(Reuters) - Anadarko Petroleum Corp (APC.N) said on Friday it had reached a settlement in a long-running tax dispute with Algeria that will deliver about $4.4 billion in oil to the company in the coming years, sending its shares higher.
The settlement with state-run oil company Sonatrach is expected to win approval from Algerian government authorities within the next four months, Anadarko said.
The dispute centered on Algeria’s 2006 law that raised taxes on oil profits in the country.
Anadarko, the biggest foreign oil producer in Algeria with projects that produced 345,000 barrels per day in the fourth quarter, objected to the measure, and said its existing contracts there required Sonatrach to pay the taxes.
Upon the settlement’s approval, Anadarko said all arbitration proceedings between the parties will be dismissed.
Under the terms of the settlement, Algeria will supply Anadarko with $1.8 billion in crude oil over the next 12 months.
In addition, Anadarko and Algeria extended their existing production sharing agreement to provide Anadarko with a higher volume of oil that is worth about $2.6 billion over the life of the contract.
Shares in Anadarko jumped 3.8 percent in premarket trading to $86.77 per share.
Reporting By Matt Daily; Editing by Gerald E. McCormick, Phil Berlowitz