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Maersk Oil settles Algerian tax claims

Monday, Mar 12, 2012

Mærsk Olie, Algeriet A/S (Maersk Oil), a 100% owned subsidiary in the A.P Moller – Maersk Group, has since 1990 been a partner in several blocks in Algeria under a production sharing contract  (PSC) with Anadarko, Eni and the Algerian national oil company, Sonatrach S.P.A.

In August 2006 an Algerian tax, “Taxe sur les profits exceptionnels” (TPE), was introduced by law. The law imposed a new tax on revenue. Anadarko and Maersk Oil argued that the collection of the TPE by Sonatrach from its share of the oil production due to them under the PSC was a breach of that contract that should be compensated. Taxes have been collected by Sonatrach under the disputed law.

The parties have now settled the dispute. The settlement is subject to approval by Algerian competent authorities which is expected within 4 months (the effective date).

The settlement, based on reciprocal concessions, provides for delivery to Maersk Oil of additional crude oil volumes in the amount of approximately USD 920 million over a period of 12 months from the effective date. Further, the effect of the improved terms of the PSC will moderately increase Maersk Oil’s share of oil production from the effective date and for the remaining term of the PSC.

“This settlement is significant for us and our Algerian business. The parties have agreed on how to resolve and settle all outstanding claims related to this tax. Following this agreement, we have a solid basis for moving ahead with our Algerian activities together with our partners,” said Jakob Thomasen, Chief Executive Officer of Maersk Oil.

Source: Maersk Oil

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