Luanda - Angola approved on Thursday a new Legal and Fiscal Regime for Incremental Production of Petroleum Concessions in the Maritime Zone that reduced the Petroleum Income Tax rate from 65.75 percent to 55.75 percent.
The legal tool, which authorizes the Angolan president to legislate on this matter, was approved Thursday by the National Assembly, with the aim to define the rules that regulate research and development activity in the oil sector and the crude oil output increase in the country.
The law establishes a tax regime for the costs of carrying out hydrocarbon research and development activities and legislates a reduction in the rate of Oil Production Tax from 20 percent to 15 percent for association contracts.
It also aims to expand the economic activity of new projects in fields located in mature (old) blocks and to increase oil production, reducing the rate from 50 percent to 25 percent in Association and Production Sharing contracts.
José Barroso, Secretary of State for Oil and Gas, said most of the country's oil fields have been in existence for more than 20 years, having produced more than 70% of the estimated volume, which causes production to decline due to the lines becoming bogged down.
The State Minister recalled that the tranches of mature fields represent a profit for the state of around 80 and 90 percent, with the remainder going to the contractor group, which discourages operators to continue production, opting instead for projects with shorter cycles.
José Barroso stressed that this distribution of profits represents an investment risk and impairs the emergence of more operators.
According to José Barroso, a study carried out by the National Oil, Gas and Biofuels Agency (ANPG) points to the need for a fiscal legal regime that encourages and enables investment in incremental production in mature fields, research in under production concessions to mitigate production decline.
The official stressed that the sustainability of production depends on attracting new investment.
According to the ANPG, from January to December 2023, Angola's annual oil production was 400.72 million barrels, with an average daily production of around 1.098 million barrels. ML/QCB/TED/AMP
