Oil and Gas in Africa Brochure (606962576 - 3)

Oil and Gas in Africa
Structured guides to market entry
December 2017
Table of Contents
Conducting Oil & Gas Activities in:
1. Angola ............................................................................................................................................................................ 2
2. Benin .............................................................................................................................................................................. 5
3. Cameroon....................................................................................................................................................................... 8
4. Chad ............................................................................................................................................................................. 12
5. Democratic Republic of Congo ..................................................................................................................................... 16
6. Egypt ............................................................................................................................................................................ 20
7. Equatorial Guinea ......................................................................................................................................................... 24
8. Gabon .......................................................................................................................................................................... 28
9. Ghana .......................................................................................................................................................................... 33
10. Guinea .......................................................................................................................................................................... 37
11. Ivory Coast ................................................................................................................................................................... 41
12. Kenya ........................................................................................................................................................................... 46
13. Libya ............................................................................................................................................................................. 51
14. Malawi .......................................................................................................................................................................... 54
15. Mauritania..................................................................................................................................................................... 57
16. Morocco........................................................................................................................................................................ 60
17. Mozambique ................................................................................................................................................................. 64
18. Namibia ........................................................................................................................................................................ 67
19. Nigeria .......................................................................................................................................................................... 71
20. Republic of Congo ........................................................................................................................................................ 75
21. São Tomé & Príncipe ................................................................................................................................................... 79
22. Senegal ........................................................................................................................................................................ 82
23. Sierra Leone ................................................................................................................................................................. 86
24. Togo ............................................................................................................................................................................. 90
25. Uganda ......................................................................................................................................................................... 93
i
Introduction
Africa has been, and remains, one of the most dynamic continents for oil and gas investment and development. Due to the
recent fall in global commodity prices the pace of progress momentarily dipped, but we are now seeing a renewed vigour in
international and local companies reinvesting in African oil and gas.
It is important for country entrants to understand the key issues that may affect a decision to invest in a jurisdiction for the first
time. These structured guides are intended to give a snapshot of some of the key regulatory, fiscal and legal issues that are
likely to be key in making such a decision.
CMS has been active in Africa for over 50 years, advising across major industry sectors and in particular the oil and gas and
energy space. Working with CMS in Africa, our clients benefit from the specialised experience of our market-leading practices
and a one-stop approach to providing high quality, coordinated and multi-jurisdictional legal advice.
CMS has offices in Algeria, Morocco and Angola, a longstanding network of local correspondents in over 25 countries and
specialist Africa–focused teams in France, Germany, Portugal, Singapore, the Middle East and the UK. We are able to offer
Arabic, English, French, Spanish and Portuguese language services and advise on a number of local jurisdictions and legal
systems.
If you would like any additional, detailed information on any of these jurisdictions (or others) in Africa, please contact us.
Bob Palmer Mick McArdle

Partner, Oil & Gas (London) Associate, Oil & Gas (London)
T +44 20 7367 2656 T +44 20 7367 3956
E bob.palmer@cms-cmno.com E mick.mcardle@cms-cmno.com
Jean-Jacques Lecat Tiago Machado Graça

Partner, Africa Practice (Paris) Lawyer, Africa Practice (Lisbon)
T +33 1 47 38 56 82 T +351 21 095 81 88
E jean-jacques.lecat@cms-bfl.com E tiago.graca@cms-rpa.com
1
Angola
Conducting oil and gas activities in Angola
Laws and regulations Are there any foreign investment approval

requirements or restrictions when commencing
List the main legislation governing petroleum business in your country (e.g. a minimum local
exploration and production activity in your country. shareholding in the entity undertaking the activity)?
― Law no. 10/04 of 12 November (“Petroleum Companies that wish to carry out petroleum activities in
Activities Law”) Angola must do so in association with Sonangol with
― Law no. 13/04 of 24 December (Petroleum Taxation Sonangol having an interest of more than 50% in the
Law) association (see below in relation to licensing).
― Law 11/04 of 12 November (Petroleum Customs Law)
― Law No. 2/12 of January 13 (Law on the Foreign

Licensing
Exchange Regime applicable to the Petroleum Sector)
Identify the main fiscal/legal model granting rights
― Ministry of Petroleum Order No. 127/03 of 25 to explore and produce oil and gas.
November 2003 (Local Content Regulations)
Legal
― Decree No. 48/06 of 1 September (Public Tendering
The required association with Sonangol should take the
for the Oil Sector)
form of a JV, a consortium, a production sharing
Identify the Government, regulatory and/or agreement (“PSA”) or a revenue sharing agreement
oversight bodies principally responsible for (“RSA”). As a general rule, Sonangol should hold an
regulating oil and gas activities. interest of more than 50% if the operations are undertaken
under a JV corporation or a consortium. The most common
The Ministry of Petroleum is the government body form of association is the PSA association.
responsible for the regulation and oversight of oil activities
in Angola. The national concessionaire is Sonangol E.P. A model form PSA is available from Sonangol on request
(“Sonangol”) which is the holder of the concession rights (the “Model PSA”).
and has competence to conduct, execute and ensure oil The risk of investment in the exploration period shall be
operations in Angola. borne by the oil company. Such entity shall not be entitled
to recover the capital invested where there is no
economically viable discovery.
Entry requirements
The operator, in respect of the petroleum activities, shall be
What are the registration requirements for appointed in the relevant concession upon proposal from
becoming a licensee of an oil and gas production Sonangol.
sharing contract/ licence/concession (“Licence”) in
your country? For instance, is it necessary to Fiscal
incorporate a subsidiary, or register a branch? Petroleum activities carried out under a PSA in Angola are
All entities, whether Angolan or foreign may conduct subject to Petroleum Income Tax (“PIT”). PIT is a corporate
petroleum activities in Angola. Entities intending to be income tax assessed on taxable income generated by the
awarded with a concession must be incorporated as a exploration, development, production, storage, sales,
commercial company (foreign or national) and be export and transportation of petroleum as well as the
associated with Sonangol. The award process is wholesale trading of other products resulting from such
undertaken under a public tendering regime or direct activities or other incidental profits.
negotiation. International oil companies tend to register a
branch in Angola.
2
PIT is assessed on a ring-fenced basis and corresponds to years. This can be extraordinarily extended upon request
the crude oil produced net of the cost oil (deductible of the licensee or Sonangol. Concessions are normally
Angola
expenses) and the Sonangol’s share of production / granted for a period of approximately 25 years. The
revenue. Only recoverable expenses under the PSA are duration of a concession may also exceptionally be
tax-deductible. The tax rate is 50%. extended.
In addition, there is a surface fee and a training Does the Government have any right to participate
contribution to be paid by the associates Sonangol. Some and be carried in the Licence? If so, please describe
concessions (not awarded under PSAs) may also be the extent of this entitlement.
subject to Petroleum Production Tax (“PPT”) or
Transactional Petroleum Tax of 70% on the taxable The State, through Sonangol, is the holder of all mining
income. In these circumstances PPT and Transactional rights and petroleum activities are undertaken the oil
Petroleum Tax are deductible from PIT. companies in association with Sonangol. In some
situations, the State participates through the state owned
The Ministry of Finance (in conjunction with the Ministry of company Sonangol P&P and the oil companies may be
Petroleum) is responsible for establishing and conducting contractually bound to carry Sonangol P&P.
the tax policies and charges.
Is there any mechanism for recovery of carry
In addition to the specific sectorial taxes, payment of
costs?
services is commonly subject to 6.5% industrial withholding
tax. Consumption tax of 5% or 10% may also apply to the Provisions in relation to carrying costs and their recovery
acquisition of certain services. Payment of capital income are agreed and included in each PSA.
(interest, royalties, dividends) is subject to investment
The Model PSA establishes the possibility for the recovery
income tax (rates vary between 10% and 15%).
of carry costs through profit oil.
Please outline the procedure to apply to the
Does the Government have any right to participate
Government for an interest in a Licence in your
in the operatorship of the Licence?
country. Please include details of cost and timing
for obtaining such interest. The operator is indicated in the relevant concession upon
proposal from Sonangol. This task is usually undertaken by
The application for a License (“Application”) is submitted
the oil company but could be Sonangol in certain
to the Ministry of Petroleum. The Application must include
circumstances.
evidence of the applicant´s (i) trustworthiness, (ii) technical
capability and (iii) financial capacity.
The applicant will prove this by including in its Application: Assignment

