The Activity Plan and Budget 2024-25 of ANPG, the Angolan oil & gas regulator and Concessionaire, has just been published and approved by Presidential Decree 125/24, of 14 June 2024. This is a key document for the Angolan petroleum industry as it lays down the government’s strategy to revitalize the sector with the goal of increasing production.

The plan contains a significant number of actions and initiatives, but we have selected the following as the most critical:

• ANPG is currently working on developing several regulations, including the following:

1. Technical Regulation of the General Development and Production Plan;
2. Technical Regulation for the Submission of Production Data and Information;
3. Technical Regulation on Use of Third-Party Facilities;
4. Technical Regulation on Well Safety and Integrity;
5. Instruction on Reporting Concession Economic and Entitlement Information;
6. Technical Regulation on Gas Flaring and Leakage;
7. Technical Regulation for Natural Gas Processing Facilities.

• Construction of the ANPG Exploration and Production Data Center;
• Certification of the petroleum reserves estimates presented by the operators;
• Proceed with the development of the New Gas Consortium project (develop Quiluma and Maboqueiro non-associated gas reserves);
• Conduct feasibility studies to build export terminals for the Congo and Kwanza onshore basins production;
• Conduct feasibility studies to expand gas pipeline network;
• Accelerate the program for production (opex and capex) cost reduction/optimization;
• Evaluate the potential of Lower Congo, Kwanza, Benguela and Namibe basins and increase exploration in all free areas;
• Conclude the 2023 Licensing Round process;
• Prepare the 2025 Licensing Round (“permanent offer blocks” and “pre-salt blocks”);
• Award new blocks by direct negotiation;
• Provide additional tax incentives for mature fields and to stimulate exploration in existing development areas as part of the “Incremental Production Project”;
• Develop strategy to award petroleum concessions in 2026-2030.

Rui Amendoeira, OneLegal Partner.

A project-specific Value Added Tax (VAT) regime for the New Gas Consortium was created by way of Presidential Legislative Decree 6/24, of 22 May 2024. Below is an outline of the new VAT regime:

• The regime is applicable to the Petroleum Companies (Azule Energy, Chevron, Sonangol P&P and TotalEnergies) that carry out exploration, production, transport and sale of natural gas in the Concession Area of the New Gas Consortium under the respective Risk Service Contract concluded with the National Concessionaire (ANPG);
• The Petroleum Companies are subject to the section of the VAT Code specifically applicable to the petroleum industry;
• The following operations are exempt from VAT:

                       1- The importation of equipment, raw materials and other products used in the petroleum
                             operations;

                       2- The acquisition in the Angolan market of equipment exclusively and directly used in the
                             petroleum operations.

• The sale of natural gas in the Angolan market made by the Petroleum Companies is equivalent to the exportation of gas for purposes of the right of VAT deduction;
• VAT refunds may be requested by the Petroleum Company 1 month after a situation of overpayment. If refund is not processed within 1 month of request, the tax office must issue a Certificate of Tax Credit within 5 business days;
• A Certificate of Tax Credit may be used against any owed tax (including customs duties, Industrial Tax withholding and Surface Fee), with the exception of the following: (i) Petroleum Income Tax, (ii) Petroleum Production Tax, (iii) Petroleum Transaction Tax, and (iv) Workers Compensation Tax;
• The Petroleum Companies must withhold (and pay to the tax office) the VAT amount included in the invoices for the acquisition of goods and services (captive VAT) in accordance with the VAT Code;
• The captive VAT must be paid in full to the tax office (including VAT relating to operations that grant right to deduct) except in relation to the aforementioned exemptions;
• If deductible VAT is included in the exploration, development, production and abandonment costs of the Petroleum Company, same VAT shall not be deducted against Petroleum Income Tax.

Each Petroleum Company described above must create a separate entity exclusively dedicated to the New Gas Consortium activities.

The New Gas Consortium is Angola’s first non-associated gas development project. It is operated by Azule Energy with a 37.4% interest, and also includes Chevron (31%), Sonangol P&P (19.8%) and TotalEnergies (11.8%).

Rui Amendoeira, OneLegal Partner.

Presidential Legislative Decree 4/24, of 22 May 2024, and Presidential Legislative Decree 5/24, of 22 May 2024 enacted the tax incentives for the concession areas of Blocks 49 and 50, respectively. The list of incentives is as follows:

• “Qualified Marginal Zones” declared in the areas will enjoy the tax incentives set forth in Presidential Legislative Decree 6/18, of 18 May 2018. A “Qualified Marginal Zone” is defined as a deposit that:
                           1) Has recoverable reserves equal to or less than 300 million barrels and a after tax Internal Rate of Return (IRR) of less than 25%; or
                           2) Has recoverable reserves greater than 300 million barrels and a after tax IRR of less than 20%.

