OneLegal is pleased to announce that two new law firms have joined the leading legal platform for the Portuguese speaking market. They are Brazilian law firm “Schmidt, Valois, Miranda, Ferreira & Agel” (“Schmidt Valois”) and Portuguese law firm “MC&A”.

Schmidt Valois (https://svmfa.com.br/) – Schmidt Valois is recognized in Brazil and internationally as a leading law firm in the area of natural resources and infrastructure, having a particular focus in the oil and gas, energy and mining industries. While Brazil is one of the world’s largest oil producers, Schmidt Valois is a trusted legal advisor to oil companies, contractors, financing entities and investors in general, along with public sector entities. Several Schmidt Valois partners and associates are recognized as leading experts in the oil and gas and energy industry in Brazil by the leading international legal directories, including Chambers & Partners, Leaders League, Latin Lawyer, LACCA, Who’s Who Legal, Legal 500, among others.

Schmidt Valois has offices in Rio de Janeiro and São Paulo. It is comprised of 18 partners and a total of 50 lawyers and other professionals.

MC&A (https://legalmca.com/pt) – MC&A has a recognized expertise in business and corporate law, with a particular focus in the lusophone markets. It was founded by its managing partner Vitor Marques da Cruz who has more than 40 years’ experience advising on complex M&A and financing transactions in infrastructure, oil and gas, energy, banking and other industries. He is recognized by the international legal directories as one of the leading Portuguese lawyers in the African market.

By joining OneLegal, Schmidt Valois significantly expands its activity in the lusophone/African markets and further reinforces its strong international credentials. The OneLegal association will allow Schmidt Valois to offer to its Brazilian and international clients best of class legal services in Angola, Mozambique, Timor-Leste, Cape Verde, São Tomé and Príncipe, as well as Portugal. Schmidt Valois can further support its clients in cross border projects and transactions in the lusophone markets and beyond.

As a OneLegal member MC&A will streghten its offering in the lusophone/African markets which is the focus of the firm and its founding partner Marques da Cruz.

OneLegal founder Rui Amendoeira stated that “By adding a Brasilian law firm to our list of partners, OneLegal now covers all lusophone countries, except for Guiné Bissau. This is a significant expansion of the OneLegal footprint and further reinforces our position as a leading source of legal services in the lusophone world.”

As advised earlier, Angola (through its petroleum regulator ANPG) is promoting a new licensing round for onshore blocks in the Lower Congo and Kwanza basis (the “2023 Licensing Round”). A total of 12 blocks will be awarded, designated as KON1, KON3, KON7, KON10, KON13, KON14, KON15, KON19, CON2, CON3, CON7 and CON8), and located as depicted below:

Yesterday (19 June 2023) ANPG made the first presentation session of the 2023 Licensing Round at a hotel in Luanda. The presentation was widely attended, both in person and online, by potential investors and other stakeholders of the Angolan oil industry.

The following schedule was announced by ANPG:

• 30 September 2023 – Terms of Reference and Tender Procedures will be announced.
• 9 November 2023 – Deadline for submission of bids.
• 10 November 2023 – Bids are opened by the Tender Committee.
• 25 December 2023 – Deadline to evaluate the bids by the Tender Committee.
• 15 January 2024 – Bid results are announced.
• 19 March 2024 – Deadline to conclude negotiation of the contracts (Production Sharing Contracts)

Additional information can be obtained in the ANPG website www.anpg.co.ao. 

For any questions, please contact Rui Amendoeira at rui.amendoeira@onelegal.pt

Rui Amendoeira – OneLegal Partner

As part of its strategy to stimulate investment in new exploration and in mature oil fields, the Angolan government has approved a package of tax incentives to oil blocks during the current year of 2023. The incentives have been extensive and applicable to multiple blocks. As it may be difficult to keep track of all incentives granted, we prepared the following table with summarizes the blocks concerned and the level of tax incentives extended to each block. We hope this is helpful!

