Algeria moving forward with oil windfall profits tax

Oct. 16, 2006
Algerian Energy Minster Chakib Khelil told reporters in Algiers this weekend that he has received no comment from international oil companies regarding a windfall profits oil tax slated to take effect next year.

By OGJ editors
HOUSTON, Oct. 16 -- Algerian Energy Minster Chakib Khelil told reporters in Algiers this weekend that he has received no comment from international oil companies regarding a windfall profits oil tax slated to take effect next year.

The windfall profits tax was part of a law enacted during September. The same law provides state-owned oil firm Sonatrach to take a 51% interest in contracts involving IOCs.

Companies from outside Algeria will have to pay the oil tax in any month when the price of Brent crude averages above $30/bbl. The tax rate will vary 5-50%, depending on a company's total production.

Anadarko Petroleum Corp., Royal Dutch Shell PLC, BHP Billiton, ENI SPA, and Hess Corp. all have oil operations in Algeria. No comment was immediately available from any of those companies.

Analysts said the companies await an explanation regarding how the tax rate will be set.