(i) suitable banking references which support their financial
capacity; (ii) annual reports of fiscal activities, including the What Government and/or regulatory approvals are
balance of the accounts of the last three years as audited required for the acquisition of oil and gas interests
by an independent and proven entity; and (iii) evidence of held under a Licence (whether by asset or
experience in petroleum activities. corporate sale/ change of control)?
The Application will also include the main objects of the If any, what are the timing requirements and costs
company in acquiring a License and identify the area the of obtaining such Government and/or regulatory
company wishes to explore. approvals?
The Application is subject to a fee determined by the Associates of Sonangol may only assign their contractual
Ministry of Petroleum on a case by case basis. rights and duties (in whole or in part) to third parties of
sufficient capacity, technical knowledge and financial
There is no time frame provided for the review of
capacity, after having obtained prior authorization from the
Applications. Any decision regarding the Application will be
Minister of Petroleum.
subject to Sonangol´s opinion.
For the purposes of the Petroleum Activities Law, the
What is the customary duration of the relevant transfer of shares representing more than 50% of the
Licence? associate’s share capital represents change of control and
The duration of prospecting licenses and concessions is is also subject to this prior authorization.
defined in the respective license and concession decree.
The maximum duration of a prospecting license is three
3
Are there any pre-emptive rights reserved to any
Government entities in the event of a proposed
Abandonment and
Decommissioning
Angola
assignment of an interest held under a Licence? If

so, what are the terms upon which such entities are
allowed to acquire the interest? What abandonment regime is in place?
Sonangol has a pre-emptive right in respect to the Are security deposits required in respect of future
assignment of an interest held under a license. Where this decommissioning liabilities?
pre-emptive right is not executed by Sonangol, it may be
Abandonment and decommissioning are governed by the
executed by any Angolan Oil Company.
Petroleum Activities Law.
At least one year prior to termination of the concession or

Economic support abandonment of an area, Sonangol shall provide the
Ministry of Petroleum with a plan for the decommissioning
Are parental guarantees or other economic of the wells, facilities, equipment and for the rehabilitation
supports commonly required to be provided by oil of the landscape or continuing of the petroleum operations.
and gas companies?
In the event of abandonment, Sonangol must proceed with
Given that the associates are usually subsidiaries of IOCs, the correct abandonment of the well or wells, and shall
it is common for Sonangol to request the IOC to grant a take all the measures necessary to decommission the
parent company guarantee covering the activity of its facilities and other assets and restore the landscape in
subsidiary. accordance with the relevant legislation and best practice
Are security deposits required in respect of work of the industry.
commitments or otherwise? According to the concession decrees, during the
Within 30 days of the issuance of the prospecting license concession, the associates must allocate funds to a
or the date of signing of a contract with Sonangol, the decommissioning fund the limits of which are calculated
licensees and the associates must provide a bank and accounted for in accordance with the rules established
guarantee in the amount of 50% of the work budgeted to in the PSAs. Deduction of such provision for taxation
guarantee performance of work obligations under the purposes may be allowed.
license or the contract.
4
Benin
Conducting oil and gas activities in Benin
Laws and regulations Benin are subject to the requirement to obtain permits from
the Government.
List the main legislation governing petroleum
In order to carry out oil research and exploitation activities,
exploration and production activity in your country.
it is required to conclude an agreement permitting such
Law No. 2006-18 dated 24 July 2006 relating to the activities with the Government.
Hydrocarbon Code (the ‘Hydrocarbon Code’) governs
Fiscal
exploration and production and the trade of oil and gas in
Benin. Fixed fee taxation is payable on:
Identify the Government, regulatory and/or ― The granting of a prospecting authorisation;

oversight bodies principally responsible for ― The establishment and renewal of a research permit;
regulating oil and gas activities.
― The establishment and renewal of an exploitation
The Ministry of Hydrocarbons and the Department of permit;
Hydrocarbon are the government authorities primarily
responsible for the regulation of the oil and gas activities in ― The granting of a temporary authorisation to extract
Benin. hydrocarbons; and
― The granting of an authorisation for oil transportation

by pipeline.
Entry requirements
Research and exploitation permits are also subject to an
What are the registration requirements for annual land royalty.
becoming a licensee of an oil and gas production
Profits earned by companies involved in activities relating
sharing contract/ licence/concession (‘Licence’) in
to research, exploitation, production and sale of
your country? For instance, is it necessary to
hydrocarbons, including transportation within Benin, are
incorporate a subsidiary, or register a branch?
subject to corporation tax between 35% and 45% and
Any company must be registered in Benin to become a depending on the research and exploitation contract terms.
licensee. If the company is based abroad, it is mandatory
to incorporate a subsidiary in Benin.
Are there any foreign investment approval country. Please include details of cost and timing
requirements or restrictions when commencing for obtaining such interest.
business in your country (e.g. a minimum local
The Licenses are granted by decree through a public
shareholding in the entity undertaking the activity)?
invitation to tender. Details on costs and timing to obtain
As above. such an interest are not readily available from the Ministry
of Hydrocarbons.
Licensing What is the customary duration of the relevant

Licence?
There are two types of hydrocarbon license in Benin:
to explore and produce oil and gas.
(i) the research permit; and (ii) the exploitation permit.
Legal
The research permit is granted for a period of 3 years and
According to the Hydrocarbon Code, the prospecting, renewable twice for further 3 year periods.
research, exploitation and transportation of oil and gas in
5
The Exploitation Permit is granted for a period of 25 years The deed of assignment is subject to the approval of the
which may be extended for an exceptional period of 10 Ministry of Hydrocarbons.
years under the terms and conditions agreed in the related
The Hydrocarbon Code does not provide details or
Benin
petroleum contract.
guidance relating to the specific timing and costs of
Apart from the research permit and exploitation permit, obtaining such approval of the Ministry of Hydrocarbons.
there is also a prospecting authorisation granted for a
period of 2 years which may be extended once for a period Are there any pre-emptive rights reserved to any
of 1 year. Government entities in the event of a proposed
Does the Government have any right to participate so, what are the terms upon which such entities are
and be carried in the Licence? If so, please describe allowed to acquire the interest?
the extent of this entitlement.
There are no pre-emptive rights reserved to the
Is there any mechanism for recovery of carry Government or any public bodies.
costs?
The Government has the right to participate in the research Economic support
and exploitation activities with the licence holder through a
production sharing agreement (the ‘PSA’) or through Are parental guarantees or other economic
another petroleum contract. The PSA determines the supports commonly required to be provided by oil
obligations of the Government and the licence holder. and gas companies?
Does the Government have any right to participate The Hydrocarbon Code does not specifically state that
in the operatorship of the Licence? parental guarantees are to be provided by oil and gas
companies. However, it states that as a condition
The Government has the right to participate in the precedent to the granting of the Licence, the company
operatorship of the Licence. Under the provision of the must prove that it has the financial and technical capacity
Hydrocarbon Code, the Government may engage in all to perform prospecting, research, exploitation and
petroleum operations either alone or associated with transportation activities in oil and gas.
private capital.
Are security deposits required in respect of work
In practice, the Government usually has the option to
commitments or otherwise?
participate in the operatorship of a permit through the PSA,
up to a maximum of 15%. There is no obligation within the Hydrocarbons Code to
provide security deposits although in practice provisions
requiring such security for work commitments are included
Assignment in the PSA.
What Government and/or regulatory approvals are

required for the acquisition of oil and gas interests Abandonment and
held under a Licence (whether by asset or
corporate sale/ change of control)? Decommissioning
If any, what are the timing requirements and costs What abandonment regime is in place?
of obtaining such Government and/or regulatory
Are security deposits required in respect of future
approvals?
decommissioning liabilities?
The prior approval of the Ministry of Hydrocarbons is
Any company, which would like to abandon the exploitation
required for any assignment of interests, assets or
activity before the expiration of the permit is required to
obligations relating to the oil activities of the company, as
obtain the approval of the Ministry of Hydrocarbons. Under
well as for any acts, which cause a change of control of the
the provision of Article 54 of the Hydrocarbon Code, the
company. In practice the terms of the notice required by
holder of an operating licence can abandon their
the Ministry of Hydrocarbons for it to approve an
exploitation activity after giving no less than 3 months’
assignment or change of control are generally included in
notice to the Ministry of Hydrocarbons. The Ministry of
the PSA.
Hydrocarbons is only likely to provide its permission to
abandon the exploitation activity if the licence holder can
6
demonstrate that it has taken all the measures required of general, the licence holder is required to pay the cost of
it within the Hydrocarbon Code. In such instances, and in decommissioning.
Benin
7
Cameroon
Conducting oil and gas activities in Cameroon
Laws and regulations Entry requirements

