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Angola Upstream Fiscal and Regulatory Report - Government Introduces Incentives to Spur Upstream Recovery

  • ID: 4601517
  • Report
  • June 2018
  • Region: Angola
  • 40 pages
  • GlobalData
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Angola Upstream Fiscal and Regulatory Report - Government Introduces Incentives to Spur Upstream Recovery

Summary

Angola Upstream Fiscal and Regulatory Report - Government Introduces Incentives to Spur Upstream Recovery, presents the essential information relating to the terms which govern investment into Angola’s upstream oil and gas sector.

Majority of upstream oil and gas activities in Angola are governed by production sharing contracts, whereby contractors engage with Sonangol, Angola’s sole concessionaire. Other types of contracts available are RSAs, under which contractors are paid through a share of production, as well as a small number of concession agreements signed decades ago.

At standard terms, Angola’s PSA regime offers mid-level returns compared to the regimes offered by regional peers. Although the undiscounted state take is higher than that offered by the PSA regime in Nigeria, Angola’s main African rival in the upstream sector, the progressive elements of the Angolan regime mean that it can allow the contractor a higher rate of return.

The report "Angola Upstream Fiscal and Regulatory Report - Government Introduces Incentives to Spur Upstream Recovery", sets out in detail the contractual framework under which firms must operate in the industry, clearly defining factors affecting profitability and quantifying the state’s take from hydrocarbon production. Considering political, economic and industry specific variables, the report also analyses future trends for Angola’s upstream oil and gas investment climate.

Scope
  • Overview of current fiscal terms governing upstream oil and gas operations in Angola
  • Assessment of the current fiscal regime’s state take and attractiveness to investors
  • Charts illustrating the regime structure, and legal and institutional frameworks
  • Detail on legal framework and governing bodies administering the industry
  • Levels of upfront payments and taxation applicable to oil and gas production
  • Information on application of fiscal and regulatory terms to specific licenses
  • Outlook on future of fiscal and regulatory terms in Angola.
Reasons to buy
  • Understand the complex regulations and contractual requirements applicable to Angola’s upstream oil and gas sector
  • Evaluate factors determining profit levels in the industry
  • Identify potential regulatory issues facing investors in the country’s upstream sector
  • Utilize considered insight on future trends to inform decision-making.
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1 Table of Contents

2. Regime Overview

3. State Take Assessment

4. Key Fiscal Terms - Production Sharing Agreements
4.1. Royalties, Bonuses and Fees
4.1.1. Bonuses and Contributions
4.1.2. Surface Fees
4.1.3. Training Fee
4.2. Cost Recovery
4.2.1. Cost Recovery Limit
4.2.2. Recoverable Costs
4.2.3. Investment Allowance (Uplift)
4.3. Profit-Sharing
4.3.1. Rate of Return Mechanism
4.3.2. Cumulative Production Mechanism
4.3.3. Price Cap Excess Fee
4.4. Natural Gas
4.5. Direct Taxation
4.5.1. Petroleum Income Tax
4.6. Indirect Taxation
4.6.1. Consumption Tax
4.6.2. Customs Duties and Fees
4.7. Incentives for Marginal Developments
4.7.1. Criteria and Application
4.7.2. Incentivized Fiscal Terms
4.8. State Participation

5. Key Fiscal Terms - Risk Service Agreements
5.1. Royalties, Bonuses and Fees
5.2. Payment in Kind
5.3. Taxation
5.3.1. Petroleum Production Tax (PPT)
5.3.2. Petroleum Transaction Tax
5.3.3. Petroleum Income Tax
5.3.4. Deduction and Depreciation
5.3.5. Production Allowance
5.3.6. Investment Allowance
5.4. Incentives for Marginal Developments

6. Key Fiscal Terms - Concession Agreement
6.1. Royalties, Bonuses and Fees
6.1.1. Bonuses and Fees
6.1.2. Petroleum Production Tax
6.2. Taxation
6.2.1. Petroleum Income Tax
6.2.2. Petroleum Transaction Tax
6.2.3. Deductions and Depreciation
6.2.4. Allowances for Petroleum Transaction Tax (PTT)
6.3. Incentives for Marginal Developments
6.4. State Participation

7. Regulation and Licensing
7.1. Legal Framework
7.1.1. Governing Law
7.1.2. Contract Type
7.1.3. Title to Hydrocarbons
7.2. Institutional Framework
7.2.1. Licensing Authority
7.2.2. Regulatory Authority
7.2.3. National Oil Company
7.3. Licensing Process
7.3.1. Licensing Rounds
7.3.2. Prequalification
7.3.3. Bidding
7.4. License Terms
7.4.1. Duration
7.4.2. Work Obligations
7.4.3. Purchasing Rights
7.4.4. Local Content
7.4.5. Management of Operations

8. Outlook

9. Appendix
9.1. References
9.2. Contact
9.3. Disclaimer

List of Tables
Table 1: Regime Overview
Table 2: Angola, Additional Contributions (US$ million), Blocks 20 and 21
Table 3: Angola, Profit-Sharing Framework, Block 20/11
Table 4: Angola, Profit-Sharing Framework, Block 05/06
Table 5: Angola, Profit-Sharing Framework, Blocks12 and 13 (2008)
Table 6: Angola, Profit-Sharing Framework, 2015 Onshore Model (Blocks CON 1, CON 5, KON 8, KON 9, KON 17)
Table 7: Angola, Profit-Sharing Framework, 2007/8Onshore Model (Cabinda Central Block)
Table 8: Angola, Profit-Sharing Framework, 1979 Model (Block 2)
Table 9: Angola, RSA Payment in Kind, Block 9
Table 10: Angola, RSA Payment in Kind, Block 21
Table 11: Angola, Production Allowance, Block 9
Table 12: Angola, Production Allowance, Block 21
Table 13: Angola, Production Allowance, Block 48
Table 14: Angola, Production Allowance under Marginal Development Regime
Table 15: Angola, Petroleum Production Tax Rates, Concession Agreements
Table 16: Angola, Investment Allowance (Deduction from PPT)
Table 17: Angola, Production Allowance (Deduction from PPT)
Table 18: Angola, Production Allowance under Marginal Development Regime
Table 19: Angola, Representative Contract Periods
Table 20: Angola, Local Procurement Regimes (Decree 127/03)
Table 21: References

List of Figures
Figure 1: Regime Flow Chart - Production Sharing Agreements
Figure 2: Regime Flow Chart - Risk Service Agreements
Figure 3: Regime Flow Chart - Concession Agreements
Figure 4: Angola, Indicative NPV10/boe, IRR and State Take Comparison - Regional
Figure 5: Angola, Indicative NPV10/boe, IRR and State Take Comparison
Figure 6: Angola, Institutional Framework
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