Africa-Press – Angola. The Angolan President has approved a special legal regime to maximize the recovery of hydrocarbons in oil concessions in production located in the Angolan maritime zone, aiming to promote incremental production in mature fields, according to a presidential decree.
In a presidential legislative decree dated November 20, consulted today by Lusa, João Lourenço considers that this regime should enable additional investments to carry out field redevelopment activities in mature blocks and projects that present the potential to increase, “quickly”, hydrocarbon production in the country.
The new rules for increasing oil production in Angola ensure the possibility of recovering the investor’s cost in the event of failure in drilling wells, the diploma states, applicable only to research, development and production activities of hydrocarbons that result in incremental production in mature blocks.
For the Angolan National Oil, Gas and Biofuels Agency (ANPG), “mature [oil] fields” are those that have been in operation for 25 or more years and/or have production equal to or greater than 70% of proven reserves.
This special legal regime for incentives for incremental production establishes exceptional measures that imply an advantage or tax relief compared to the court regime provided for in the Law on Taxation of Petroleum Activities.
According to the diploma signed by João Lourenço, and already published in the Official Gazette, tax incentives are granted, in the form of a reduction in the rate of the Tax on Oil Production and the Tax on Oil Income, whenever the technical, economic and contractual conditions of its production justify it.
In association contracts, the rate of the Tax on Oil Production for Incremental Production is reduced to 15%, starting from the month following the completion of the first activity provided for in the General Development and Production Plan.
According to the presidential decree, in production sharing contracts, the Oil Income Tax rate is set at 25%, starting from the month following the conclusion of the first activity, and the request for production incentives must be sent to ANPG, the national concessionaire.
The national concessionaire is annually assured of the financial resources necessary to meet the expenses and costs associated with the pursuit of the national concessionaire’s duties in the area of incremental production, the document reads.
Angolan Minister of Mineral Resources, Oil and Gas, Diamantino Azevedo, said last August that investments in active oil concessions in Angola, not including new blocks auctioned, amounted to 47 billion dollars between 2018 and 2022 and will increase to more than 72 billion dollars between 2023 and 2027.
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