The document – which gives authorization to the President of the Republic, as holder of executive power, to legislate on this regime – passed the scrutiny of deputies unanimously, with 172 votes in favor, with the objective of "encouraging investment and increasing oil production", says a statement from parliament, to which VerAngola had access.
Thus, with this approval, the tax on oil production will go down to 15 percent, compared to the previous 20 percent, in association contracts, while the tax on income will decrease to 55.75 percent, compared to current 65.75 percent.
The document "legislates on reducing the tax rate on oil production to 15 percent in association contracts and reducing the tax rate on oil income to 55.75 percent and 25 percent, respectively, in association contracts and production sharing contracts", reads the statement.
The aforementioned document "intends to maximize the recovery of hydrocarbons in oil concessions in maritime areas in production, in order to promote incremental production and increase the economic attractiveness of new projects to be implemented in mature fields and in projects in undeveloped development areas".
In addition to establishing regulatory standards, the document also defines the "legal framework and tax treatment of costs to be incurred in the exercise of hydrocarbon research, development and production activities that result in incremental production, in terms of cost recovery from of oil production in any development area, whether or not it results in the discovery of hydrocarbons".
On the occasion, the Secretary of State for Oil and Gas, José Alexandre Barroso, who presented the document, assured that it will help the State to reverse the "sharp decline in oil production" that is currently occurring, given that the "creation of a special tax regime" will contribute to "maintaining production levels that can sustain the economy".
"If we let this downward curve continue, it will be much more difficult to produce the oil that still remains accumulated underground in mature fields," said José Alexandre Barroso, quoted in the statement.
According to the person responsible, the request for legislative authorization aims, fundamentally, to "grant the National Oil and Gas Agency the possibility of carrying out studies with its associates, to really determine how much oil and gas still exists underground and what mechanisms can be used for its recovery and at what costs".
Already cited in a statement from the Ministry of Mineral Resources, Oil and Gas, to which VerAngola had access, the official said that this measure - which aims to provide "incentives to investors to produce additional volumes in concessions currently in production, such as fundamental strategy for the sustainable development of the national oil sector - aims to "reverse the decline in oil production in mature fields and maintain production above one million barrels of oil per day".
According to the authority, mature fields refer to fields that have already produced or achieved "more than 70 percent of the quantity of oil or gas calculated in a deposit".
