Adopts Presidential Decree 8/24 on Oil and Gas Incremental Production
20 Nov 2024
On 20 November 2024, Angola enacted Presidential Decree 8/24 on Oil & Gas Incremental Production ("Incremental Production Decree"). The Decree introduces a special legal and tax framework to encourage investment in offshore mature blocks and undeveloped areas. It offers significant tax incentives, including reductions in the Petroleum Production Tax from 20 per cent to 15 per cent and the Petroleum Income Tax from 65.75 per cent to 55.75 per cent for association agreements. For production-sharing agreements, the Petroleum Income Tax is reduced from 50 per cent to 25 per cent, with an increase in cost-oil recovery up to 70 per cent. Additionally, the national concessionaire's profit-oil share is reduced to 25 per cent. The framework also ensures that all exploration well costs are recoverable or deductible from any existing or future production, regardless of the well's success. To qualify, operators must demonstrate that the field is within an offshore mature block or an undeveloped area and that the project's internal rate of return does not exceed 25 per cent, based on specific contractual and fiscal terms. These measures aim to attract additional investments by providing fiscal advantages over the standard taxation regime, thereby enhancing hydrocarbon recovery in Angola's offshore regions.
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Type:
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Promotion and facilitation (Investment incentives)
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Industry:
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Primary (Mining and quarrying)
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Sources:
