Algeria to create windfall tax on foreign firms

Algiers: A tax on windfall foreign oil company profits could earn Algeria $1 billion in 2007, a move that is both fair and politically necessary in view of high prices, the country told energy multinationals.

Energy and Mines Minister Chakib Khelil told a candid open meeting with foreign executives and reporters the government had decided the details of the tax and would publish them shortly ahead of a new oil exploration round planned for next year.

Challenged by Anadarko Vice President for International Operations Dick Holmes, who said the tax could affect the sanctity of his contract with Algeria, Khelil said the measure was both fair and politically savvy.

“The tax on exceptional profits is not an injustice but the re-establishment of justice in view of the quadrupling of the price of the barrel,” Khelil said.

Reuters