Oil Blocks 2023 Tax Incentives:

Rui Amendoeira – OneLegal Partner

The fiscal terms applicable to Blocks 30, 44 and 45 in the Namibe Basin, Angola, have been amended and improved through Presidential Decrees 109/23, 110/23 and 111/23, of 3 May 2023. This follows a Memorandum of Understanding signed on 14 March 2023 between Angola’s national concessionaire and regulatory body, the National Agency for Oil, Gas and Biofuels (ANPG), national oil company Sonangol and U.S. supermajor ExxonMobil. ExxonMobil is the operator of the blocks with a 60% participating interest in the respective Risk Service Contracts (RSC), with Sonangol retaining a 40% interest.

The new, improved terms are as follows:

• Investment Premium – 40% on all amounts invested and capitalized in each fiscal year from 1 January of the year of commencement of production;
• Production Premium – A percentage on the volumes of oil and gas used to calculate gross income as follows:

South African oil company Sasol has recently announced the discovery of natural in area PT5-C, located in the southern part of Inhassoro District, Inhambane Province, Mozambique. This discovery was made following the drilling (between 25 March – 5 April) of the Bornito-1 exploration well which reached a maximum depth of 1934 meters in lower cretaceous sediments. This was the second well drilled in the area, and the first successful as the first drilled well – Dourado-1 – did not find any hydrocarbons.

The following is a brief summary of some key legal and contractual terms which support the PT5-C license:

• The license was given under “Concession Agreement for Exploration and Production” signed on 17 October 2018 following Mozambique’s 5^th Licensing Round.
• The concession holders are Sasol Mozambique PT5-C Ltd, the operator with a 70% participating interest, and Mozambique’s parastatal oil company Empresa Nacional de Hidrocarbonetos, E.P. (ENH) with a 30% free carry interest.
• The concession area has a size of about 3012 km2 and is located between the Pande and Temane fields.
• The discovery was made within the first exploration sub-period which has a maximum duration of 48 months. A second and third exploration sub-periods will follow, with a maximum duration of 24 months each, for a total exploration term of 8 years.
• The minimum work commitments for the exploration period are as follows:

First sub-period (48 months):

• Acquisition of 1.600km of 2D seismic data
• Drilling of 2 exploration wells
• Seismic studies worth a minimum of USD 5 million

Second sub-period (24 months):

• Drilling of 1 exploration well
• Seismic studies worth a minimum of USD 5 million

Third sub-period (24 months):

• Drilling of 1 exploration well
• Seismic studies worth a minimum of USD 5 million

Cost recovery is capped at 60% of Disposable Petroleum (Cost Petroleum).

• Profit Petroleum is shared between the Government and the Concessionaire in accordance with the following scale:

• Production Bonuses are due to be paid by the Concessionaire to the Government at the following events:

The Angolan government has just approved an Operational Framework for Sustainable Finance (the “Framework”) through Presidential Decree 106/23, of 2 May 2023. The Framework was developed in the context of Angola’s commitment to the United Nations Sustainable Development Goals (SDG) and closely follows international standards and best practices, including the Green Bond Principles, the Social Bond Principles and the Sustainability Bond Guidelines of the International Capital Market Association (ICMA) and the Loan Market Association (LMA).

Below is an outline of the Framework:

1- Objective: The Framework is aimed at ensuring that Angola’s recourse to international financing is done through sustainable debt instruments which are aligned with the country’s environmental and social strategies.

2- Types of Debt Securities: Under the Framework, Angola may issue the following types of sustainable international bonds and other debt securities:
– “Green Format” – To support environmental projects;
– “Social Format” – To support social projects;
– “Sustainable Format” – To support environmental and social projects.

3- Eligible Projects: The types of eligible projects that may be financed through these instruments include the following:

Green Projects
– Renewable energy;
– Pollution prevention and control;
-Environmental protection;
– Sustainable water use;
– Sustainable oceans (blue economy)

Social Projects
– Education;
– Health;
– Basic infrastructure;
– Support of vulnerable population; 
Employment and competitiveness.

These may consist of new or existing projects. However, refinancing of existing projects should not exceed 25% of total financing raised.

