Upstream terms in Algeria will remain tough, even if the latest amendments meet international oil companies’ (IOCs’) most optimistic hopes – which, truth be told, aren’t particularly high. But firms can cope with tough terms and factor them into their decision to invest. Much more difficult for international investors is budgeting for the two-three year project delays which have become normal, even good going, in Algeria.
All but the largest independent firms cannot afford to tie up hundreds of millions of dollars in a project if it may take ten years or more to bring (in theory) commercial discoveries to market. Whilst tweaks to contractual terms are welcome, streamlining the decision-making process will do much more to increase Algeria’s attractiveness, IOC representatives say. (CONTINUED - 2043 WORDS)