• The IRR is to be confirmed by the Ministry of Finance through an annual independent audit. In the event of a dispute on the IRR calculation, the National Concessionaire and/or the Joint Venture may submit the matter to an independent expert;
• The investments and costs incurred in projects aimed at reducing greenhouse gas emissions will be depreciated for tax purposes at the rate of 33.33% per year;
• Any exploration costs incurred may be deducted against revenues generated in any part of the concession area, including in the Qualified Marginal Zones;
• An Investment Premium is given as follows:
• In the amount of 30% for any capital expenditures incurred in the concession area, except in a Qualified Marginal Zone, to be deducted against Petroleum Income Tax;
• In the amount of 20% for any capital expenditures incurred in a Qualified Marginal Zone to be deducted against Petroleum Transaction Tax;
• In the amount of 30% for any capital expenditures incurred in a project aimed at reducing greenhouse gas emissions (except in a Qualified Marginal Zone) to be deducted against Petroleum Income Tax;
• In the amount of 20% for any capital expenditures incurred in a project aimed at reducing greenhouse gas emissions and located in a Qualified Marginal Zone to be deducted against Petroleum Transaction Tax.

In the event a change of law occurs after the signing of the Risk Service Contract for Blocks 49 & 50 which negatively affects the above set of incentives, the National Concessionaire and the Joint Venture must amend the said contract as necessary to restore the initial economic balance.

Blocks 49 & 50 were awarded last January and will be operated by Cabinda Gulf Oil Company Limited – Chevron’s Angolan subsidiary – under a Risk Service Contract to be signed with ANPG (National Concessionaire). The blocks are located in the ultra-deep waters of the Lower Congo Basin.

Rui Amendoeira, OneLegal Partner.

By way of Order 2/24, of 22 March 2024, the Angolan Central Bank (BNA) adopted the regulations (“Regulations”) for implementation of Law 5/20, of 27 January 2020, on the Prevention and Combating of Money Laundering, Terrorist Financing and Proliferation of Weapons of Mass Destruction applicable to financial institutions (banks). Below are some practical highlights of the new Regulations:

• Banks must engage in a risk assessment process every 12 months (or 24 months in certain cases);
• Banks must suspend any operation or freeze an account if:
  1- The operation is considered suspicious;
  2- It involves a person or entity which is part of a blocked, sanctions or restricted list.
• Banks cannot open anonymous accounts or accounts under fictitious names;
• Banks must keep and preserve information for any operation (or related operations) equal to or higher than USD 15.000;
• In case of corporate clients, the ultimate beneficiary owner (UBO) of such client must always be identified;
• In addition to the identity information on the clients/UBOs, banks must also obtain or assess the following additional elements:
  1- Source of client’s funds and wealth;
  2- Proof that the funds were obtained in a legitimate manner;
  3- Client’s reputation and background;
  4- Information on client’s family relatives and business partners.
• Risk management procedures are reinforced for clients/operations involving (i) high  risk jurisdictions, (ii) private banking clients, and (iii) politically exposed persons (PEPs);
• Banks must immediately report to BNA (Financial Information Unit) any operation involving a crime of money laundering, terrorist financing or proliferation of weapons of mass destruction or any other crime;
• Banks must create internal channels for receiving reports and complaints regarding the above crimes;
• Each bank must have a Compliance Officer;
• In case the bank decides to terminate the relationship with a client, it must;
• Immediately stop any operation or transfer related to that client;
• Close the account and request the client to transfer the funds to another bank or withdraw the funds within 30 days.

Banks must submit an annual report to BNA on their policies and procedures to prevent and manage risks associated with money laundering, terrorist financing and proliferation of weapons of mass destruction.

Rui Amendoeira, OneLegal Partner.

Travel agencies are subject to new regulations (“Regulations”) adopted by Presidential Decree 72/24, of 15 March 2024. Below are the Regulations highlights:

1. Angolan travel agencies can provide the following main services:

• Organize touristic trips/tours;
• Make reservations in hotels and other accommodation;
• Sell transportation tickets;
• Represent foreign travel agents;
• Provide support and assistance to customers (airport pick up, transportation, hotel check-in/out, etc).

