Baku, July 11, AZERTAC
Algeria is preparing to counter a decision by French oil major Total to seek arbitration against its oil and gas firm Sonatrach, anticipating the legal action will have little impact, according to a Sonatrach statement, according to the Reuters.
Total said last week it had filed a request for arbitration against Algeria for changing profit-sharing terms on oil and gas contracts in the mid-2000s, and that attempts to reach a mutual agreement had failed.
Algeria, hard hit by the crash in oil prices, is seeking new investment to help it build up production from mature fields and explore new areas.
"We take note of the Total arbitration decision and we will prepare to counter it vigorously," said the Sonatrach statement seen by Reuters.
It said French Total produces less than 1 percent of Algeria's output, which is estimated at 195 millions tonnes of oil equivalent."We will defend our case very hard, but at the end of the day we are talking about only 180 million euros ($200 million)," one government source familiar with the case told Reuters, referring to an amount Total may seek in the case.
Asked if potential compensation was in the hundreds of millions of euros, as suggested by Le Monde newspaper, Total's chief executive said it was less than that.
Le Monde reported Total and its Spanish partner Repsol had launched litigation at the International Court of Arbitration in May against Sonatrach for changing profit-sharing terms contracts in the mid-2000s. Repsol has declined to comment.
Sonatrach said in the statement that several international firms including ENI, BHP-Billiton, Cepsa, and Pertamina have already abandoned the option to seek arbitration.
U.S. firm Anadarko Petroleum Corp and Maersk Oil, a unit of Danish conglomerate A.P. Moller-Maersk, reached settlements in 2012 worth about $4.4 billion and $920 million in oil respectively.
Total owns 35 percent in the gas field of Tin Fouye Tebenkort, also called TFT, which produces 14 million cubic meters per day.