09 March 2012, Sweetcrude, ALGIERS – US oil firm, Anadarko Petroleum, and Denmark’s Maersk Oil say they have settled a long-standing tax dispute with the Algerian government.
The dispute arose from a tax imposed by the Algerian government in 2006 on the two companies’ shares from oil production, which the duo, partners with Italy’s Eni and state-owned Sonatrach on several Algerian blocks, challenged as a breach of their production sharing contracts (PSC). They, therefore, asked for compensation as a result of complying with the tax.
The companies said, Friday, that following the resolution of the dispute, they have been awarded additional oil volumes from the country’s oil production.
Under the settlement with Sonatrach announced on Friday, Anadarko will gain crude supplies worth $1.8 billion over the next 12 months while its PSC with Algeria will be amended to give it a discount on produced oil worth about $2.6 billion over the life of the contract.
On the otherhand, Maersk, would receive $920 million worth of oil output while its PSC terms will also be improved to increase its share of oil production.
Speaking on the development, Maersk chief executive officer, Jakob Thomasen, said: “This settlement is significant for us and our Algerian business.”
He added that as a result of the deal, his company has a solid basis for moving ahead with our Algerian activities together with our partners.
The settlement, based on reciprocal concessions, is subject to approval by the Algerian authorities, which is expected by the summer.