2. Travel agencies can provide the following accessory services:

• Obtain passports, visas or other travel documents;
• Organize events such as conferences, seminars, congresses, summits, meetings, etc;
• Sell event tickets;
• Provide advice and assistance on foreign exchange transactions;
• Assist customers in rent-a-car contracts;
• Sell travel insurance;
• Sell touristic guides;
• Provide touristic transportation;
• Assistance in museum, monuments and historical visits.

3. Travel agencies are sub-classified as:

• Travel and Tourism Agencies;
• Tourism Agencies;
• Tourism Operators.

4. Travel agencies must obtain a license to be issued by:

• The Ministry of Tourism in case of Travel and Tourism Agencies;
• The Provincial Government in case of Tourism Agencies;
• The Local Administration in case of Tourism Operators.

Licenses are valid for 5 years (renewable).

Existing licenses will remain in force. However, they must be adjusted to the requirements of the new Regulations within 90 days.

Travel agencies must post a bond to the licensing entity and take out insurance for their activities. The bond and insurance minimum amounts are set by separate instrument.

Each travel agency must appoint a duly qualified “Technical Director” (Director Técnico). Technical Directors can only work for one travel agency.

5. Licensing entities (Ministry of Tourism, Provincial Government of Local Administration) must keep an updated recorded of licensed travel agencies containing the following minimum information (among other elements):

• Travel agency name;
• Taxpayer number;
• Activity description;
• Location of head office and other offices;
• Names of directors and managers;
• Brand name(s) used by the agency;
• Amount and form of bond(s) provided.

Travel agencies must have a dedicated offices(s), exclusively used for their activities. The licensing entity may authorize other activities to be carried out in the same office provided they do not pose a conflict with the travel & touristic activities.

Travel agencies may have sale desks in hotels, airports, railway stations, port terminals, shopping centers or similar places.

Duly identified staff of travel agencies may have access to the inside areas of airports, ports, railway stations, marinas, customs offices and similar places.

All travel agency offices must have a “Complaints Book” which must be immediately made available to customers upon request.

6. In case of international tourism trips, the travel agency must provide in writing the following information to its customers prior to departure:

• Any visa or passport requirements;
• Health requirements;
• Information on medical assistance in case of illness or accident.

This information may be included in the Trip Program.

Visits to museums, monuments, classified places, historical centers, etc, must be accompanied by a touristic guide.

7. Travel agency contracts must include the following minimum information:

• Details of the travel agency;
• Trip price (including reservation/upfront payment and subsequent payments if applicable) and date;
• Trip itinerary and duration of each stay;
• Participants;
• Accommodation details;
• Transportation details;
• Visits, excursions and other services included in the price;
• Optional services not included in price;
• Trip insurance details;
• Other specific items requested by customer and accepted by agency;
• Customer complaint terms and maximum penalties to travel agency in case of breach of contract.

Customer may be substituted by another person (who meets the trip requirements) until 7 days before the start of the trip (or 15 days in case of cruises or long-haul flights).  However, customer remains jointly liable for payment of the trip price.

Customer may cancel the trip at any time prior to departure. The travel agency must reimburse customer of any amount(s) paid, less an amount not exceeding 15% of the price and any appropriate costs incurred by the agency.

If customer is unable to complete the trip for reasons beyond his/her control, the travel agency must provide assistance to the customer until the point of departure or arrival.

Hotels and other touristic establishments cannot engage in anti-competitive practices, among themselves or in collusion with travel agencies.

Hotels and other touristic establishments must inform travel agencies in advance in case they post direct rates cheaper than rates charged to such agencies.

Unless otherwise agreed between the hotel and the travel agency, payment by the travel agency must be made within 30 days of check-out.

8. Hotel reservations may be cancelled by the travel agency without penalty if the cancellation is communicated in writing to the hotel:

• 15 days in advance if more than 50% of the reservations are cancelled;
• 10 days in advance if more than 25%, but less than 50%, of the reservations are cancelled;
• 5 days in advance if less than 25% of the reservations are cancelled or in case of individual reservations.

Provided the above advance notice is observed, the hotel must refund the travel agency in full.

The previous travel agency regulations contained in Presidential Decree 232/15, of 30 December 2015, are revoked.

Rui Amendoeira, OneLegal Partner.

By way of Order 1/24, of 21 February 2024, the Angolan Central Bank (BNA) has issued guidelines for the “Recovery Plans” to be submitted by financial institutions (banks) under the Financial Institutions Law. Below is an outline of Order 1/24:

1- The Recovery Plan must be submitted annually to BNA until 30 June of the year following the year to which the plan refers.

2- The Recovery Plan must have been audited by an independent audit firm.

