ANGOLA AFRICAN HUB COUNTRIES “
Any upstanding domestic or foreign company may apply for the issue of a three year prospecting license
equipment and hire Angolan service providers, insofar as they are identical to those available in the interna- tional market for delivery in good time and to the ex- tent that their prices are no more than 10% higher than the cost of imported items or services, including customs, tax and shipping and insurance costs. Con- sultation of Angolan companies under the same con- ditions as the consultation of foreign companies is mandatory. Companies that perform oil operations in Angola shall employ Angolan citizens in every cate- gory and function, unless the domestic market lacks skilled and experienced Angolan citizens.
Bank guarantee ensuring fulfillment of the work
obligations assumed in prospecting licenses and oil concessions is required. In the case of a prospecting license, the amount of the guarantee shall be 50% of the value of the estimated work. As for the associates of the National Concessionaire, the guarantee shall correspond to the value attributed to the mandatory work schedule of the oil concession. The National Concessionaire may also require to its associates to present parent company guarantee.
The activity of the licensees, the associates of the
National Concessionaire and the National Conces- sionaire, related with the petroleum operations is over- seen by the Ministry of Petroleum. Disputes between the Ministry of Petroleum and the licensees or be- tween the National Concessionaire and its associates concerning contractual matters, which cannot be re- solved by agreement, shall be resolved by arbitration.
of these activities between national or foreign companies of proven com- petence and technical and financial capacity and the National Conces- sionaire is subject to prior approval of the Government and may lead to: (i) the incorporation of a company; (ii) the entering into of a consortium agreement; or (iii) the entering into of a production sharing agreement. The National Concessionaire may also carry out petroleum operations through risk service contracts.
The concession covers: (i) an exploration period comprising prospect-
ing, drilling, well-test activities and evaluation; and (ii) a period for de- velopment and production. However, the concession may cover just the development and production period and the Government may assign a concession directly to the National Concessionaire, should it wish to carry out petroleum operations in a particular area without having to associate with other entities.
If the National Concessionaire wishes to associate with other compa-
nies, it shall request the Ministry of Petroleum to issue a public call for tenders for the selection of the companies that will become associates for oil exploration and production in a given area. Direct negotiation may only occur when, after a public call for tenders, there was a lack of tenders or the tenders were not satisfactory. Upon extinguishment of the conces- sion, operation assets and technical and economic data obtained shall re- vert to the National Concessionaire.
The point of transfer of ownership of the oil produced lies beyond the
mouth of the well, and the associates of the National Concessionaire may freely dispose of their share of the oil produced, except in cases of need for domestic consumption and of national emergency requisition. The specific terms of the concessions and their different periods and phases are laid down in the relevant concession decree.
Regarding local content, prospecting licensees, companies that are
granted oil concessions in association with the National Concessionaire and the National Concessionaire, shall acquire Angolan materials and
While Angola has extensive natural gas resources (according to data
available in 2011 the proved reserves were in the amount of 10.95 trillion cubic feet) historically, the vast majority of this natural gas was re-injected into oil fields to help recovery or simply flared off as a by-product of oil operations and even as recently as 2011, re-injection and flaring still ac- counted for 91% of all the natural gas produced in the country.
Since 1997 the government has shown interest in enhancing Angola’s
ability to produce and market its natural gas reserves and in 2001 activities involving reception and processing of gas, production of LNG and its commercialisation were declared to be public interest (Resolution 17/01, of October 12) and ultimately resulted in the ‘Angola LNG Project’.
The Angola LNG Project legal framework was enacted in 2007 (De-
cree-Law 10/07, of October 3) and to date, those regulations specific to the natural gas sector have focused on the development of the country’s first LNG facility in Soyo.
The arbitral tribunal shall sit in Angola under Angolan law and the arbi- tration shall be conducted in Portuguese.
It is within this legal background and after a successful bidding process
for offshore pre-salt blocks in 2011, that Angola is planning a second bid for pre-salt to take place this year, this time for onshore blocks. 10 blocks are expected to be auctioned in the Soyo Basin and another five in the Kwanza Basin with the focus to attract small and medium companies. Fur- ther details concerning the 2013 bid are still to come.
Angola LNG Project Alongside the announcement of the 2013 onshore pre-salt bid, it was con- firmed that there would be a delay, due to technical problems, on the com- mencement of production of the Angola LNG (liquefied natural gas) Project, previously forecasted for the beginning of 2012. It is expected that the project will start exporting LNG in the second quarter of 2013.
ENERGY & INFRASTRUCTURE | SUB SAHARAN AFRICA 2013 47
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