Sonatrach is shifting strategy to offer foreign companies direct negotiations over 20 oil and gas fields.
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After a deep slide in oil prices, Algeria's Sonatrach is shifting strategy to offer foreign firms direct negotiations to buy stakes in 20 oil and gas fields in a bid to attract investors and increase output, a source at the state energy company said.Security is also a factor after the 2013 attack on the In Amenas plant run by BP and Statoil with Sonatrach in which 40 oil workers died.Oil executives said bilateral contracts may offer flexibility, but Algeria's legal framework and red tape remained a major concern for some companies and it was still unclear what terms Sonatrach would be offering.Reliant on its mature fields, Algeria's output as been declining for a decade.Oil executives say beyond the tough financial terms and short exploration periods, other problems in Algeria can be traced back to bureaucracy, delays in data processing, and slow decision-making at Sonatrach and ALNAFT.At a North African oil conference in Algiers late last year, foreign executives repeatedly urged better incentives and flexibility while welcoming dialogue with the government to cut delays that can drag on for years.That could be a more tailored process with fields open to only companies suited to developing them, one industry source said.
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