Your hydrocarbon contract in Algeria, from negotiation to close out
You hold, or are negotiating, a contract with Sonatrach under Law 19-13. UpGrowth sets senior experts from the national oil and gas industry at your side: they conduct and draft the fiscal and accounting provisions, the operating agreement and every procedure that follows, model the economics of the field, compute your share and your taxes, follow your liftings and close the contract out.
- Law 19-13, every contract form: participation, PSC, RSC
- A confidentiality agreement is signed before any document changes hands
- Deliverables in French or English, Arabic on request
What UpGrowth does
Six parts, from negotiating the contract to closing it out.
1. Negotiating the hydrocarbon contract
The production sharing, accounting, financial and tax provisions, conducted and drafted before you sign.
Production sharing provisions
- Conduct and drafting of the production sharing provisions
- Sharing terms tested against the economics of the field
- Wording aligned with the contract form negotiated
Accounting and financial provisions
- Accounting provisions of the contract, from cost booking to reporting
- Financial provisions: contributions, advances and payments between the parties
- Consistency with your group reporting requirements
Tax provisions
- Tax provisions of the contract under Law 19-13
- Each tax clause read against its real cost to the partner
- Drafting proposals ready for the negotiation table
Conduct of the negotiation
- Experts at your side on these chapters, round after round
- Redlines and fallback positions prepared in advance
- Minutes and final wording checked before signature
2. Operating agreement and contract documents
The documents that run the association day to day.
Operating agreement
- Conduct and drafting of the operating agreement
- Missions of the operator acting on behalf of the contracting parties
- Governance, decision rules and approval cycle
- Work programme, budget and cost reporting
Amendments
- Drafting of amendments to the hydrocarbon contract
- Consistency check against the contract and previous amendments
- Economic effect measured before signature
Letter agreements
- Letter agreements on points the contract leaves open
- Wording consistent with the contract and the operating agreement
- Tracking of the commitments they create
Gas agreement
- Conduct and drafting of the gas agreement
- Articulation with the hydrocarbon contract and the operating agreement
- Review of the clauses before signature
3. Contract procedures
The procedures that turn the contract into daily operations.
Production sharing procedure
- Drafting of the production sharing procedure
- Rules and timetable for sharing production between the parties
- Periodic reconciliation of each party's share
Technical procedures
- Drafting of the technical procedures attached to the contract
- Alignment with the operating agreement and the work programme
- Updates as operations evolve
Common cost allocation
- Procedure for allocating common costs
- Allocation keys documented and defensible
- Consistency with the accounting provisions of the contract
Unitisation and determination
- Unitisation procedure for fields straddling several perimeters and contracts
- Determination of each party's share of the field
- Preparation of the unitisation agreement
Secondment of personnel
- Procedures for the secondment of staff by the contracting parties
- Terms, duration and cost treatment of each secondment
- Consistency with the common cost allocation
Lifting procedure
- Drafting of the lifting procedure
- Nominations, scheduling, over and under lift balancing
- Consistency with the production sharing procedure
4. Field economics and partner share
What the field is worth, and what comes back to you.
Profitability studies
- Economic profitability studies of fields
- Cash flow, return and payback under the contract terms
- Scenarios on price, production profile and costs
- Economic reading before an amendment, a development or an exit
Partner share
- Economic evaluation of the partner's position
- Partner share under a participation contract
- Partner share under a production sharing contract
- Partner share under a risk service contract (RSC)
5. Petroleum taxation and partner filings
How each tax is computed and paid, and your returns filed on time.
Petroleum tax analysis
- Calculation terms of the petroleum taxes applicable to your contract
- Royalty, hydrocarbon income tax (IRH), income tax and the tax on the foreign co-contractor's remuneration
- Payment terms, timetable and the party that bears each tax
- Effect of each tax on the partner's economics
Partner tax returns
- Support and assistance with the partner's tax returns under Law 19-13
- Computations prepared and reviewed before filing
- Filing calendar tracked, alert before each deadline
- Returns and working papers archived and accessible
6. Authorities, liftings and close out
Your relations with the administration, your liftings, and a clean exit.
Authorities and agencies
- Advice and orientation in your relations with the hydrocarbon authorities and agencies, ALNAFT and ARH included
- Identifying the competent body for each subject
- Letters and files prepared before each submission
- Briefing before each meeting
Liftings
- Management and follow up of the partner's liftings of crude oil, condensate and LPG
- In coordination with the marketing activity (COM) of Sonatrach
- Lifted volumes tracked against entitlement
- Periodic lifting statement for the parent company
Contract close out
- Liquidation of the contract (close out)
- Final statement of accounts between the parties
- Closing the procedures and agreements attached to the contract
- Contract archive handed over to the partner
Any other contract document
- Conduct and drafting of any document linked to your hydrocarbon contract
- Review of a document before you sign it
- An expert on call for the life of the contract
What you receive
- Clauses and procedures drafted, ready for the negotiation table
- Economic models delivered with their assumptions
- Tax computations documented line by line
- A signed report for every assignment
- The calendar of your contractual and tax deadlines
How we work
This is how we work.
