on the profitability of the projects, not as before, based on turnover."

The promised change is to make the country more attractive to IOCs after three consecutive bid rounds for oil and gas acreage failed to attract much interest. Yousfi said, however, that the new tax mechanism would only apply to oil and gas projects that are not currently in production and are considered high risk.

The changes are included in draft amendments to the hydrocarbons law drawn up by the energy ministry. Yousfi said that a ministerial working group had finished drafting the amendments and had presented them to the government for approval. The next stage will be for parliament to vote through the amendments.

For more news and expert analysis about Algeria, please see Algeria Focus and Algeria Politics & Security.

© 2012 Menas Associates

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