4- Excluded Projects: Projects in the following areas are expressly excluded from sustainable financing under the Framework:
– Hydro plants above a set carbon intensity;
– Exploration and production of fossil fuels; 
– Railways for transportation of fossil fuels;
– Nuclear energy;
– Defense;
– Alcohol, arms, tobacco and gambling/gaming;
– Deforestation;
– Any environmentally harmful or illegal activities.

5- Project selection: Project selection is done by an “ESG Inter-ministerial Committee” (ESG Committee). All projects must be included in the government’s Annual Budget.

In order to be selected, projects must be:

• Aligned with Angola’s National Development Plan;
• Economically and environmentally viable;
• Technically sound;
• Impactful on the population;
• Assessed for their legal, financing and operational risks.

6- ESG Committee: The ESG Committee is responsible for managing the international sustainable financing program under the Framework, including selecting eligible projects, approving costs/estimates, allocating funds, producing reports etc..The ESG Committee is chaired by the State Minister for Economic Affairs, and includes the Finance Minister and the Economy and Planning Minister.

The ESG Committee will hold an annual meeting to approve eligible projects and another meeting to prepare an annual report.

7- Reporting: The government will produce annual reports to investors on the progress of financed projects, including the following information:

• Summary/description of such projects;
• Funds allocated to each project;
• Ratio new projects/refinancing of existing projects;
• Reallocation of resources, if any;
• Co-financing, if any.
• The reports will be audited by an independent external firm.

8- Compliance: Moody’s affiliate V.E. (formerly Vigeo Eiris) was appointed to assist in the Framework development, implementation and compliance.

Presidential Decree 95/23, of 6 April 2023, enacted the Legal Regime on Electronic Delivery of Tax Notifications and other Communications. Below is a summary of the Regime:

• The Regime is applicable to the electronic delivery of notifications and other forms of communications between the Tax Administration and the taxpayers, including in tax enforcement proceedings. The Regime is also applicable to the electronic submission of tax returns;
• The Regime is mandatory for the following taxpayers:

1. Companies that are included in the list of LargeTaxpayers;
2. Taxpayers with an annual turnover exceeding AOA 50 million (roughly USD 100,000);
3. Owners of real estate, aircraft, boats, vehicles or other assets subject to Property Tax (“Imposto Predial”) or Vehicle Tax (“Imposto sobre Veículos Motorizados”);
4. Tax representatives of non-resident taxpayers.

For the other taxpayers, the Regime is optional.

• Electronic communications may be used for the following purposes:

1. Information on tax obligations and deadlines;
2. Determination of taxable income;
3. Assessment of any taxes;
4. Revision/correction of tax assessments;
5. Certificates of tax good standing;
6. Appeals from tax assessments and other decisions;
7. Collection of tax debts;
8. Tax opinions/rulings;
9. Granting or cancellation of tax incentives;
10. Tax penalties/fines;
11. Tax inspections/audits;
12. Other proceedings as permitted by law.

• Electronic communications must include a digital signature;
• Electronic communications are processed through the Taxpayer Portal. Each taxpayer is given an individual user account and password to access the Taxpayer Portal.
• Taxpayers are alerted by email and text message (SMS) of all communications delivered in the Taxpayer Portal. The email address and phone number are recorded in the Taxpayer File.
• However, all communications in the Taxpayer Portal are deemed to have been validly delivered even if no email/text alert is sent, and taxpayers are required to consult the Taxpayer Portal on a regular basis. This rule is not applicable to “small taxpayers” (with an annual turnover less than AOA 50 million);
• Electronic communications are deemed to have been delivered on the date and time indicated in the Taxpayer Portal;
• For purposes of any legal deadline for a taxpayer to take an action or exercise a right, such deadline will start after 5 days from delivery of the notification/communication in the Taxpayer Portal. The deadline will end at 24:00 hours of the last day;
• In case the electronic communication is incomplete, the taxpayer is required to collect the respective paper-based document at the Tax Office;
• Electronic communications sent by the Tax Office and the taxpayer have the same legal standing/validity as any paper-based communications;
• Tax returns and other documents must be submitted electronically by the taxpayers;
• Electronic communications must be preserved by the Tax Office for a minimum period of 5 years after they are generated;
• Taxpayers who fail to comply with the Regime are liable to a penalty of 10% of the value of the respective tax. 

