July 1999

Algeria Master Report

1. The interaction between business and regulatory constraints

1.1 The regulatory background

Algeria’s privatization law offers advantages to private investors-tax incentives, deferred payments, and an employee ownership option. The investment code (1993) presents significant medium and long term opportunities to foreign firms seeking a market in Algeria. The Government of Algeria has been pursuing reforms to reduce its vulnerability on oil sector and public sector modernisation.

1.2 Business constraints and entry barrier

Progress on economic reform and oil and gas sector expansion have contributed to a recovery since 1995. The hydrocarbons sector is the backbone of the economy, accounting for roughly 60% of budget revenues, 25% of GDP, and over 97% of exports earnings. Algeria is the fifth –largest reserves of natural gas in the world and is the second largest gas exporter with Europe as main market.

1.3 On-going regulatory developments concerning alternative networks

A privatization program has been launched and could have an impact in the near future. .

2. Inventory of the major « public » utilities with a potential for use in IS applications

2.1 Oil and Gas exploitation

The State-owned hydrcarbons company, Sonatrach has planned an expansion in production and exports. Sonatrach has built or extended new pipelines (Trans Maghreb pipeline and Trans-Med gas pipeline). In 2000, Algeria will have achieved the first phase of gas development with a ccapacity of 60 billions of m3.

Sonatrach is encouraging foreign oil company exploration and has signed about forty oil/gas exploration and production-sharing agreements with foreign firms.

2.2 Railways

The railway network covers mainly northern Algeria. It includes 4200 kilometers of tracks.

2.3 Cable network

No cable network has been installed in Algeria today.