(Adds more details from CEO, background)
ALGIERS, Sept 18 (Reuters) - Algeria needs to change the laws governing its oil and gas industry to attract foreign oil investors, the chief of the country’s state-run Sonatrach energy company said on Monday.
Sonatrach CEO Abdelmoumen Ould Kaddour’s comments were a clear call for reforms which could help Algeria to increase production and offset a fall in global oil prices that has sharply reduced its energy revenues.
“We are talking to the government to make it more attractive for investment, I understand that taxes, and exploration legal framework, need to be changed,” he told reporters.
He also said ENI and Total were currently in negotiations over large projects, including in field output optimisation, petrochemicals and solar energy at oil and gas fields.
Any move to amend Algeria’s existing hydrocarbon framework would be a major shift and changing the law could face resistance from an old guard wary of ending nationalist policies established under President Abdelaziz Bouteflika.
Last year, Algeria, a major gas supplier for Europe, held talks with European Union officials and companies to discuss how to improve investment and guarantee Algeria’s gas supplies after several years of stagnant production.
Some foreign energy companies have balked at investing in Algeria, where tough contract terms, bureaucratic delays and security concerns have made investors unenthusiastic, especially after low oil prices made some projects financially unviable.
More recently though, Sonatrach has taken a more flexible approach with foreign companies, entering into more bilateral negotiations rather than holding bidding rounds as a way to draw investors back to its oil and gasfields.
Algeria expects its gas exports to reach 57 billion cubic metres (bcm) this year, up from 54 bcm in 2016. Its output rose to 132.2 bcm in 2016 from 128.3 bcm the previous year.
Analysts have often questioned Algeria’s energy policies given the quick turnover at Sonatrach management and the oil ministry. Before Ould Kaddour, the former CEO was in place for two years and Sonatrach had five CEOs in five years before that.
“I want a strategy for Sonatrach, it never had a strategy before. I will publish shortly what I called Sonatrach 2030, a plan that will show the way for the next decade,” the Sonatrach chief said. (Writing by Patrick Markey. Editing by Jane Merriman)
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