Angola: Angola Petroleum Reforms Signal Improved Investment Opportunities

Last Updated: 27 October 2016
Article by   Orrick

Peter Roberts, Head of Orrick's Global Oil & Gas practice, authored an article for African Business Review on how Angola is coping with the current slump in oil prices through reforms designed to attract new investors.

As West Africa battles to contend with the long-term slump in oil prices, one nation in particular is seeking to make the best of a bad situation. 

With production levels second only to Nigeria in the long-term ranking of African oil producers, Angola is one of Africa's most oil dependent nations. Daily production of crude oil in the country is around 1.6 million barrels, and last year oil accounted for more than 95 percent of its export income. 

As a result, the sustained downturn in oil prices has had a predictable effect on Angola's economy, with a serious shortfall in expected income for the government leading to difficulties for the domestic economy. In April 2016, Angola requested a significant bailout from the IMF to help cope with the economic fallout (although it called off talks with the IMF three months later), on the back of a $650 million rescue package from the World Bank in 2015.

However, the Angolan government has not been content to rely solely on supra-national financial aid. Instead, it has taken a highly proactive approach to finding domestic solutions to its oil market woes. 

Aside from a wider commitment to diversifying Angola's economy away from its overwhelming dependence on oil in the longer term, and introducing cuts in government spending, the government has also undertaken an ambitious programme of regulatory reforms. These reforms, designed to renew international appetite for investment into Angola's upstream sector, are underpinned by the twin imperatives of implementing crucial organisational reforms and improving fiscal terms for would-be investors. 

A particular hallmark of this plan is the recognition that international oil companies have also suffered from low oil prices, with reduced budgets for exploration and production investment. The government has therefore sought to attract scarce petro-dollars into the country through announcing reforms that are intended to make the sector more attractive to embattled oil companies in need of a lifeline.

Organisational reforms

Over the years, some commentators have suggested that the Angolan upstream regime suffered from a damaging lack of transparency, with the state oil company ( Sonangol E.P.) exercising a de facto regulatory role and also being engaged in a number of competing activities. This changed with Presidential Decree 109/16, which imposed a model for the reorganisation of the Angolan petroleum sector reflecting two important features.

The first of these was the reiteration of Sonangol E.P.'s role as the grantor of concessions for petroleum exploration and production, but with the removal of Sonangol E.P.'s ability to be involved in petroleum exploration, production and operational activities. The second was the creation of a new inter-ministerial petroleum sector agency with responsibility for general petroleum sector coordination, the preparation of licensing rounds and the resolution of disputes between different stakeholders in the sector.

Although the creation of a new regulatory agency and the rationalisation of Sonangol E.P.'s role had been trialled as far back as 2011 (when the Angolan government published its National Energy Security Policy and Strategy (NESPS)), it took a financial crisis and an oil price collapse to propel the idea from concept to reality.

Fiscal terms

In respect of the revision of fiscal terms to make for a more attractive investment landscape for international oil companies, two sets of regulations were recently published which could have far-reaching effects.

First, new rules were enacted in Presidential Decree 211/15 in December 2015, intended to promote the development of new commercial discoveries within existing concession areas by helping companies to recover their exploration costs faster. But the most noteworthy regulatory development was the introduction of Presidential Decree 2/16 in June 2016. 

This Decree went one step further by providing for the adjustment of contractual and fiscal terms in existing concessions in order to better promote the development of marginal fields.  Perhaps inspired by Nigeria's marginal fields licensing round of 2013, Decree 2/16 recognised that a number of exploration companies had previously made discoveries that they regarded as marginal (that is to say, not viable for economically efficient development under current fiscal terms). It therefore provided that if a discovery qualified as 'marginal' for the purposes of Decree 2/16, then certain tax and fiscal incentives could be agreed which could render the marginal discovery an economically recoverable prospect.

It may seem paradoxical that the Angolan government has undertaken significant reforms to attract new investments, at the same time as declaring an intention to diversify away from an over-reliance on the petroleum sector. However, this paradox recognises that Rome was not built in a day. The Angolan government is trying to manage immediate and longer-term sector reforms simultaneously, for which it deserves credit. 

As with any programme of regulatory reform, the proof will be in the outcome. Existing concession-holders and prospective new entrants will be keen to see how the new Sonangol E.P. and the new regulatory agency function, and how the two new Presidential Decrees are negotiated to apply in practice.  Cynics will say that change was long overdue in Angola, and that the changes that have taken place were the product of dire economic necessity. The fact remains that change has nevertheless come. Other oil and gas producing economies across Africa's Atlantic margin will be watching carefully to see how well Angola makes the transition from theory to practice.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

Events from this Firm
1 Oct 2019, Other, Washington, DC, United States

Orrick is proud to host the AIPN for its final breakfast meeting of 2019 for a session titled “Helping the World Gasify”. As natural gas production and use is very unevenly distributed throughout the world, often gas produced in association with crude oil is sold below cost or flared.

25 Nov 2019, Speaking Engagement, New York, United States

Lorraine McGowen will be speaking on the upcoming “Evaluating the Financial Health of an Entity” panel at the New York session of the Pocket MBA: Finance for Lawyers and Other Professionals program, hosted by the Practising Law Institute.

2 Dec 2019, Speaking Engagement, New York, United States

Evan Hollander will co-chair the Practising Law Institute’s annual Nuts and Bolts of Corporate Bankruptcy this year.

Some comments from our readers…
“The articles are extremely timely and highly applicable”
“I often find critical information not available elsewhere”
“As in-house counsel, Mondaq’s service is of great value”

Related Topics
Related Articles
Up-coming Events Search
Font Size:
Mondaq on Twitter
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of

To Use you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions