French oil giant Total and Algeria’s National Hydrocarbons company Sonatrach are at loggerheads over the tax system.
Algeria: Sonatrach and Total in court over additional tax on oil profits
The bone of contention has been the change of profit sharing terms on oil and gas contracts profits made by foreign companies which the Algerian government introduced since 2006.
The provisions had stipulated that whenever a barrel exceeds 30 US dollars, the foreign petrol companies should pay an additional tax which varies between 5 and 50 percent of the production value.
French company Total is requesting reparation after close to a decade. Total wants to recover almost 500 million dollars which it says has been paid into the Algerian treasury.
The case has been brought before the International Court for Arbitration.
Algerian oil company Sonatrach has announced its readiness to defend itself before the court.
According to Sonatrach officials, they received 200 million instead of the 500 million dollars claimed by French Company, Total.
Algeria says it is still open for negotiations even though Total officials insist all efforts to arrive at a mutual agreement were futile.