Energy Minister Chakib Khelil defended Algeria's new tax on hydrocarbon profits on Wednesday, telling international executives that their companies have been earning "excessively" high returns because of rising oil prices.
Khelil was briefing executives on amendments to Algeria's hydrocarbons law that were approved earlier this year, which include a 5-50 percent tax on profits made while the oil price remains over US$30 a barrel.
Questioned by one executive on whether the tax breached existing contracts, Khelil defended the measure, saying that the "rate of return is now excessively much larger than it was expected to be" at the time some contracts were signed.
Khelil compared the tax to measures taken in other countries to skim off more energy profits for the state. He cited energy nationalization in Bolivia as another example "where the state and the people consider that the deal is not fair anymore."
Crude oil prices dipped to US$59.94 a barrel early Wednesday after news of temporary supply disruptions Tuesday had caused the price to jump to more than US$60 a barrel.
(AFX, 22/11/2006)