- 1
You tell us where your contract stands, we scope the assignment
- 2
A confidentiality agreement is signed before any document changes hands
- 3
The perimeter is written down before work starts
- 4
By assignment, or on call for the life of the contract
- 5
You are warned before each deadline, not after
Who delivers
- Senior experts from the national oil and gas industry
- Specialists of the contractual, accounting and tax side of hydrocarbon contracts
- UpGrowth holds the engagement, the schedule and the invoicing
- Deliverables in French or English, Arabic on request
Who this service is for
- Foreign partners holding a hydrocarbon contract with Sonatrach
- Groups negotiating a new contract under Law 19-13
- Operators and non operators within an association
- Contracts, finance and tax departments of partner companies
- Partners preparing the end of a contract
UpGrowth is a private firm. It has no partnership, accreditation or preferred supplier status with Sonatrach, ALNAFT or ARH, and it does not speak for them. Those names describe the setting our clients work in.
Where to start, depending on where your contract stands
The numbers refer to the six parts of this page.
You are negotiating a contract
- Part 1 for the sharing, accounting, financial and tax provisions.
- Part 4 to model the field and your share.
- Part 5 to measure each tax before you sign.
Your contract has just been signed
- Part 2 for the operating agreement.
- Part 3 for the procedures, lifting included.
- Part 5 for your first tax returns.
Your field crosses another perimeter
- Part 3 for unitisation and determination.
- Part 4 to measure the effect on your share.
- Part 2 for the amendments that follow.
Your contract is coming to an end
- Part 6 for the close out.
- Part 5 for the final tax position.
- Part 4 for the final statement of your share.
Related pages
- Hydrocarbons technical expertiseReservoir and drilling, gas and rotating machinery, refining, pipelines, inspection, HSE, engineering and expert opinion, by senior experts from the national oil and gas industry.
- Liaison office, branch or subsidiaryComparing the three legal presences of a foreign company in Algeria.
- Contract awarded in Algeria: what a foreign company must set upThe order of operations from award to crews on site.
- Recruitment and foreign workersRecruitment, foreign headcount, work permits, visas, residence permits, employer compliance and end of contract.
- Accounting, tax and payrollBookkeeping, tax and social filings, payroll, assistance during a tax audit and tracking of your deadlines, with a named contact.
International partners under a signed MoU
Frequently asked questions
Which contracts does this service cover?
Every contract form: participation, production sharing and risk service contract (RSC), under Law 19-13 on hydrocarbon activities.
Can you support us before we sign?
Yes. The production sharing, accounting, financial and tax provisions are conducted and drafted before signature. Experts are at your side on these chapters, round after round, with redlines and fallback positions prepared in advance, and the minutes and final wording checked before signature.
Do you handle the operating agreement and the procedures that follow?
Yes: conduct and drafting of the operating agreement, the amendments, the letter agreements and the gas agreement, then the contract procedures: production sharing, technical procedures, common cost allocation, unitisation and determination, secondment of personnel and the lifting procedure.
Can you model the economics of a field and our share?
Yes: economic profitability studies of fields, cash flow, return and payback under the contract terms, scenarios on price, production profile and costs, and the partner share under a participation contract, a production sharing contract or a risk service contract.
Can you help with petroleum taxation and our tax returns?
Yes: analysis of how the petroleum taxes applicable to your contract are calculated (royalty, hydrocarbon income tax, income tax and the tax on the foreign co-contractor's remuneration), support with the partner's tax returns under Law 19-13, computations prepared and reviewed before filing, and a filing calendar tracked with an alert before each deadline.
Can you follow our liftings and close the contract out?
Yes: management and follow up of the partner's liftings of crude oil, condensate and LPG, in coordination with the marketing activity (COM) of Sonatrach, lifted volumes tracked against entitlement and a periodic statement for the parent company. Then liquidation of the contract (close out), the final statement of accounts between the parties, closing the procedures and agreements attached, and the contract archive handed over to the partner.
How does an assignment start, and are our documents kept confidential?
You tell us where your contract stands and we scope the assignment. A confidentiality agreement is signed before any document changes hands, and the perimeter is written down before work starts. The assignment can be one off or on call for the life of the contract. No price is published here: the quote is tailored after a short exchange.
Is UpGrowth linked to Sonatrach, ALNAFT or ARH?
No. UpGrowth is a private firm, with no partnership, accreditation or preferred supplier status with these bodies, and it does not speak for them. The service includes advice and orientation in your relations with the hydrocarbon authorities and agencies, letters and files prepared before each submission and a briefing before each meeting.
Tell us where your contract stands
Describe your position in a few lines. We answer with the services that apply to your case, the order in which to engage them, and the confidentiality terms we work under. No price is published here: the quote is tailored after a short exchange.
Offices in Birkhadem, Algiers. Sunday to Thursday.
