Speaking in Brussels on 11 April the Energy Minister, Noureddine Bouterfa, said that Algeria could amend its Hydrocarbons Law to boost energy partnerships with foreign firms and attract more investment in the oil and gas sector.

The current Hydrocarbons law has been widely criticised by IOCs as being too tough. Its amendment would be a major shift in Algerian policy as it seeks to increase production. The difficulty facing the many Algerian ministers and businessmen who want to change the Hydrocarbons law, is the opposition from the country’s political old guard, which is still powerful and wary of ending Algeria’s nationalist policies.

Over the last year, Algeria has managed to: reverse stagnant production and increase oil and gas output; bring new fields on-stream; and enhance production in the more mature fields. The International Energy Agency (IEA) amongst others is, however, dubious about whether this upturn is more than a blip.

While it is recognised that new exploration to increase production will require more foreign investment, it is also acknowledged that IOCs are unlikely to make such investments without major amendments to the Hydrocarbons Law. They also want to see less bureaucracy and delays to projects.

Bouterfa was quoted as saying: ‘We have engaged in dialogue with oil firms to shed light on their understanding of our laws, including their apprehensions with regard to taxes and to bring the necessary corrections so we can boost the development of our partnership and make our country more attractive.’

Sonatrach now appears to be adopting a more flexible approach to the IOCs and the recent changes at the top of both Sonatrach and ALNAFT may accelerate this process.

According to Sonatrach, Algeria exported 54 billion cubic metres (bcm) in 2016, and will export more than 57 bcm in 2017. Algeria is the third largest gas supplier to the European Union after Russia and Norway; and it provided 55% of Spain’s gas energy needs in 2016, as well as 16% for Italy; and 15% for Portugal.