standardized, predefined contracts and open for the opportunity to negotiate contracts
and propose modifications.
c.
Improved fiscal system: Develop a stable fiscal regime which provides long term
security and protection of investments. The petroleum tax system should be adapted
to a low oil price environment and offer softer terms in the petroleum fiscal regime.
Importantly, the reference price used for calculation of royalties and petroleum tax
should be reflective of real revenues and contractual flows of gas. For clarity, Statoil
believes the reference price that should apply is the realized export price achieved by
the exporters. Any other reference price which does not reflect the realized price will
create prejudice and losses to IOCs and may create potential undesired conflicts. In
case natural gas is sold back to Sonatrach, the sales price to Sonatrach should be as
the fiscal reference price.
3.
GHG emission reductions: In the global fight against climate change it matters how oil and
gas is produced and Algeria must take steps to continue reducing emissions from its
hydrocarbons industry. Funds could be made available for resuming Co2 sequestration
activities which have been halted due to capital constraints stemming from oil price downfalls.
The Krechba field in In Salah stands as a strong candidate for resuming Co2 reinjection.
4.
Efficiency, transparency and predictability of energy sector governance: Faster,
transparent and predictable decision processes in the energy sector is needed. More clarity is
required on delegated responsibilities and empowered employees within Sonatrach to ensure
smooth and cost-efficient operation of joint ventures. Interactions between petroleum operators
and the Algerian administration should also become more reliable and less costly. Most notably,
this applies to issues which do not involve the Energy Ministry, such as safety, labor law,
payment in foreign currencies, telecom licenses and customs.
In addition, the EU should work with Algeria for better
integration of their respective energy
markets. The sharing of best market design practices through the EU-Algeria energy partnership
should be stepped up.
Security threats remain a challenge in Algeria. Instability in Libya, Niger and Mali and proximity
of producing oil and gas assets to the borders of these countries makes Algeria, its people and
facilities vulnerable to regional threats. In this regard, the Algerian military with its professionalism,
equipment and experience in combatting terrorism is an important “exporter” of security in the
region. The Algerian military should also be commended for ensuring that there have been no AQIM
led attacks on oil and gas facilities since the March 2016 firing of explosive munitions on Krechba
– part of the In Salah gas scheme.
Since the 2013 terrorist attack on Tiguentourine (In Amenas) where Statoil lost five of its employees,
we have taken vigorous measures to ensure the safety of our people and operations. We are
engaged in a high-level security dialogue with different Algerian stakeholders, we continue to
implement our security enhancement project and push for approval from authorities to install long
range surveillance and detection systems, such as thermal cameras and ground radar.
Given the priority that investors give to security, the EU and Algeria should continue its high-level
dialogue on regional security and fight against terrorism. Efforts from both sides must also ensure
that the mechanism for security consultations becomes a success.
Security Classification: Restricted - Status: Draft
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