List the main legislation governing petroleum What are the registration requirements for
exploration and production activity in your country. becoming a licensee of an oil and gas production
The main legislation relating to petroleum activities is Law sharing contract/licence/concession (‘Licence’) in
no. 99-013 dated 22 December 1999 and implementing your country? For instance, is it necessary to
Decree no. 2000-465 dated 30 June 2000 (the ‘Petroleum incorporate a subsidiary, or register a branch?
Code’). According to the Petroleum Code, any contractor carrying
Due to the general nature of the Petroleum Code, most of out petroleum activities in Cameroon is required to hold a
the specific provisions governing petroleum exploration Petroleum Contract. Contractors may operate through a
and production are included in petroleum contracts local subsidiary for the whole duration of the Petroleum
(‘Petroleum Contracts’), which implement the principles of Contract or through a branch.
the Extractive Industries Transparency Initiative. Pursuant to the OHADA Companies Act which is directly
Uniform Acts adopted by the Organisation for the applicable in Cameroon, any foreign company having
Harmonisation of Business Law in Africa (Organisation registered a branch must transform such branch into a
pour l’Harmonisation en Afrique du Droit des Affaires or local company after a maximum of 4 years (i.e. an initial 2
‘OHADA’), of which Cameroon is a member State, apply to year period, renewable once for a further 2 years).
companies carrying out oil and gas activities in Cameroon,
Are there any foreign investment approval
especially the OHADA Companies Act.
Oil and gas activities are subject to Exchange Control business in your country (e.g. a minimum local
Regulations applicable within the Economic and Monetary shareholding in the entity undertaking the activity)?
Community of Central Africa (Communauté Economique et
There is no limitation on foreign investment in the
Monétaire de l’Afrique Centrale or ‘CEMAC’).
Petroleum Code. Local and foreign investments are treated
Identify the Government, regulatory and/or equally.
oversight bodies principally responsible for Pursuant to Exchange Control Regulations, any investment
regulating oil and gas activities. exceeding CFAF 100,000,000 must be declared to the
The main institutions of the Cameroonian hydrocarbons Economy Minister (Ministere des Economie) at least 30
sector include: days before the transfer of funds to Cameroon. If such
declaration is not made, a fine equal to 20% of the
― Ministry of Mines, Industry and Technological investment may be applied.
Development (Ministre de l’Industrie, des Mines et du
Développement Technologique) (‘MM’); and Local content requirements are also expressly included in
the Petroleum Code and must be reflected in Petroleum
― National Hydrocarbons Company (Société Nationale Contracts. The relevant undertakings relate to:
d’Hydrocarbures or ‘SNH’), established in March
1980. ― Giving preference to local companies for construction,
supply and services contracts provided they offer
equivalent conditions of quality, price, quantities,
delivery, payment and after-sale services;
― Hiring, in priority, skilled local employees; and
― Financing and establishing training programmes for

local employees.
8
These local content obligations apply to both contractors The Petroleum Code refers to the following 3 types of
Cameroon
and sub-contractors. contracts for upstream activities:
― Concession Contract (contrat de concession

attachés à l’octroi de titres miniers d’hydrocarbures
Licensing
constitués par des permis de recherche et les
Identify the main fiscal/legal model granting rights concessions d’exploitation) is entered into prior to the
to explore and produce oil and gas. grant of an exploration permit and confers rights and
obligations during exploration and, in case of a
Legal discovery, during production. The Concession
Contractors are granted rights to explore, develop and Contract holder assumes financial and operating risks
produce oil and gas by obtaining both an authorisation and may dispose of the production in accordance with
from the State and entering into a contract with MM the contract.
defining the terms of such authorisation. Details of the ― Production Sharing Contract (‘PSC’) (contrat de
relevant authorisations are as follows: partage de production) under which the State grants
― Non-exclusive prospecting authorisation an exclusive exploration right and, in case of a
(autorisation de prospection) under which the holder is discovery, an exclusive right of production. The
entitled to perform preliminary surface prospecting Concession Contract holder assumes financial and
works on a non-exclusive basis. The prospecting operating risks. Production is shared with the State in
period is fixed at 2 years with the possibility of one accordance with the contract.
renewal period of up to 1 year. The prospecting ― Service Contract (Contrat de services à risques)
authorisation may confer a preferential right to a under which the contractor has no entitlement to any
Petroleum Contract for the contractor in exceptional portion of the production but is remunerated in cash
circumstances. Transfer or disposal of the rights and for its services and reimbursed its petroleum costs.
obligations arising from this authorisation is forbidden.
Petroleum Contracts are all negotiated with the MM, are
― Exclusive exploration authorisations: subject to Cameroonian law and contain all dispositions
Exploration permits under Concession Contracts applicable to the relevant exploration and/or production
(permis de recherche d’hydrocarbures) and exclusive phase, including:
exploration authorisations under PSCs (autorisation
exclusive de recherche) are granted on an exclusive ― Exploration area;
basis for an initial 3 year period (or 5 years in special ― Duration of the contract and the relevant
petroleum operation zones) with the possibility of two authorisations or permits including renewal periods
renewal periods of up to 2 years each. The relevant and relinquished areas;
contract (see below) provides for relinquishment
obligations of the authorisations at each renewal ― Work and investment commitments and relevant
stage. securities;
― Exclusive interim production authorisation ― Transportation rights;

(autorisation d’exploitation provisoire) under which an ― Production ownership and sharing;
existing exploration permit holder may be granted an
interim production right for a maximum of 2 years ― State participation;
within the exploration period. ― Tax and customs regime;
― Exclusive production authorisations: ― Transfer and assignment;
Production concessions under Concession Contracts
(concession d’exploitation) and exclusive production ― Environment, health and safety and rehabilitation of
autorisations under PSCs (autorisation exclusive sites;
d’exploitation) are granted for a maximum period of 25 ― Local preference and local training commitments ;
years (or 35 years for gas) with one renewal period of
up to 10 years. ― Abandonment obligations including abandonment
deposit; and
― Stability, force majeure, and dispute resolution

clauses
9
A model contract may be provided by the MM to serve as a ― VAT: goods and services related to petroleum
Cameroon
basis for negotiations. In practice, only a model form PSC activities are exempted from VAT.
has been issued.
― Withholding taxes: distribution of dividends is
Petroleum Contracts must be signed by the MM or its duly exempt from taxation.
authorised representative.
― Customs: the CEMAC customs regime is applicable.
Fiscal Imports of materials, products, machinery, equipment
and tools exclusively related to petroleum operations
Contractors are subject to taxes and other contributions
are exempted from customs duties. A reduced rate of
under the Cameroonian tax code, the Petroleum Code and
5% applies to all other imports related to production
the relevant Petroleum Contract:
during the first 5 years of production. Subcontractors
― Bonuses: a signature bonus may be due upon are also entitled to the special customs regimes.
signature of the Petroleum Contract and a production
― Abandonment deposit: holder of a production
bonus may be negotiated with the State.
authorisation shall deposit abandonment costs as
― Fixed entry fees: granting and renewal of petroleum specified under the Petroleum Contract.
authorisations or permits is subject to payment of fixed
In addition to the above fiscal regime, a Petroleum
entry fees as follows:
Contract may offer specific tax incentives to the contractor.
(a) Prospecting authorisation: CFAF 6,000,000
(b) Exploration authorisation or permit: CFAF Government for an interest in a Licence in your
15,000/km² at the granting and CFAF 10,000/ km² country. Please include details of cost and timing
at the renewal, with a minimum levy of CFAF for obtaining such interest.
6,000,000
Access to the Cameroonian petroleum sector is granted to
(c) Production authorisation: CFAF 250,000,000 at companies having the required technical and financial
the granting, renewal and transfer. capabilities. Block awarding is decided by the government
― Surface area royalty: an annual surface area royalty on a discretionary basis either by tender procedure or by
is due depending on the relevant phase of petroleum direct negotiations with the MM.
operations: In the case of PSCs or Service Contracts, successful
(a) Exploration authorisation or permit: increases negotiations lead to immediate signature and entry into
from CFAF 1,750/km² in year 1 to year 5 to CFAF force unless otherwise agreed. As regard Concession
5,500/km² in year 5 and beyond Contracts, the exploration permit is delivered after its
signature by decree, such signature being the date of entry
(b) Production authorisation: CFAF 100,000/km² with into force of the Concession Contract.
a minimum levy of CFAF 6,000,000
What is the customary duration of the relevant
― Proportional royalty: holders of Concession
Licence?
Contracts are subject to a monthly proportional royalty
based on production volumes as set out in the See the ‘Legal’ section above for details of durations for
Concession Contract. the relevant Licences.
― Additional petroleum tax: holders of Concession Does the Government have any right to participate
Contracts may be subject to an additional petroleum and be carried in the Licence? If so, please describe
tax based on the profitability of the petroleum the extent of this entitlement.
operations.
― Profit oil and cost oil: profit oil and cost oil are
costs?
negotiated in the PSC. Furthermore, contractors have
the obligation to supply the domestic market a defined The State may, pursuant to the terms of the relevant
part of their production. Petroleum Contract, participate, directly or through SNH, in
petroleum operations. The Petroleum Code does not
― Corporate income tax: corporate income tax is due
include any minimum rate regarding State participation in
on profits at a negotiated rate, usually between 33%
the company applying for or holding a Petroleum Contract.
and 50%.
However, it may be noted that under the model form PSC,
10
the State is entitled to a minimum 5% and a maximum 25%
Economic support
Cameroon
non-carried interest during the production phase.
Are parental guarantees or other economic
supports commonly required to be provided by oil
and gas companies?
As above, the State may participate as operator, directly or
The Petroleum Code does not require a parent company
through SNH, in petroleum operations.
guarantee where one or several of the companies forming
the contractor entity are subsidiaries of an oil company.
However such guarantee may be negotiated in the
Assignment
Petroleum Contract.
What Government and/or regulatory approvals are Security interests to be provided will be governed by the
required for the acquisition of oil and gas interests provisions of the OHADA Uniform Act organising
held under a Licence (whether by asset or securities, applicable in Cameroon.
corporate sale/change of control)?
If any, what are the timing requirements and costs commitments or otherwise?
approvals? Securities in respect of work commitments are not
expressly provided for in the Petroleum Code. However,
Transfer or disposal of the rights and obligations arising such securities or other types of securities may be
from Petroleum Contracts and authorisations or permits is negotiated in the Petroleum Contract.
subject to notification to and prior approval of the MM. The
same applies to any change of control. Approval is deemed
to be granted where no response to the request for Abandonment and
approval is received within 60 days of its filing.
Decommissioning
Government entities in the event of a proposed What abandonment regime is in place?
assignment of an interest held under a Licence?
If so, what are the terms upon which such entities decommissioning liabilities?
are allowed to acquire the interest? The Petroleum Code requires abandonment and
The Petroleum Code does not provide the State with a pre- rehabilitation obligations to be included in the Petroleum
emptive right. A right of pre-emption in favour of the State Contract. In particular, the holder of a production
may, however, be negotiated in the Petroleum Contract. authorisation shall deposit abandonment costs as specified
under the Petroleum Contract.
In addition, the Petroleum Code provides for the obligation

to include environmental provisions, in particular
environmental impact studies and management plans, in
the Petroleum Contract.
11
Chad
Conducting oil and gas activities in Chad

The main legislation governing petroleum activities is Law sharing contract/licence/concession (‘Licence’) in
no.07-006 dated 2 May 2007 as amended by Ordinance your country? For instance, is it necessary to
no.10-001 dated 30 September 2010 and its implementing incorporate a subsidiary, or register a branch?
decree no.10-796 PR/PM/MPE dated 30 September 2010 According to the Petroleum Code, any contractor carrying
(the ‘Petroleum Code’). out petroleum activities in Chad is required to hold a
Due to the general nature of the Petroleum Code, most of Petroleum Contract. Foreign contractors must incorporate
the specific provisions governing petroleum exploration a local company to carry out exploration and production
and production are included in production sharing contracts activities in Chad.
(‘PSCs’) or concession contracts (together the ‘Petroleum
Contracts’).
Uniform Acts adopted by the Organisation for the business in your country (e.g. a minimum local
Harmonisation of Business in Africa (Organisation pour shareholding in the entity undertaking the activity)?
l’Harmonisation en Afrique du Droit des Affaires or
‘OHADA’), of which Chad is a member State, apply to
companies carrying out oil and gas activities in Chad,
equally.
Pursuant to Exchange Control Regulations, any investment
Oil and gas activities are subject to Exchange Control
exceeding CFAF 100,000,000 must be declared to the
Regulations applicable within the Economic Monetary
Economy Minister at least 30 days before the transfer of
funds to Chad. Failing such declaration a fine equal to 20%
of the investment may be applied.
Identify the Government, regulatory and/or Local content requirements are also expressly included in
oversight bodies principally responsible for the Petroleum Code. The relevant undertakings relate to:
― Giving preference to local companies for construction
The main institutions of the Chadian hydrocarbons sector contracts or services contracts provided they offer
include: equivalent conditions of quality, quantity and price;
― Ministry of Petroleum and Energy (Ministère du ― Hiring, in priority, local employees with equivalent
Pétrole et de l’Energie or ‘MPE’); qualifications;
― SHT (Société des Hydrocarbures du Tchad), the ― Funding and establishing training programmes for
National Hydrocarbons Company (‘NHC’), established local employees; and
in August 2006; and
― Submitting reports specifying the current level of
― National Commission for the Negotiation of Petroleum recruitment of local employees and a programme for
Contracts (Commission Nationale Chargée de la recruitment.
Négociation des Conventions Pétrolières or ‘NCNPC’),
established in January 2008.
12
― PSC (contrat de partage de production) under which
Licensing
the State grants an exclusive exploration right to the
Identify the main fiscal/legal model granting rights contractor and, in case of a discovery, an exclusive
Chad
to explore and produce oil and gas. production right. The contractor assumes financial and
operating risks and production is shared with the State
Legal in accordance with the PSC terms.
Contractors are granted rights to explore develop and Petroleum Contracts are all negotiated with the MPE and
produce oil and gas by obtaining authorisations from the the NCNPC and must contain all dispositions applicable to
State, and by entering into a Petroleum Contract with the the relevant exploration and/or production phase, including:
MPE which defines the terms of such authorisations.
Details of the relevant authorisations are as follows: ― Exploration area;
― Prospecting authorisation (autorisation de ― Duration of the contract and the relevant

prospection): the holder of a prospecting authorisation authorisations or permits including renewal periods
is entitled to perform preliminary surface prospecting and relinquished areas;
works, on a non-exclusive basis. The authorisation is ― Work and investment commitments and relevant
granted for a 2 year period, renewable once for a securities;
further 2 year period. It does not confer any
preferential rights to its holder to enter into a ― Transportation rights;
Petroleum Contract. Prospecting results are disclosed ― Production ownership and sharing;
to the MPE. The transfer of rights and obligations
arising from this authorisation is prohibited. ― State participation;
― Exploration authorisations: exploration permit under ― Tax and customs regime;

concession contracts (permis de recherche ― Transfer and assignment;
d’hydrocarbure), and exclusive exploration
authorisation under PSCs (autorisation exclusive de ― Environment, health and safety;
recherche). Exploration authorisations are granted on ― Local preference and local training commitments;
an exclusive basis for an initial 5 year period that may
be extended once for up to a further 3 years. Election ― Abandonment obligation including rehabilitation costs
to renewal is accompanied by a requirement to and transfer of facilities to the State; and
relinquish at least 50% of the surface area covered by ― Stability, force majeure, and dispute resolution
the authorisation. Where a potentially commercial clauses.
discovery is made, contractors may be granted a
retention period not exceeding 3 years for gas and 2 A model form PSC has been issued and provides a basis
years for oil. Proven commercial discovery entitles the for negotiation.
holder to be granted a production right, subject to the Petroleum Contracts must be signed by the MPE. Entry
approval of a development plan. into force is subject to ratification by the National
― Production authorisations: production permit under Assembly. Authorisations and the law ratifying the relevant
concession contracts (permis d’exploitation) and Petroleum Contract are published in the Official Gazette. In
exclusive production authorisation under PSCs addition, Chad implements the principles of the Extractive
(autorisation exclusive d’exploitation). Production Industries Transparency Initiative.
authorisations are granted for a maximum period of 25 Fiscal
years with one renewal period of up to 10 years.
The Petroleum Code refers to the following 2 types of under the Petroleum Code, the General Tax Code and the
Petroleum Contracts for upstream activities: Petroleum Contract.
― Concession contract (contrat de concession) is ― Fixed entry fees: granting, renewal or transfer
entered into prior to the grant of an exploration permit petroleum authorisations or permits is subject to
and confers rights and obligations during exploration payment of fixed entry fees as follows:
and, in case of a discovery, during production. The
concession contract holder assumes financial and (a) Issuance or renewal of a prospection
operating risks and may dispose of any produced authorisation: USD 50,000.
hydrocarbons in accordance with the contract.
13
(b) Exclusive exploration authorisations Issuance, ― Profit oil, as well as its calculation method (based on
renewal, prorogation or division: USD 50,000. the ‘R-Factor’ ratio), is set out in the PSC.
(c) Transfer: USD 1,000,000. ― The State is entitled to a tax oil, which comprises at
Chad
least 40% of profit oil.

(d) Exclusive production authorisations:
Furthermore, contractors have the obligation to supply the
(e) Issuance, renewal, prorogation or division: USD
domestic market a defined part of their production pursuant
500,000.
to the terms of the Petroleum Contract.
(f) Transfer: USD 3,000,000.
― Bonuses: the Petroleum Code provides for a Government for an interest in a Licence in your
signature bonus, a discovery bonus and a production country. Please include details of cost and timing
bonus, to be negotiated within the Petroleum Contract. for obtaining such interest.
― Surface area royalty: an annual surface area royalty Access to the Chadian petroleum sector is granted to
is due as set out in the Petroleum Contract. companies having the required technical and financial
― Production royalty: a monthly production royalty is capabilities. Block awarding is decided by the government
set out in the Petroleum Contract and ranges from on a discretionary basis either by tender procedure or by
14.25% to 16.5% for oil and 5% to 10% for gas direct negotiations with the MPE.
payable in cash or in kind. Applications are submitted to the MPE which has 15 days
― Corporate income tax: applicable rate is specified in to notify its approval. A Petroleum Contract is then
the Petroleum Contract and ranges from 40% to 75%. negotiated with the MPE and is to be signed within 3
The model form PSC exempts the contractor from months of the MPE approval of the application. The
corporate income tax. Petroleum Contract is subject to ratification by the National
Assembly. Publication of authorisations in the Official
― Capital gains: gains resulting from an assignment of Gazette is notified to the contractor within 15 days.
any authorisation to undertake petroleum operations
under a PSC are taxed at a rate of 25%. What is the customary duration of the relevant
Licence?
― VAT: goods and services related to petroleum
activities which are approved by the MPE are Please refer to the ‘Legal’ section above for information on
exempted from VAT. the duration of relevant authorisations.
― Customs: the CEMAC customs regime is applicable. Does the Government have any right to participate
Imports of approved goods exclusively related to and be carried in the Licence? If so, please describe
petroleum operations are exempt from customs the extent of this entitlement.
duties. Exports of produced hydrocarbons are
exempted from customs duties. Nevertheless, a Is there any mechanism for recovery of carry
statistical tax applies. costs?
― Withholding tax: distribution of dividends is exempt The State may participate in petroleum operations either
from taxation. directly or through the NHC. During exploration the State is
entitled to an initial participation as set out in the Petroleum
― Transfer duty: transfer of petroleum rights are subject
Contract. All costs and risks associated with that interest
to payment of a transfer duty at the rate of 1%.
are incurred by the contractor. During production, the State
― Abandonment cost: contractors are required to is entitled to an additional participation as set out in the
deposit abandonment costs in an escrow account as Petroleum Contract. The model form PSC provides for an
specified under the Petroleum Contract. optional interest up to a maximum of 25% following the
granting of a production authorisation.
― Support contributions: various support contributions
are provided for and are to be specified in the PSC. Does the Government have any right to participate
In addition to the above fiscal regime, Chad has a in the operatorship of the Licence?
prescribed system for revenue sharing in relation to The State may participate as operator either directly or
production activities: through the NHC in petroleum operations.
― Cost oil is limited to 70%, after deduction of the
production royalty.
14
are subsidiaries of an oil company. Such guarantee may
Assignment
be a negotiated term in Petroleum Contracts.
What Government and/or regulatory approvals are Unless otherwise provided for in the Petroleum Contract,
Chad
required for the acquisition of oil and gas interests security interests are governed by the OHADA Uniform Act
held under a Licence (whether by asset or organising securities, applicable in Chad.
If any, what are the timing requirements and costs commitments or otherwise?
approvals? Securities in respect of work commitments are expressly
provided for in the Petroleum Code. Other types of
Transfer of rights and obligations as well as authorisations securities may also be required under Petroleum
and permits arising from Petroleum Contracts is subject to Contracts.
notification to and prior approval of the MPE.
Approval is deemed to be granted where no response to

the request for approval is received within 90 days of its Abandonment and
filing. Decommissioning
Are there any pre-emptive rights reserved to any What abandonment regime is in place?
assignment of an interest held under a Licence? If Are security deposits required in respect of future
so, what are the terms upon which such entities are decommissioning liabilities?
allowed to acquire the interest?
The Petroleum Code requires abandonment and
The State is granted a pre-emptive right in the event of rehabilitation obligations to be included in Petroleum
assignment of petroleum rights. Contracts. In particular, contractors shall deposit
abandonment costs in an escrow account specified under
the Petroleum Contract.
Economic support
Facilities and equipment from which the contractor has
Are parental guarantees or other economic recovered its costs may be transferred free of charge to the
supports commonly required to be provided by oil State.
and gas companies? In addition, the Petroleum Code provides for the obligation
The Petroleum Code does not require a parent company to include environmental provisions, in particular
guarantee where companies forming the contracting entity environmental impact studies and management plans, in
Petroleum Contracts.:
15
DRC
Conducting oil and gas activities in

the Democratic Republic of Congo (‘DRC’)
Laws and regulations

Entry requirements
exploration and production activity in your country. What are the registration requirements for
The main legislation governing petroleum activities is Law
no. 15-012 dated 1 August 2015 (the ‘Petroleum Code’),
sharing contract/licence/ concession (‘Licence’) in
for which implementation regulations are yet to be
published.
Due to the general nature of the Petroleum Code, most of According to the Petroleum Code, any contractor carrying
the specific provisions governing petroleum exploration out petroleum activities in the DRC is required to hold a
and production are included in petroleum contracts Petroleum Contract. Foreign contractors must incorporate
(‘Petroleum Contracts’). a local company to carry out exploration and production
activities in DRC.
Uniform Acts adopted by the Organisation for the
Harmonisation of Business Law in Africa (Organisation Are there any foreign investment approval
pour l’Harmonisation en Afrique du Droit des Affaires or requirements or restrictions when commencing
‘OHADA’), of which the DRC is a member State, apply to business in your country (e.g. a minimum local
companies carrying out oil and gas activities in the DRC, shareholding in the entity undertaking the activity)?
Regulations adopted by the Economic Community of Petroleum Code. Local and foreign investments are treated
Central African States (Communauté Economique des equally.
Etats de l’Afrique Centrale or ‘CEEAC’), the Common
Local content requirements are also expressly included in
Market of Eastern and Southern Africa (‘COMESA’), and
the Petroleum Code. The relevant undertakings relate to:
the Southern African Development Community (‘SADC’)
may apply to companies carrying out oil and gas activities ― Giving preference to local subcontractors provided
in the DRC. they offer equivalent technical and commercial
experience;
Identify the Government, regulatory and/or
oversight bodies principally responsible for ― Hiring, in priority, skilled local employees;
regulating oil and gas activities. ― Financing and establishing training programmes for
The main institutions of the DRC hydrocarbons sector local employees; and
include: ― Funding sustainable community development projects.
― Ministry of Hydrocarbons (Ministére d’Hydrocarbures Modalities remain to be provided for by way of regulation.
or ‘MH’); and
― COHYDRO (Société Nationale d’Hydrocarbures), the

National Hydrocarbons Company (‘NHC’), established
in August 1999.
16
Petroleum Contracts must be signed by the MH and the
Licensing
Minister of Finance after deliberation of the Council of
Identify the main fiscal/legal model granting rights Ministers. Entry into force is subject to approval by means
to explore and produce oil and gas. of presidential ordinance. Contracts are published in the
DRC
Official Gazette and on the MH’s website. In addition, the
Legal DRC implements the principles of the Extractive Industries
Contractors are granted rights to explore, develop and Transparency Initiative.
produce oil and gas by obtaining authorisations from the Contracts entered into and authorisations granted under
State, and by entering into a contract with the MH which the previous Hydrocarbons Law (Ordinance-Law no. 81-
defines the terms of such authorisations. Details of the 013 dated 2 April 1981) remain in full force and effect.
relevant authorisations are as follows: Upon expiry and if a renewal is requested, such contracts
― Prospecting authorisation (autorisation de and authorisations become governed by the Petroleum
prospection). The holder of a prospecting Code.
authorisation is entitled to perform preliminary surface Fiscal
prospecting works, on a non-exclusive basis. The
authorisation is granted for a 12 month period and is Contractors are subject to taxes and other contributions
renewable once for an additional 6 month period. It under the Petroleum Code and the relevant Petroleum
does not confer any preferential rights to its holder to Contract. Blocks are categorized under 4 tax zones
enter into a Petroleum Contract. Prospecting results depending on their geological and environmental
are disclosed to and belong to the MH. The transfer of properties. The Petroleum Code refers to many tax
rights and obligations arising from such authorisation provisions of subsequent regulations which remain to be
is prohibited. published.
― Exploration authorisation (droit d’exploration). An ― Bonuses: a bonus is due at:

exploration authorisation is granted on an exclusive (a) the signing of the Petroleum Contract and any
basis for an initial 3 year period (4 year period in case amendments;
of difficult access to sedimentary basins), renewable
twice for additional 3 year periods. At each renewal, (b) registration of the exploration authorisation;
the holder must relinquish 50% of the area covered by (c) renewal of the exploration and production
the authorisation. Commercial discovery entitles the authorisations; and
holder to be granted a production right, subject to the
approval of a development plan. (d) first production.
― Production authorisation (droit d’exploitation). Such ― Surface area royalty: an annual surface area royalty
authorisation is granted for a maximum period of 20 is due as follows:
years, and is renewable once for a further 10 year (a) Exploration: 100 USD/km²
period.
(b) Production: 500 USD/km²
The Petroleum Code refers to the following 2 types of
contracts for upstream activities: ― Production royalty: a production royalty is based on
the wellhead production volume and is calculated on a
― Production Sharing Contract (contrat de partage de net-back basis, depending on the tax zone at the
production or ‘PSC’). The State grants an exclusive following minimum rates:
exploration right to the contractor and, in case of a
discovery, an exclusive production right. The (a) Zone A: 12.5%
contractor assumes financial and operating risks, and (b) Zone B: 11%
production is shared with the State in accordance with
the Petroleum Code and the PSC. (c) Zone C: 9.5%
― Service Contract (Contrat de services à risques ou (d) Zone D: 8%

contrat d’assistance technique). The contractor is not ― Special tax on expatriate salaries and personal tax
entitled to any portion of the production. Therefore the on local salaries: a tax is levied on the remuneration
contractor is paid for the performed services, and is of expatriate and local workers.
reimbursed for incurred petroleum costs.
― VAT: VAT applies to local consumption during the
production phase.
17
― Transfer duty: transfer of petroleum rights are subject Please outline the procedure to apply to the
to payment of a transfer duty. Government for an interest in a Licence in your
― Customs: imports of approved goods exclusively
for obtaining such interest.
DRC
related to petroleum operations are exempted from

customs duties. Also, exports of produced Access to the DRC petroleum sector is granted to
hydrocarbons, exports of samples and re-exports of companies having the required technical and financial
imported goods are exempt from customs duties. capabilities. A tender procedure is initiated by the MH
Nevertheless, a statistical tax applies. whereby the selection is made based on technical and
financial criteria and then approved by the Council of
― Community support provision: an annual provision
Ministers before blocks are awarded to the selected
of 0.5% of contractor’s profit oil is allocated to the
bidders. The contracting entity vis-à-vis the State is
funding of sustainable community development
comprised of one or more DRC or foreign legal entities in
projects.
association with the NHC.
― Training contribution: an annual contribution is
allocated to the training of DRC nationals. What is the customary duration of the relevant
Licence?
― Abandonment deposit: a rehabilitation fee must be
regularly deposited during the whole production period Please refer to the ‘Legal’ section above for information on
into a ring-fenced account jointly held by the MH and the duration of relevant authorisations.
the contractor at the Central Bank.
In addition to the above fiscal regime, DRC has a and be carried in the Licence? If so, please describe
prescribed system for revenue sharing in relation to the extent of this entitlement.
production activities:
― Cost stop: the amount of recoverable costs is limited costs?
to an annual cost stop, depending on the tax zone and
up to the following maximum levels: The State takes part of petroleum operations through the
NHC which is entitled to a minimum non-transferable 20%
(a) Zone A: 55% participation. Terms of such participation are reflected in
(b) Zone B: 55% the relevant Petroleum Contract. Furthermore, the NHC
takes no part in the exploration costs which are solely
(c) Zone C: 60% borne by the private entity.
(d) Zone D: 65%
― Excess oil: excess oil is equally shared between the in the operatorship of the Licence?
State and the contractor, irrespective of the tax zone.
The State may participate as operator through the NHC in
― Profit oil: profit oil is allocated to the State, depending petroleum operations.
on the tax zone and according to the following
minimum rates:
Assignment
(a) Zone A: 45%
(b) Zone B: 40% What Government and/or regulatory approvals are

required for the acquisition of oil and gas interests
(c) Zone C: 40% held under a Licence (whether by asset or
(d) Zone D: 35% corporate sale/change of control)?
― Super profit oil: all super profit oil is allocated to the If any, what are the timing requirements and costs
State when the oil price exceeds the highest cap of obtaining such Government and/or regulatory
mentioned in the Petroleum Contract. approvals?
Transfer of rights and obligations as well as authorisations

and permits arising from Petroleum Contracts is subject to:
― completion of the minimum work programme by the

contractor;
18
― the prior approval of the MH; and Are security deposits required in respect of work
― the assignee demonstrating its technical and financial
skills to the MH. Securities in respect of work commitments are not
DRC
expressly provided for in the Petroleum Code. However,
Are there any pre-emptive rights reserved to any such securities or other types of securities may be required
Government entities in the event of a proposed under the Petroleum Contract.
allowed to acquire the interest? Abandonment and
The State is granted a pre-emptive right in the event of Decommissioning
assignment of petroleum rights.
What abandonment regime is in place?
Economic support Are security deposits required in respect of future

The Petroleum Code provides for the obligation to include
environmental provisions in the Petroleum Contract, in
and gas companies?
particular environmental impact studies and management
The Petroleum Code does not require a parent company plans.
guarantee where companies forming the contracting entity
In addition, the Petroleum Code provides for a
rehabilitation fee borne by contractors and dedicated to a
be a negotiated term in the Petroleum Contract.
local rehabilitation fund for abandonment works. Such
Unless otherwise provided for in the Petroleum Contract, payments are made to a ring-fenced bank account at the
security interests are governed by the OHADA Uniform Act Central Bank jointly held by the MH and the contractor.
organising securities, applicable in the DRC.
19
Egypt
Conducting oil and gas activities in Egypt
Laws and regulations issued in the form of a special law) without incorporation of
an entity, subsidiary or registering a branch in Egypt.
While there is no specific requirement, as a result of the
typical requirement that the contractor company maintain
― Law No. 66/1953, On Mines and Quarries, also an ‘office’ in Egypt for the purposes of notices and other
establishing the General Egyptian Petroleum practical and logistical reasons, contractor companies
Organization under the Ministry of Industry (‘Fuels typically establish branches in Egypt at the start of their
Material Law’), and the Ministerial Decree No. operations.
758/1972, Promulgating the Executive Regulations of
Upon commercial oil and/or gas discovery, a non-profit
Law No. 66/1953;
joint venture between the contractor company (50% stake)
― Law No. 135/1956, as amended by Law No. and the relevant authority (either of
167/1958, establishing ‘The General Corporation of EGPC/EGAS/GANOPE) (50% stake) will be required to be
Petroleum Affairs’, as amended by Law No. 20/1976, established in the form of a special joint stock company,
regarding The Egyptian General Petroleum Authority (the ‘Operating Company’), which is exempted from a
(more commonly referred to as the Egyptian General number of other otherwise applicable provisions, to act as
Petroleum Corporation, or ‘EGPC’); the operating company for exploiting such commercial
discovery for the duration of the concession. The Operating
― Prime Ministerial. Decree No. 1009/2001, Concerning
Company acts as an agent for EGPC/EGAS/GANOPE and
the Establishment of the Egyptian Holding Company
the contractor company to carry out and conduct the
for Natural Gases (‘EGAS’), as amended by Prime
exploration, development and exploitation operations under
Mininsterial. Decree. No. 1580/2003; and
the concession agreement.
― Prime Ministerial. Decree No. 1755/2002, Concerning
the Establishment of the Ganoube El-Wadi Holding
Petroleum Company (‘GANOPE’), as amended.
Identify the Government, regulatory and/or shareholding in the entity undertaking the activity)?
oversight bodies principally responsible for
The articles of association for the Operating Company are
originally set out as an annex to the concession agreement
The Egyptian Ministry of Petroleum (‘MOP’) is the and its corresponding law requiring 50% participation of the
Government authority responsible for the development and relevant authority (either of EGPC/EGAS/GANOPE). Once
regulation of the entire chain of activities concerning the oil a commercial oil and/or gas discovery is made, the
and gas industry in Egypt acting mainly through EGPC, Operating Company automatically comes into existence
EGAS and GANOPE. within 30 days of the discovery, the signature of a gas
sales agreement or other disposal, without any further
Entry requirements procedures.
What are the registration requirements for

sharing contract/licence/concession (‘Licence’) in
A contractor company may conduct geological

reconnaissance, and subsequent initial exploration
activities pursuant to a concession agreement (which is
20
There are applicable local content requirements on
Licensing
material, equipment, machinery, consumables and
Identify the main fiscal/legal model granting rights contractors/subcontractors, limited to a price differential of
Egypt
to explore and produce oil and gas. 10% above the international provider.
Legal Please outline the procedure to apply to the

