Sid Ali Betata, former director of mineral exploitation & conservation at the Energy Ministry, has been appointed head of the new national agency for hydrocarbons resource valorisation, Agence Nationale pour la Valorisation des Ressources en Hydrocarbures (Alnaft). Alnaft will take charge of the tendering process of hydrocarbons licences and the payment of taxes and royalties.

Nourredine Cherouati will be in charge of the new regulatory agency, Agence Nationale de Controle et de Regulation des Activites dans le domaine des Hydrocarbures (ARH), which will oversee compliance with the hydrocarbons law and study applications for pipeline transportation and storage contracts. Cherouati is the former head of Sonatrach's transportation arm, Naftal, and of Transmediterranean Pipeline Company, responsible for the Transmed pipeline between Algeria and Italy.

Both regulatory bodies will be fully constituted legal entities with financial autonomy, each governed by a board of five directors. However, all newly-awarded oil and gas permits will have to be submitted to the Council of Ministers (cabinet) for final approval, and the agencies will also report to the national energy council.

Funding will come from a variety of sources, including 0.5 per cent of royalties payable under oil and gas contracts. Until a revenue stream is established, the Energy Ministry will give each agency an annual budget of $1 million.

'It is likely to take about five years before the new agencies are genuinely up and running,' says a spokesperson for a major European oil company. 'But we are willing to be patient during this period to allow the institutions to develop. The redefinition of Sonatrach as a competitor under the new law will make it a more exciting and dynamic environment to work in.'