New Algerian Hydrocarbons law comes into effect

Changes in the new text should  benefit  investors who are expected to participate in the exploration of mining and renewal of hydrocarbon reserves. The tax benefits  especially refer to mining and non conventional hydrocarbons.The process called fracking for shale gas has some environmental ramifications and contracts will be subject to approval by the Council of Ministers according to the Algerian dailynewspaper El Watan.
 

The role of the regulatory hydrocarbons authority (ARH) is clarified  in the exploitation of shale oil and gas. Thus, according to Article 13, "the regulator of oil is responsible for hydrocarbon activities governed by this Act, including ensuring compliance.

A key change in the new hydrocarbons law is the revision of the methodology for determining the tax rate on oil revenues (TRP)  which is now based on the project's profitability instead of sales.The gross profit is defined as the value of the annual production of hydrocarbons less operating costs and the payments already made other taxes. The rate of TPR varies from 20 to 70% for the production perimeters daily maximum is less than 50,000 barrels / day.
 

For non-conventional hydrocarbons, the rate of TPR varies from 10 to 40% depending on the level of profitability. The rate of the additional tax on income (ICR) is 19%. But it can reach 80% depending on the size of the deposit and the production of the profit. Algerian reserves of shale gas are estimated at 600 trillion cubic meters, four times the level of its current gas reserves. In 2011, Sonatrach drilled its first shale gas wells in the basin of Ahnet, south of In Salah.