An initial Licence can be obtained for the purpose of
country.
conducting geological reconnaissance. Where the results
of such reconnaissance lead to further oil and gas Please include details of cost and timing for
prospecting or exploration, a preliminary agreement is obtaining such interest.
reached for the establishment of a concession. A law is
then issued approving or allowing the MOP to enter into Initial applications for geological reconnaissance are
the concession agreement between the Arab Republic of submitted at any time to EGPC/EGAS/GANOPE pursuant
Egypt, the relevant authority (either of EGPC/EGAS/ to a standard regulatory format, accompanied by a nominal
GANOPE), and the contractor company. The concession examination fee of EGP 5.
agreement confers exclusive rights for both the prospecting Applications for oil prospecting licences are submitted at
and eventual exploitation of oil and gas, whether onshore any time to EGPC/EGAS/GANOPE pursuant to a standard
or offshore. regulatory format, accompanied by: (i) a nominal
As all concession agreements are laws, they are published examination fee of EGP 5; (ii) a settlement cash deposit
and generally follow a standard format, with limited equivalent to the rental value of the prospecting area
deviation. payable for the first year; (iii) a cadastral map of any prior
oil prospecting area conducted by the contractor company;
Fiscal (iv) a cadastral map of the geographical coordinates of the
Concession agreements establish a schedule for: (i) current oil prospecting area desired; and (v) a signed copy
minimum expenditure during both the prospecting and of EGPC/EGAS/GANOPE conditions of licence.
exploitation periods of the concession; (ii) royalties payable Alternatively, particularly recently, EGPC has begun
to the Arab Republic of Egypt in cash or in kind (10%) for tendering prospective oil and gas exploration sites in bid
any quantity of oil or gas produced and saved, if any; (iii) rounds. See also Law No. 89 of the year 1998
both mandatory and voluntary relinquishment of certain promulgating the Law Organizing Tenders and Bids
concession areas under certain conditions; (iv) recovery of (‘Tender Law’).
costs and expenses (usually 35% to 40%); (v) schedule of
oil and gas production sharing between The applicant is usually required to submit documented
EGPC/EGAS/GANOPE and the contractor company evidence of financial and technical capabilities to fulfil any
depending on the amounts produced and saved; and (vi) oil and gas related operations and obligations.
any signing, assignment, or applicable production bonus. If approved, EGPC/EGAS/GANOPE forwards the oil
The contractor company and the Operating Company are prospecting licence application to the Minister of Petroleum
exempted from custom duties, effective taxes (see below), to issue the corresponding law setting out, inter alia, the
levies and fees related to the import of machinery, concession agreement and eventual articles of
appliances, vehicles, hardware, software and most other incorporation of the Operating Company.
items used in their operations. However, such exemption The contractor company covers the costs of exploration. In
does not apply where items of the same or substantially the event of a commercial discovery, exploration costs are
similar kind and quality are manufactured locally at recoverable under a production sharing agreement,
comparable prices. executed in line with the concession agreement.
Generally, the contractor company is subject to Egyptian
income tax at the rate of 40.55% and must file returns,
Licence?
assessment of tax and bookkeeping, which are to be
grossed up as set out in the concession agreement. In any An initial exploration period is granted for varying terms
event, the relevant authority (either of EGPC/EGAS/ (usually 3 years), with varying number of optional
GANOPE) assumes, pays and discharges, in the name of successive extensions (usually 2) of varying terms (usually
the contractor company, its Egyptian income tax out of 2 years each) but with a final termination sunset date
EGPC/EGAS/GANOPE’s share of the petroleum produced (usually 7 to 9 years from the beginning of the exploration
and saved as set out in the concession agreement. period) usually extendable only once for a period of 6
21
months. In any event, at each extension, a schedule sets concession holder and assignor has satisfactorily fulfilled
out that certain minimum amount of the prospecting area all its obligations pursuant to the concession agreement to
that must be relinquished either mandatorily or voluntarily. date, particularly with respect to any rental, royalty, duties,
Egypt
etc. payable; (ii) that the intended assignee has the

Upon a commercial oil and/or gas discovery, the area
technical and financial capability to carry out all duties and
capable of production is converted into a development
obligations under the concession agreement; (iii) that it
lease agreed between the parties, subject to approval by
shall warrant and represent it shall abide to all terms and
the Minister of Petroleum, automatically and without the
conditions of the concession agreement, as amended; (iv)
issue of any additional legal instrument or permission.
evidence that the area being assigned is actually
The development lease for exploitation of oil and/or gas operational through at least one oil production well; and (v)
under a concession agreement in Egypt is usually granted the final terms of the assignment between assignor and
for 20 years, extendable in periods of usually 5 years assignee.
subject to terms and conditions, but in no event beyond a
With respect to asset or corporate sale/change of control,
total of usually 35 years.
the Fuels Material Law does not directly address the notion
Does the Government have any right to participate of an underlying ‘change of control’ of a contractor
and be carried in the Licence? If so, please describe company, nor the threshold as to when such change
the extent of this entitlement. amounts to an indirect assignment.
Is there any mechanism for recovery of carry Are there any pre-emptive rights reserved to any
costs? Government entities in the event of a proposed
The Government is heavily involved in its participation in so, what are the terms upon which such entities are
the sharing of production oil and gas proceeds. Indeed, allowed to acquire the interest?
Egyptian laws require that EGPC/EGAS/GANOPE have an
equal share participation in the Operating Company mainly EGPC/EGAS/GANOPE retains pre-emptive rights in the
in order to have a logistical/supervisory role, and to make typical concession agreement. Upon receipt of the final
sure that expenses and costs are properly amortised, terms and conditions of the intended assignment in
production proceeds are properly shared, taxes are conjunction with the application for the assignment,
properly accounted for, and the works are largely carried EGPC/EGAS/GANOPE has 60 days to exercise their pre-
out in conjunction with national energy policies set by the emptive right and acquire the interest intended to be
Government. assigned under the same terms and conditions, subject
only to Government approval as above.
Where EGPC/EGAS/GANOPE fail to exercise their option
within the 60 days, the assignor has the right to proceed
Yes, it has a 50% participation in the Operating Company. with the assignment, and EGPC/EGAS/GANOPE must
enter into good faith efforts to finalise the new agreement
for the new operating company. In the event of failure to
Assignment agree within 120 days, the assignor shall nonetheless have
the right to assign the proposed interests to the assignee.
held under a Licence whether by asset or corporate Economic Support
sale/change of control?
If any, what are the timing requirements and costs supports commonly required to be provided by oil
of obtaining such Government and/or regulatory and gas companies?
approvals?
No, but an applicant contractor company is usually
No rights, privileges, duties, or obligations in an existing required to submit documented evidence of financial and
concession agreement may be assigned or leased to a technical capabilities to fulfil any oil and gas related
third party, in whole or in part, directly or indirectly without operations and obligations.
prior written Government consent.
A request for approval of an assignment must be submitted

to the Government demonstrating: (i) that the current
22
Are security deposits required in respect of work In practice, either a farm-out agreement or a joint operating
commitments or otherwise? agreement usually sets out the parties’ agreements relating
to abandonment of activities and/or decommissioning.
Yes, a bank letter of guarantee is usually required covering
Egypt
Commonly, all assets revert to EGPC and all liabilities and
the minimum amount required by the concession holder to
obligations whether financial or contractual remain those of
spend during the first exploration period, reduced quarterly
the contractor company, including any assignees.
during the period of expenditure. Similar letters of
guarantee are usually required for extensions of the period Otherwise, the work programme and budget for the
of expenditure. Operating Company, as agreed between the contractor
company and EGPC/EGAS/GANOPE, should address and
account for eventual decommissioning activities.
Abandonment and
Decommissioning

To date there is no legislation covering decommissioning

activities.
23
Equatorial Guinea
Conducting oil and gas activities in Equatorial Guinea
Laws and regulations MMH is empowered to award oil and gas contracts to
persons by means of competitive international public
List the main legislation governing petroleum tender in accordance with the rules to be established by
exploration and production activity in your country. MMH, or by means of direct negotiation, obtaining, to the
extent possible, the most favourable terms possible for the
The Hydrocarbons Law No. 8 of 2006 (the “Hydrocarbons
State.
Law”) governs all aspects of exploration, evaluation,
development, transportation, distribution, storage,
abandonment, refining and marketing in Equatorial Guinea Entry requirements
(“EG”).
Additionally, the following legislation governs activity in

