Parliament adopts plan to improve financial situation

Algeria's parliament adopted Monday the government's Plan of Action (POA), official APS news agency reported. The government's plan, which aims to promote President Abdelaziz Bouteflika's development program, was adopted by a majority of the People's National Assembly, APS said.
A total of 341 members of the parliament voted yes, 64 voted no and 13 abstained. In his address to the parliament, Prime Minister Ahmed Ouyahia said his government will resort to non-traditional funding to save Algeria from severe economic crisis. He said the public treasury will turn to the central bank rather than borrowing foreign debt, denying claims that such measure would cause depreciation of the currency and vicious inflation.
According to the prime minister, Algeria's foreign exchange reserves amounted to an equivalent of 103 billion U.S. dollars by late August, down from about 195 billion dollars at the end of March 2014. The decline in reserves is due to the combination of lower oil prices and a sharp increase in imports, he said.
Ouyahia, however, promised that the government will maintain its policy of subsidies for products such as oil, sugar and milk. The POA will still need approval from the Council of the Nation (upper house of the parliament) before implementation.
In the same context, Algeria announced bold changes to its hydro­carbon development policy, including the resumption of a $70 bil­lion shale gas project. The project to tap into the country’s extensive shale reserves would represent the first non-conventional gas boom outside the United States but has encountered resistance due to envi­ronmental concerns.
Algerian Prime Minister Ahmed Ouyahia on October 1 said the gov­ernment would restart its shale gas development plan and revise the country’s hydrocarbon laws, end­ing a stipulation that joint ventures must leave Sonatrach, the national oil company, with at least 50% of shares.
A natural gas development pro­gramme using the controversial fracking method was suspended months after it began in 2015 after violent protests broke out in south­ern Algeria. Opponents argued “the gas of death” poses environmen­tal risks, including the pollution of scarce water sources.
Ouyahia, who is struggling to bring the country out of a financial crunch, said the government was encouraging “investment in the hy­drocarbon sector, namely shale gas, because of its potential and capac­ity. “That will ensure an energy fu­ture for the country and give hope to the population,” he said in re­marks carried by the official APS news agency.
Ouyahia said: “This law must be made more attractive because the sector is going through big chang­es… that are forcing Algeria to keep pace with the shifts.” He added the country’s failure to attract foreign investors to help de­velop its conventional oil could be attributed to the law.
Foreign technology and money are crucial to boosting Algeria’s con­ventional reserves and tapping into shale gas but Algeria received bids for only 25% of concessions on offer during the last three licensing ten­ders in recent years. During a meeting with the US Algeria Business Council, Algerian Energy Minister Mustapha Guitouni said: “We must go on developing the shale gas industry and we are going to do it.”
He expressed the need to cut rising domestic gas consumption, which is eating away at potential gas exports. “Work to revise the hydrocarbon law is under way to make Algeria more attractive for foreign partners, namely in terms of drilling and de­veloping hydrocarbons,” Guitouni added.