Angola is set to implement major reforms within its petroleum industry in order to boost the sector’s growth in 2019. Some of the reforms will include changes in tax law to changes in concession contracts and the opening of marginal fields to African independents.
Key measures include the formation of taskforces that will ensure the new rules are adhered to, the privatization of some Sonangol subsidiaries (which are parastatals that oversee petroleum and natural gas production in Angola), and the creation of a new regulator to manage concessions.
The measures are already attracting interest from investors and establishing confidence in the administration.
Angola’s economy is set for recovery in 2019, due in part to a series of regulatory reforms opening the country to new investment.
Since entering office in 2017, President Joao Lourenco has focused on cleaning up corruption and implementing aggressive reforms to transform the oil and gas sector and the economy.
The reforms, which span from deep changes in tax law to changes in concession contracts and the opening of marginal fields to African independents, have hit the books just as the oil price is stabilizing, and Angola is already attracting new interest from investors.
By December 2018, several new laws have been enacted, including: The Natural Gas Regulatory Framework, which establishes policies for the monetization of natural gas (both associated and non-associated gas) in existing and new concessions.
Another new law includes incentives for investments, which vary from tax reforms to contract reforms, to encourage economic exploration and development of natural resources.
Finally, the country has ensured improved terms to better allow for exploration within development areas in existing blocks.
Considered one of the most important changes to Angola’s oil and gas sector, an independent regulator has been created to manage the country’s oil and gas concessions, which were previously handled by the state-owned Sonangol.
The measures appear to be working since the World Bank’s economic outlook for Angola released in December 2018 predicts GDP will grow by 1.7% in 2018 and 2.2% in 2019. This will be the first time the country will have seen positive growth since 2014. An improved investor environment is listed as a cause for the improvement.