Country Report

Algeria upstream fiscal summary

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28 January 2020

Algeria upstream fiscal summary

Report summary

The 2019 hydrocarbon law gives contractors the flexibility to choose between participation contract (concession), production sharing or risk service contract terms. The 2019 hydrocarbon law provides details of the fiscal terms for participation contracts. There is less clarity on the production sharing and risk service contract terms, hence the model used in our analysis uses the 2019 participation contract terms. The participation contract is a royalty/tax system with an additional profits tax called the Hydrocarbon Tax. The contract includes a royalty rate of 10%. The Hydrocarbon Tax is linked to project profitability and can vary between 10% and 50%. Corporate income tax is levied at 30%. Sonatrach, the national oil company, has the option to take a 51% equity share in all participation contracts. The contractor will carry Sonatrach through the exploration phase. Sonatrach will reimburse the contractor from the start of production.

Table of contents

  • Basis
  • Licence terms
  • Government equity participation
    • Bonuses, rentals and fees
    • Indirect Taxes
    • Royalty
    • Ring fencing
    • Base
    • Rate
    • Payment schedule
    • Hydrocarbon Tax
    • Ring fencing
    • Base
    • Rate
    • Payment schedule
    • Corporate Income Tax
    • Ring fencing
    • Base
    • Rate
    • Payment schedule
    • Fiscal treatment of decommissioning
    • Product Pricing
    • Summary of modelled terms
  • Recent history of fiscal changes
  • Stability Provisions
  • Split of the barrel and share of profit
  • Effective royalty rate and maximum government share
  • Progressivity
  • Fiscal deterrence

Tables and charts

This report includes 17 images and tables including:

  • Timeline
  • Timeline detail
  • Split of the barrel - oil
  • Split of the barrel - gas
  • Share of profit - oil
  • Share of profit - gas
  • Effective royalty rate - onshore and shelf, oil and gas
  • Maximum government share - onshore and shelf, oil and gas
  • State share versus Pre-Share IRR - oil
  • State share versus Pre-Share IRR - gas
  • Investor IRR versus Pre-Share IRR - oil
  • Investor IRR versus Pre-Share IRR - gas
  • Bonuses, rentals and fees
  • Indirect Taxes
  • Hydrocarbon tax rates
  • Hydrocarbon tax rates

What's included

This report contains:

  • Document

    Algeria upstream fiscal summary

    PDF 920.80 KB