NEW PETROLEUM LAW

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NEW PETROLEUM LAW

• Presentation by
• CHINDALENA LOURENÇO

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NEW PETROLEUM ACTIVITIES LAW (PAL)

• Law 10/04 of 12 November 2004
• Effective on 16 November 2004 (Luanda) or 27
  November 2004 (other Provinces)
• Purpose
• Consolidating in a single statue the principles
  that flow from the previous Petroleum Law, the
  existing concession decrees and EP contracts as
  well as the industry practice developed through
  out the years in Angola

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NEW PETROLEUM ACTIVITIES LAW (PAL)

• Applicability of the PAL
• Article 97 expressly repeals previous Petroleum
  Law (Law 13/78, of 26 August, 1978).
• Articles 92.3 and 89.4 provisions on security
  of the maritime and concessionary public domain,
  taxation, environment and supervision of
  petroleum operations are immediately applicable
  to all concessions (existing and future).

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NEW PETROLEUM ACTIVITIES LAW (PAL)

• Applicability of the PAL
• Grandfather protection Article 92.1 PAL
• Rights acquired under petroleum concessions and
  temporary prospecting licenses, which have been
  validly entered into by the National
  Concessionaire and are effective at the date of
  entry into force of this law, shall continue to
  be fully valid and effective, so as to protect
  contractual stability, without prejudice of the
  provisions of the following paragraphs.
• Article 92.2 existing contracts (PSAs, etc) may
  be renegotiated to adjust to PAL requirements.

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NEW PETROLEUM ACTIVITIES LAW (PAL)

• Main changes
• Regulatory powers/responsibilities of MinPet are
  significantly expanded.
• MinPet has the right to mandate the allocation of
  facilities/equipment from one concession to
  another concession.
• MinPet may unilaterally change schedule
  production rates and mandate production volumes.

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NEW PETROLEUM ACTIVITIES LAW (PAL)

• Main changes
• Oil companies have more limited rights of direct
  access to MinPet to discuss/resolve outstanding
  concession issues.
• In case of nationalisation/expropriation of
  concessions, no criteria is defined to calculate
  compensation to oil companies.
• Angolan companies who are members of Contractor
  Group have secondary right of first refusal in
  case of farm-out by foreign oil company.

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NEW PETROLEUM ACTIVITIES LAW (PAL)

• Main changes
• Angolan government is required to take measures
  to promote participation of indigenous companies
  in petroleum activities.
• Oil companies must hire Angolan citizens for all
  positions, unless no Angolans exist with required
  qualifications and skills.
• No discrimination is permitted between employment
  terms for Angolan employees and expatriate
  employees, including as regards salary.

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Thank YouChindalena.Lourenco_at_FatimaFreitas.com