Sonatrach reaches amicable agreement with the U.S. group Anadarko and Maersk of Denmark.
The National Hydrocarbons Company Sonatrach reached an amicable agreement with Anadarko Algeria Company American groups and Maersk Olie Algeri (Denmark) in their dispute over a tax that should pay for these two groups in Algeria, it was learned on Friday from Sonatrach, APS reports.
Source : https://www.marocafrik.com/english/Sonatrach-reach...
Once approved by the competent authorities, the agreement "will effectively put an end to trade-offs that have been introduced by these two companies for the purpose of challenging the levy of the tax on extraordinary income (TPE)" introduced in 2006 by Algeria by modifying the 2005 law on hydrocarbons, Sonatrach said in a statement.
This agreement was reached "on the basis of mutual concessions of the parties and without prejudice to their respective positions in arbitrations," said the Algerian group.
According to Sonatrach, "the parties agreed to amend certain provisions of the contract, including the mechanism of production sharing, which includes the commitment of partners Sonatrach to pay the TPE in accordance with current regulations." In addition, the agreement also extend to 25 years the operating life of each pool, companies engaged in advance the contract options provided for this purpose.
Anardako said in a press release : Anadarko Petroleum Corporation (NYSE: APC) today announced it has reached an agreement with Sonatrach to resolve the dispute regarding Sonatrach's implementation of Algeria's 2006 exceptional profits tax (TPE). The parties' agreement will become effective upon approval by Algerian government authorities, estimated to occur within the next four months. Upon such approval, the existing arbitration proceeding between the parties will be dismissed.
"We are very pleased to have reached a fair and balanced resolution that will return significant value to Anadarko," said Anadarko President and Chief Operating Officer Al Walker. "This amicable solution maintains our long-standing partnership with Sonatrach that has achieved tremendous success in Algeria, surpassing 1.5 billion BOE (barrels of oil equivalent) of cumulative production and advancing the El Merk mega project toward first production."
The agreement, based on reciprocal concessions, provides for delivery to Anadarko of additional crude oil volumes in the amount of approximately $1.8 billion over a period of 12 months from the effective date. Additionally, the parties have agreed to amend the existing Production Sharing Agreement (PSA) to provide that Anadarko will receive a higher volume of profit barrels. The effect of the amendment will, using current commodity prices and discounted at 10 percent, provide Anadarko with approximately $2.6 billion of additional net present value over the remaining term of the PSA. The amendment also confirms the term for each development license granted under the PSA will be extended, in accordance with the terms of the PSA, and as a result, will now be 25 years from the original effective date.
Reuters writes that Maersk Oil, the oil arm of Danish oil and shipping group A.P. Moller-Maersk , has entered into a tax settlement with Algerian Sonatrach that will see Maersk Oil receive additional oil volumes worth about $920 million."The settlement ... provides for delivery to Maersk Oil of additional crude oil volumes in the amount of approximately $920 million over a period of 12 months from the effective date," A.P. Moller-Maersk said on Friday .
In August 2006, an Algerian tax on revenue was introduced, and Anadarko and Maersk Oil have argued the collection of the tax from Algerian state-owned Sonatrach from its share of the oil production was a breach of contract that should be compensated according to Reuters.
This agreement was reached "on the basis of mutual concessions of the parties and without prejudice to their respective positions in arbitrations," said the Algerian group.
According to Sonatrach, "the parties agreed to amend certain provisions of the contract, including the mechanism of production sharing, which includes the commitment of partners Sonatrach to pay the TPE in accordance with current regulations." In addition, the agreement also extend to 25 years the operating life of each pool, companies engaged in advance the contract options provided for this purpose.
Anardako said in a press release : Anadarko Petroleum Corporation (NYSE: APC) today announced it has reached an agreement with Sonatrach to resolve the dispute regarding Sonatrach's implementation of Algeria's 2006 exceptional profits tax (TPE). The parties' agreement will become effective upon approval by Algerian government authorities, estimated to occur within the next four months. Upon such approval, the existing arbitration proceeding between the parties will be dismissed.
"We are very pleased to have reached a fair and balanced resolution that will return significant value to Anadarko," said Anadarko President and Chief Operating Officer Al Walker. "This amicable solution maintains our long-standing partnership with Sonatrach that has achieved tremendous success in Algeria, surpassing 1.5 billion BOE (barrels of oil equivalent) of cumulative production and advancing the El Merk mega project toward first production."
The agreement, based on reciprocal concessions, provides for delivery to Anadarko of additional crude oil volumes in the amount of approximately $1.8 billion over a period of 12 months from the effective date. Additionally, the parties have agreed to amend the existing Production Sharing Agreement (PSA) to provide that Anadarko will receive a higher volume of profit barrels. The effect of the amendment will, using current commodity prices and discounted at 10 percent, provide Anadarko with approximately $2.6 billion of additional net present value over the remaining term of the PSA. The amendment also confirms the term for each development license granted under the PSA will be extended, in accordance with the terms of the PSA, and as a result, will now be 25 years from the original effective date.
Reuters writes that Maersk Oil, the oil arm of Danish oil and shipping group A.P. Moller-Maersk , has entered into a tax settlement with Algerian Sonatrach that will see Maersk Oil receive additional oil volumes worth about $920 million."The settlement ... provides for delivery to Maersk Oil of additional crude oil volumes in the amount of approximately $920 million over a period of 12 months from the effective date," A.P. Moller-Maersk said on Friday .
In August 2006, an Algerian tax on revenue was introduced, and Anadarko and Maersk Oil have argued the collection of the tax from Algerian state-owned Sonatrach from its share of the oil production was a breach of contract that should be compensated according to Reuters.
Source : https://www.marocafrik.com/english/Sonatrach-reach...