In a presidential legislative decree dated 20 November, consulted by Lusa this Friday, João Lourenço considers that this regime should enable additional investments to carry out field redevelopment activities in mature blocks and projects that have 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, states the diploma, applicable only to research, development and production activities of hydrocarbons that result in incremental production in mature blocks.
For the 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 percent of proven reserves.
This special legal regime for incentives to 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 percent, 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 rate of the Oil Income Tax is set at 25 percent, 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 the necessary financial resources to cover the expenses and costs associated with pursuing the national concessionaire's duties in the area of incremental production, the document reads.
The Minister of Mineral Resources, Oil and Gas, Diamantino Azevedo, said last August that investments in active oil concessions in Angola, not including the 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.
