Law No. 19-13 – Law governing hydrocarbon activities
Law No. 19-13 covers all matters pertaining to oil and gas activities within Algeria, including abandonment, flaring, and environmental issues, superseding Law No. 05-07. This regulation maintains the regulatory roles of the National Agency for the Valorisation of Hydrocarbon Resources (ALNAFT), the Hydrocarbon Regulatory Authority and Sonatrech (the National Oil Company), with some changes related to the contractual framework used for titles granted by ALNAFT. Contracts concluded under the previous laws, in particular Laws 86-14 and 05-07, remain in effect in compliance with their provisions, but may not be extended or renewed beyond the initial contract period. However, requirements of the Law No. 19-13 related to health, security, and environment issues, as well as provisions related to decommissioning and restoration of oil production sites, apply to previously signed contracts.
It further states that the exercise of hydrocarbon activities must respect obligations relating to: the safety and health of persons; environmental protection; the rational use of natural resources and energy; among others. Moreover, the regulation has stipulations with regards to local content, minimal participation rates for the national oil company, and requirements for the use of best practices to prevent any risk or damage to people, to property, facilities and the environment. It builds upon taxes and royalty provisions, specifying that the following are excluded from the calculation of royalties (if in accordance with the development plan approved): hydrocarbons consumed for production needs; those lost, without negligence, before the point of measurement; and those reinjected into reservoirs.
The law maintains the requirement of conducting an environmental impact assessment in order to request an operation license for oil and gas developments, which is subject to the approval of the competent authority. It also charges ARH with the implementation of a estimation and reporting system concerning greenhouse gas emissions of the oil and gas sector.
With regards to methane, there are no specific limitations on emissions nor reporting requirements. Nonetheless, Law No. 19-13 maintains the prohibition on flaring and venting without a specific derogation, listing pertaining exemptions. Just as in the previous law, where a specific derogation is granted, a non-deductible flaring tax applies unless the activity falls under an exemption case. The rate has been increased to DZD 12,000 per thousand cubic metres, subject to annual revision based on the Algerian Consumer Price Index (CPI).
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