The Angolan petroleum regulator and National Concessionaire ANPG has announced that it will launch a licensing round for new acreage in the onshore basins of Lower Congo and Kwanza (the “2023 Licensing Round”). This is a summary of the 2023 Licensing Round process in a Q&A format:

When will the 2023 Licensing Round officially start? – On 30 September 2023.

How many blocks will be awarded? – A total of 12.

Where are the blocks located? – 8 blocks are located in the onshore Kwanza basin (KON1, KON3, KON7, KON10, KON13, KON14, KON15 and KON19) and 4 blocks in the onshore Lower Congo basin (CON2, CON3, CON7 and CON8). The blocks are depicted in the following map:

Where can technical/geological information about the blocks be obtained? – Information can be obtained virtually or in person by application through the ANPG website www.anpg.co.ao.

Will international companies be able to bid? – Yes, the licensing round is open to both Angolan and foreign companies.

Bids must be submitted by what date? – 4 November 2023.

When will the Terms of Reference be known? – On 30 September 2023.

What type of contract will be used? – Not announced yet, but likely Production Sharing Contract.

What information must the bid include? – All bidders (operator and non-operator) must provide the following minimum information:

1. Name, place of incorporation/registration and head office address;
2. Main business activity;
3. Balance sheet summary, including assets, liabilities, depreciation and owners’ equity;
4. Audited financial statements for the last 3 years;
5. Bank comfort letter;
6. Detailed information on oil exploration and production (E&P) experience;
7. Information on production levels and reserves;
8. Total number of employees;
9. Management/Executive level E&P experience;
10. Litigation in the last 5 years;
11. Information on existing or future liabilities/obligations, work commitments, plans or other risks that may impact work programs under Angolan contract;
12. Past activity in Angola (if any).

What requirements must operators meet specifically? – Operator bids must show the following:

• Technical and operational experience/capacity in conducting petroleum operations;
• Efficient organizational structure;
• Good health, safety and environmental standards;
• Local content plan to hire and train Angolan employees.

Bids must be submitted in what language? – Portuguese. If a foreign language is used, a certified Portuguese translation must be provided.

What follows after bid submission? – After bids are received by ANPG, these steps will follow:

1. Bids are formally opened by a Tender Committee on the first business day after the submission deadline (4 November2023). The Committee is made of representatives of ANPG, Ministry of Petroleum and Ministry of Finance;
2. The Committee approves the valid bids. Incomplete/incorrect bids must be fixed within 10 days;
3. The Committee evaluates the bids within 45 days against the ToR criteria;
4. The Committee submits an evaluation report to ANPG and a recommendation for each block award;
5. ANPG approves the Committee recommendations within 10 days and submits same to Ministry of Petroleum;
6. Tender results/awards are notified to all bidders and published in the Official Gazette and/or national and international newspaper (and displayed in the ANPG website) within a maximum of 20 days after bid evaluation deadline;
7. Bidders that do not agree with the results/awards, may appeal to the Ministry of Petroleum within 5 days from notification. The Ministry makes final decision within 5 days;
8. A Negotiations Committee is formed to negotiate the respective contract (PSC) with the winning bidder(s). Negotiations must be concluded, and the contract initialed, within 65 days;
9. Within 20 days the Negotiations Committee submits a report to ANPG, the Ministry of Petroleum and the Ministry of Finance, along with the initialed contract;
10. The government approves the contract for each block and issues the respective Concession Decree;
11. The contract is signed and the process is concluded.

When will more information be available? – ANPG will announce in due course (and before 30 September 2023) presentation sessions and other initiatives to disclose additional information and promote the 2023 Licensing Round. We will provide updates as soon as additional information is available.

For any questions, please contact Rui Amendoeira at rui.amendoeira@onelegal.pt