Anadarko Petroleum Corp. (APC) announced it has reached an agreement with Algerian government-owned company Sonatrach to resolve the dispute regarding Sonatrach's implementation of Algeria's 2006 exceptional profits tax.
The agreement is expected to receive approval from Algerian government authorities within the next four months. Upon such approval, the existing arbitration proceeding between the parties will be dismissed.
Anadarko stated that the agreement provides for delivery to Anadarko of additional crude oil volumes in the amount of about $1.8 billion over a period of 12 months from the effective date.
Additionally, the companies have agreed to amend the existing Production Sharing Agreement or PSA to provide that Anadarko will receive a higher volume of profit barrels. The effect of the amendment will provide Anadarko with approximately $2.6 billion of additional net present value over the remaining term of the PSA.
The amendment also confirms the term for each development license granted under the PSA will be extended and as a result, will now be 25 years from the original effective date, Anadarko said.
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