ICLG - Oil & Gas Laws and Regulations - Angola Chapter covers common issues in oil and gas laws and regulations – including development of oil and natural gas, import/export of natural gas, LNG, import/export of oil, transportation, transmission and distribution and foreign investment.
Angola has around 300 billion cubic metres of proven natural gas reserves (information available on the 2022 Annual Statistical Bulletin of the Organization of the Petroleum Exporting Countries (“2021 Annual Bulletin”)). Historically, most of the natural gas was re-injected into oil fields (“Jazigos Petrolíferos”) to help recovery, or simply flared off as a by-product of oil operations. The first exportation of LNG took place in June 2013. Some of the major players in the sector have announced their plans to start exporting non-associated natural gas in 2025.
Based on data gathered by the United Nations Development Programme, despite being the second-largest economy in Sub-Saharan Africa in terms of GDP, around 32% of Angolans live below the poverty line. Natural gas, nuclear and other renewable energies – except for hydropower – still occupy a small percentage of Angola’s primary energy consumption. Approximately 25% of Angola’s electricity is produced from LNG.
The development of the natural gas market is headed by Angolan LNG. To the best of our knowledge and based on informal research, there is no official Government information about natural gas imports. It is estimated that about 90% of natural gas used is produced by the Angola LNG Project.
According to the 2022 Annual Bulletin, Angola’s natural gas exports saw a big increase compared with 2021, from 627.6 to 5,084 million cubic metres. The official data for 2023 has not yet been revealed, however, due to the war between Russia and Ukraine, Angola’s exportation increased, and has allowed Angola to enter into new markets other than India. Further, in June 2024, Angola LNG reached a milestone of its 400th shipment. Further, the Minister clarified that in the fourth quarter of 2023, the exportation of gas was more than 1 million metric tonnes and 72.49% of the amount corresponded to LNG.
According to the 2022 Annual Bulletin, Angola produced approximately 1.124 million barrels per day of crude oil. The Government expects an annual average production of 1.18 million barrels per day in 2023. Only approximately 4.7% of power is produced from oil. However, to the best of our knowledge, there is no official data publicly available to answer this question.
Angola’s oil demands are of approximately 100,000 barrels per day. However, Angola continues to spend more than USD 2 billion annually on oil imports. Although Angola is a significant producer, it still imports a substantial portion of the petroleum it consumes, particularly refined products. The Angolan Government plans to reverse the deficit in domestic oil derivatives production, having projected the construction of three different refineries (located in Cabinda, Soyo and Lobito) with the accumulated refining capacity of 360,000 barrels of crude oil per day. The construction works of the Cabinda project have already begun; they are currently in the development stage and are planned to be in operation by the end of 2023.
The Secretary of State clarified that in the fourth quarter of 2023, the exportation of gas was more than 1 million metric tonnes and 72.49% of the amount corresponded to LNG.
The statutory framework for the exploration and production of oil and natural gas reserves is fundamentally provided in the Petroleum Law and the Petroleum Regulation. Other relevant statutes are, amongst others, the following:
Under the applicable law, i.e., the Petroleum Law, mineral rights are granted to the National Concessionaire. The National Concessionaire, in order to share its technical knowledge and financial capability, may associate with Angolan or foreign entities of recognised capacity. Such association may take the following forms:
Although the most common type of association with the National Concessionaire is the execution of Production Sharing Agreements, there is at least one example of a Risk Services Agreement entered into with the National Concessionaire.
As mentioned above, the mineral rights in Angola are owned by the State, the public ownership of all rights and benefits arising from the oil industry being noteworthy.
As per the information published by the Angolan Tax Authority, the State has received almost USD 15 billion from taxes levied on the export of oil in 2022. Further, the secretary of State stated that in 2023 Angola exported approximately 386.42 million barrels of crude oil, valued at approximately USD 31.4 billion dollars. Pursuant to Law 13/04, all entities, both national and foreign, which carry out petroleum operations on national territory, are subject to the payment of the following taxes:
Additionally, ANPG is the Concessionaire of mining rights in Angola; therefore, it is a part of all Production Sharing Agreements executed in Angola. As such, ANPG is contractually entitled to receive part of the profits made under the terms and conditions established in each Production Sharing Agreement.
According to article 8 of Law 11/04, the “exportation of petroleum produced in each petroleum concession, either in its natural state or after having been processed, is exempt from duties and general customs service fee”.
The assignment of a contractual position in the exploration and production concession agreement requires the prior authorisation of the MIREMPET, provided that the transferee is of proven competence, and technical and financial capability, unless the assignment is made between subsidiary companies of the transferor. In the event that such assignment is authorised, ANPG has a pre-emption right. If ANPG does not exercise this right, Angolan companies that are a party to other concession agreements at the time of the transfer are entitled to exercise such pre-emption right.
A bank guarantee ensuring fulfilment of the work obligations undertaken in prospecting licences and oil concessions is required. In the case of a prospecting licence, the amount of the guarantee shall be 50% of the value of the estimated work. As for the associates of the National Concessionaire (“Associates”), the guarantee shall correspond to the value attributed to the mandatory work schedule of the oil concession. The National Concessionaire may also require its Associates to present a parent company guarantee.
Under the Constitution, the State is the owner of all national resources within the Angolan jurisdiction. As such, all oil fields and gas in the onshore and offshore areas of Angolan territory, in internal waters, in the territorial sea, in the exclusive economic zone and on the continental shelf belong to the public domain of the Angolan State, all being mining rights exclusively assigned to the National Concessionaire. Although the Angolan State is the sole and legitimate owner of all mineral rights, Law 11/2021 of 22 April has introduced a new legal framework in Angola, which establishes the possibility of creating security over mineral or oil resources that have not yet been extracted, even if only to finance their respective exploration or extraction.
According to Law 5/98 of 19 July (“Environmental Law”) and to Decree 39/00 of 10 October (“Environmental Protection from Oil Activities Regulation”), all projects to be developed within the scope of the oil and gas sector require the presentation of various reports and studies. The most important report is an Environmental Impact Assessment (“Avaliação de Impacte Ambiental” or “AIA”). Angola has ratified the following international treaties related to safety and environmental protection for oil and gas activities:
Oil field operators are subject to strict rules regarding health and safety (“HSE”) measures to be taken in order to ensure the quality of life of their employees.
The Angolan Government is still focused on developing the petroleum sector (a new strategy for exploration was approved in 2020). However, in 2020, a project of nearly USD 600 million was unveiled for the construction of photovoltaic solar stations with a combined production capacity of 370 megawatts. Although there is increasing concern for the development of renewable sources in Angola, a true policy of decarbonisation is yet to be approved. In 2020, Angola ratified the Paris Agreement. The use of low-carbon hydrogen is not yet regulated in Angola.
Activities regarding the import, entry, export and dispatch of petroleum products and crude oil are subject to licensing, as per Law 28/11 of 1 September 2011 (“Oil & Gas Distribution and Commercialisation Law”). The import of petroleum products into the national market is regulated by the recently created Instituto Regulador de Derivados de Petróleo (“IRDP”). There are currently no specific rules that apply to cross-border sales or deliveries of natural gas. Such activities are regulated by contract between the parties. An export permit issued by the Ministry of Commerce is, however, required to export natural gas. The exportation of oil derivatives is subject to prior authorisation.
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