3- Banks may apply for a dispensation from submitting the Recovery Plan by a duly grounded request to BNA presented by no later than 30 April. The dispensation is valid for 1 year only and may be cancelled at any time by BNA in case the circumstances that justified the dispensation cease to exist.

4- The Recovery Plan must provide for measures allowing the bank to restore its viability in periods of financial stress, including, without limitation, the following:

• Increase of equity or liquidity ratios;
• Asset disposal;
• Debt refinancing;
• Debt restructuring;
• Financial support from Intra-group entities;
• Access to external liquidity lines;
• Changes to business model or organizational or functional modifications.

The plan must contemplate concrete measures to, inter alia, restructure business verticals, merge or spin of business units, debt restructuring including conversion of debt into equity, identification of disposable assets, etc, including a risk assessment of such measures.

5- The bank is required to revise/update the Recovery Plan in the following cases:

• Any of the circumstances/assumptions under which the plan was prepared have changed so as to cause a material impact on the plan’s execution;
• The bank has suffered a financial, structural or organizational modification which has a material impact on the plan;
• Upon request by BNA.

An updated plan must be submitted within 30 days of the above events.

6- Banks must implement systems to monitor implementation of the Recovery Plan, including risks monitoring, changes to the bank’ economic or liquidity situation, market and business model modifications, among others.

7- Banks must have systems in place that allow for the timely generation of information and the sharing of such information to BNA as necessary: this includes information on (i) risks associated with intra-group loans or other transactions; (ii) liquid assets of parent company and subsidiaries, (iii) any off-balance sheet activities or transactions, (iv) exposure levels to major clients and other banks.

Rui Amendoeira, OneLegal Partner.

The Angolan government has approved its financing strategy for 2024-2026 (the “Strategy”) through Presidential Decree 52/24, of 15 February 2024. Below are the Strategy highlights:

The Strategy encompasses the so-called “direct public debt” (internal and external) which includes:

• Debt of Central Government;
• Debt of State-owned companies Sonangol (national oil company) and TAAG (flag carrier);
• Sovereign Guarantees issued by the government.

The Strategy will maintain the measures adopted in the 2022-2024 period, including:

• Prioritize debt instruments which reduce the risk of fluctuations in the interest rate or oil price;
• Not use debt instruments which are indexed to a hard currency (USD or Euro) to Kwanza (Angolan currency) exchange rate;
• Extend maturities of debt instruments;
• Reduce the number of Angolan debt instruments in circulation;
• Increase the size of debt instrument lots;
• Maximize concessional loans;
• Improve transparency with national and international investors.

In addition, for the period 2024-2026 the following new measures will be pursued:

• Promote sustainable financing based on ESG principles and which can achieve the Sustainable Development Goals (SDG);
• Avoid financing collateralized by oil or other commodities;
• Minimize short-term debt;
• Maximize external financing with long maturities (15-20 years);
• Seek grace periods of at least 5 years.

The Strategy aims to achieve the following debt indicators by 2026

Rui Amendoeira, OneLegal Partner.

By way of Presidential Decree 51/24, of 6 February 2024, the Angolan government has adopted Regulations on mining and oil and gas activities (“Activities”) in Environmental Protected Areas. Below are the Regulations highlights:

No Activities may take place in Full Natural Reserves (as defined in Law 8/20, of 6 April 2020 and Presidential Decree 50/24, of 2 February 2024).

Activities in Protected Areas (other than Full Natural Reserves) must respect a detailed list of environmental requirements as set out in the Appendix to the Regulations. These include 37 measures, broken down between exploration, production and site abandonment activities, dealing inter alia with the following topics:

• Seismic activities
• Sample collection
• Installation/dismantling of infrastructure
• Pipeline laying
• Water use
• Sand removal
• Soil contamination
• Waste disposal
• Noise
• Lightning
• Fencing
• Vehicle speed limits
• Protection of wildlife
• Fauna and flora protection
• Technical staff
• Awareness and training
• Site abandonment and relinquishment

In order to carry out Activities in a Protected Area (other than a Full Natural Reserve), the mineral rights holder, or the National Concessionaire (ANPG) and the respective operator, in case of oil and gas exploration, must obtain a Protected Area Access Declaration from the Ministry of Environment. Provided no legal impediment exists, the Declaration is issued within 8 business days.

The Protected Area Access Declaration is valid for a period of 5 years, renewable for equal periods of time.

The companies carrying our Activities in Protected Areas must observe the following general environmental obligations (in addition to those described above):

• Install infrastructure and equipment in accordance with the requirements of environmental legislation;
• Use surface and underground water also in accordance with the requirements of environmental legislation;
• Provide financial (and other) support to programs for conservation and protection of biodiversity;
• Protect the wellbeing and cultural heritage of local communities;
• Implement plans to prevent and fight forest fires;
• Carry out an environmental audit prior to relinquishing the area;
• Bear any costs of environmental restoration of the area, including environmental impact studies, environmental licensing and audits.

Companies are subject to the general surveillance of the Ministry of Environment and the Ministry of Natural Resources, Petroleum and Gas, together with the respective Regulatory Agencies;

Companies must submit quarterly reports on mitigating environmental measures adopted to the following entities:

• Ministry of Environment;
• Ministry of Natural Resources, Petroleum and Gas;
• National Institute of Biodiversity and Conservation (Instituto Nacional de Biodiversidade e Conservação);
• National Agency for Petroleum and Gas (ANPG);
• National Agency for Mineral Resources (Agência Nacional de Recursos Minerais);
• Provincial Government of the exploration site.

The fees charged for environmental licensing of Activities carried out in Protected Areas are allocated as follows:

• 40% for the Treasury;
• 30% for the National Institute of Biodiversity and Conservation;
• 20% for the National Environment Fund;
• 10% for the local communities.

The fines applied for violation of the Regulations are allocated as follows:

• 40% for the Treasury;
• 20% for the National Institute of Biodiversity and Conservation;
• 20% for the National Environment Fund;
• 10% for the local communities;
• 5% for the agent who applied the fine;
• 5% for the person who reported the infraction (if applicable).

Rui Amendoeira, OneLegal Partner.

Law 8/20, of 16 April 2020, – the “Environmental Protected Areas Regulations” – created a National Network of Protected Areas (Rede de Áreas de Conservação Ambiental). Regulations of Law 8/20 have now been enacted by way of Presidential Decree 50/24, of 2 February 2024. Below are the Regulations highlights:

• Protected Areas may be created in any part of Angolan territory and the Economic Exclusive Zone by proposal of the Ministry of Environment. A Protected Area must be instituted by way of a statute;
• Protected Areas are classified as follows:

(i) Natural Reserves;
(ii) Natural Parks;
(iii) Natural Monuments;
(iv) Habitat or Species Management Sites;
(v) Protected Landscape.

• Natural Reserves are sub-classified as follows in terms of the human occupation and economic activities that may be carried out therein:

(i) Full Natural Reserve – No human occupation may exist;
(ii) Partial Natural Reserve – Human occupation and economic/military activities may exist, except hunting and fishing;
(iii) Special Natural Reserve – No human occupation may exist, except for sustainable activities in support of local communities.

• No hunting, fishing or natural resources extraction activities can be carried in Natural Parks, except for scientific purposes or a State’s strategic economic activity.
• Natural Monuments include trees, lakes, rocks or mountains with an important ecologic, aesthetic, historical or cultural value.
• Habitat or Species Management Sites include swamps, wetlands, river estuaries, reservoirs, bays and coastal areas in general.
• Natural Reserves and Natural Parks are administered by the Ministry of Environment.
• Natural Monuments, Habitat or Species Management Sites and Protected Landscape are administered by the Provincial Governments or municipalities.
• Protected Areas may be open to ecotourism activities, except Full Natural Reserves.
• Ecotourism activities are subject to 15-year concession contracts for National Parks, and 10-year concession contracts for Natural Reserves.
• Certain public infrastructures may be build/installed in Protect Areas, including electricity transmission lines, telecom antennas, wildlife observatories, tourism piers, border control installations, gas stations, airstrips, roads, etc.
• The following constitute serious violations of a Protected Area:

(i) Illegal exploitation of natural resources;
(ii) Unauthorized hunting;
(iii) Commercial fishing;
(iv) Large scale deforestation;
(v) Carbon extraction;
(vi) Industrial/large scale agriculture;
(vii) Forest fires;
(viii) Any corrupt activities.

• Each Protected Area must adopt a symbol from a representative species of the area.
• Protected Areas must be clearly marked and identified, and may be fenced in certain circumstances.
• Each Protected Area is ruled by a 10-year Management Plan.
• Each Protected Area has its own budget funded by the following resources:

(i) Allocations from the State Budget;
(ii) Fines;
(iii) Fees, including from ecotourism concessions;
(iv) Gifts and donations;
(v) Other revenues from national/international protocols and agreements aimed at promoting biodiversity.

Rui Amendoeira, OneLegal Partner.