exploration, production and trading:
― Petroleum Regulation No. 4 of 2013 (the “Petroleum your country? For instance, is it necessary to
Regulations”) define and establish the procedures incorporate a subsidiary, or register a branch?
and performance standards to be observed (and
penalties for failures) in carrying out petroleum Contractors who are not Equatoguinean persons must
operations in EG under the Hydrocarbons Law. establish a representative branch in EG within six (6)
months of the entry into force of a Petroleum Sharing
― Tax Law No. 4 of 2004 (“Tax Law”) Contract (“PSC”) or other contract and must establish and
― Local Content Regulation No. 1 of 2014 (the “Local maintain a bank account in EG with a minimum balance
Content Regulations”) which addresses local content sufficient for guaranteeing their obligations.
issues, as well as national and regional participation Contractors producing hydrocarbons from a contract area
on business activities. must establish Equatoguinean headquarters in bricks and
― Decree 127 of 2004 in respect of Local Shareholding mortar premises within EG.
Requirements (“Local Shareholding Regulations”) MMH will only enter PSCs with persons who have proven
Uniform Acts, in particular the OHADA Companies Act, technical and financial capability and experience, and
adopted by the Organisation for the Harmonisation of applications such for contracts must be submitted to MMH
Business Law in Africa “OHADA”), of which EG is a accompanied by documentation evidencing these
Member State, apply to companies carrying out oil and gas requirements. For PSCs to be effective, they must first be
activities in EG. ratified by the President of EG by or on the date of delivery
to the Contractor. No transfer of interests, assets, rights or
Oil and gas activities are subject to Exchange Control goods granted under the PSC occurs unless this takes
Regulations applicable within the Economic and Monetary place.
Community of Central Africa (“CEMAC”).
All persons wishing to perform hydrocarbon refining and
Identify the Government, regulatory and/or trading activities must obtain a license from MMH to do so.
regulating oil and gas activities. Are there any foreign investment approval
The Ministry of Mines and Hydrocarbons of Equatorial business in your country (e.g. a minimum local
Guinea (the “MMH”) is the government authority shareholding in the entity undertaking the activity)?
responsible for managing and regulating all activities in the
mineral and petroleum sectors in EG, including licensing. The Local Shareholding Regulations requires companies
incorporated in EG by foreign investors to have, as
shareholders, three (3) EG nationals or companies
24
Equatorial Guinea
exclusively held by EG nationals holding shares ― Corporate tax in the amount established in the Tax
representing no less than thirty-five percent (35%) of their Law.
share capital.
― Customs duties.
Local content provisions are set out in the Local Content
― Any windfall tax that may be imposed by the State.
Regulations which oblige companies to register with and
enrol in the Registry of Companies and the National Local In the oil and gas sector, companies operating in
Content Department of MMH before the start of their Equatorial Guinea for more than three (3) months in a
activities, regardless of the country of origin of its calendar year are considered resident. Residents are
shareholders. assessed on their worldwide income while non- resident
entities are subject to a 10% withholding tax on gross
All award of services contracts and technical work of legal,
income derived from sources in EG.
tax or accounting nature must be done in partnership with
Equatoguinean firms. Companies are required to request a Please outline the procedure to apply to the
listing of national companies identified as suitable to Government for an interest in a Licence in your
provide the required services from the National Local country. Please include details of cost and timing
Content Department of MMH. for obtaining such interest.
Companies must also have training and local hiring plans Contracts are either awarded by a competitive international
in place. This requires companies to invest in social public tender system that ensures concurrence and
projects and train Equatoguineans to take part in the competition between potential contractors, unless relating
petroleum operations sector. to reserved areas (as defined by MMH from time-to-time)
MMH audits local content compliance annually. where alternative processes can be adopted.
Cost and timing differ on a case by case basis, and are at

the discretion of MMH or other local authorities.
Licensing
Identify the main fiscal/legal model granting rights Licence?
Under the Hydrocarbons Law, activities comprising
Legal petroleum operations are divided into two (2) phases: (i)
PSCs entered into between Contractors and the State is the exploration period, and (ii) the production period.
based on the model PSC attached to the Hydrocarbons The initial exploration period is normally four (4) to five (5)
Law. The Petroleum Law provides for a right for the State years divided into two (2) sub-periods, extendable twice on
to enter into various types of contracts directly with third a yearly basis (i.e.: a maximum of 2 extensions of 1 year
parties with respect to reserved areas each).
Fiscal Although the Hydrocarbons Law specifies the above
Oil and gas interest holders and their associates are liable duration for the exploration period, MMH may, if it deems
for the following payment: appropriate amend the duration of the the exploration
period in the PSC.
― Royalties paid in the manner stipulated under the
relevant PSC which must provide for increasing rates The exploration and production phases are defined in each
based on daily production but with a minimum royalty PSC between the State and the Contractor.
of 13%. The State can request the royalty through The overall PSC term applicable must not exceed a period
MMH. It can be paid in cash or kind, fully or partially of 25 years. However, this term can be renewed by the
(generally in cash and in full). The royalty must be parties to a maximum period of 10 additional years.
paid monthly but can be subject to a more frequent
payment schedule at MMH’s discretion. Does the Government have any right to participate
and be carried in the Licence? If so, please describe
― Surface rentals paid annually and in the amounts
stipulated in the applicable PSC.
― Personal income tax in the amount stipulated under Is there any mechanism for recovery of carry
the Tax Law. costs?
There is strong Government presence in all projects

carried out in collaboration with international and foreign
25
Equatorial Guinea
investment. The Hydrocarbon Law states that participation With respect to a corporate sale, the transfer of ownership
of the State in the contract area is to be effected directly of more than fifty percent (50%) of the shares in the capital
through the national oil company (“GEPetrol”) by way of a of any person making up a Contractor, that affects the
carried interest of no less than 20% unless otherwise ownership of the rights under the relevant PSC, shall be
agreed expressly by the Government. deemed to be an assignment of contractual rights under a
PSC and consequently subject to the above terms and
Provisions in relation to carrying costs and their recovery
conditions. The acquisition of the parent company of a
are negotiated and agreed to in the relevant PSC.
Contractor by another person, or the merger of the parent
Does the Government have any right to participate company with another Person shall not be subject to the
in the operatorship of the Licence? said conditions.
The Government has the right to participate in the Are there any pre-emptive rights reserved to any
operatorship of the PSC. The designation of an operator or Government entities in the event of a proposed
any change of an operator is subject to the prior approval assignment of an interest held under a Licence? If
of MMH. so, what are the terms upon which such entities are
The assigning party must also promptly notify GEPetrol or

Assignment
the national gas company (“SONAGAS”) in writing of the
What Government and/or regulatory approvals are intention to assign and/or transfer rights under a PSC.
required for the acquisition of oil and gas interests Upon receipt of the notice, GEPetrol or SONAGAS has a
held under a Licence (whether by asset or preferential right to purchase the assigning Contractor’s
corporate sale/ change of control)? interest in the PSC that is proposed to be assigned,
transferred or otherwise disposed, on the same terms and
Under the Hydrocarbons Law, the assignment, transfer, or conditions as those offered to a bona-fide third-party
other disposition of the rights granted by any PSC is assignee. This right exists in addition to any rights of pre-
permissible only upon the written authorisation of MMH. emption granted to a GEPetrol/SONAGAS under the terms
Requests for assignment, transfer, encumbrance or other of a joint venture or other agreement.
disposition of rights and/or obligations must be submitted
to MMH with all information related to the proposed
transaction. Economic support
Upon the notice of intention to transfer, MMH will ensure Are parental guarantees or other economic
that the assignee(s) are technically and financially able to supports commonly required to be provided by oil
meet the contract obligations, accept the terms of the PSC and gas companies?
and any other related agreements, and are entities with
which MMH can legally conduct business. Are security deposits required in respect of work
Upon verification of this information, the assignment is
considered complete and any profits resulting from the The Hydrocarbons Law requires each party comprising the
assignment will be subject to the relevant taxation laws of Contractor to provide the State, within sixty (60) days of the
EG. effective date of the PSC, with a parent company
guarantee and an irrevocable letter of credit, from a first
MMH may at its sole discretion exempt an affected party class international financial institution acceptable to MMH,
from any of the above transfer requirements. which corresponds to that party’s share of the minimum
expenditure obligations of the Contractor in the exploration
If any, what are the timing requirements and costs
period. Both types of security documents are required to
remain valid and effective for six (6) months after the end
approvals?
of the exploration period.
In addition to the administrative requirement, the parties to
the transaction will be subject to a non- recoverable, non-
deductible fee determined by MMH. MMH may at its sole
discretion exempt an affected party from the payment of
fees.
26
Equatorial Guinea
Contractors must establish and contribute to a reserve fund
Abandonment and
to provide for all future abandonment. The reserve fund
Decommissioning must take the form of an escrow account to be opened in
the name of the Contractor and the State with an
What abandonment regime is in place? international financial institution acceptable to each of
them. The amount to be deposited by the Contractor, as
well as the timing of the deposits, must be established in
the abandonment plan approved by MMH. After the
Contractors must prepare and deliver to MMH a plan (for completion of all abandonment operations in accordance
MMH’s prior approval) for: (i) the abandonment of all wells, with the plan, if the reserve fund established is greater than
facilities and equipment; (ii) the rehabilitation of the the actual cost of abandonment liabilities, the account
landscape; and (iii) the continuation of petroleum balance is distributed between the Contractor and the
operations, if applicable, the earliest of: (a) six (6) years State, in the same proportion as the allocation of profit oil,
prior to the estimated commencement of abandonment at the time of abandonment operations. If the reserve fund
operations; (b) the date on which 50% or more of the is insufficient to cover the costs, the Contractor is liable for
recoverable hydrocarbons from a development and the remainder.
production area have been produced; or (c) one (1) year
On the abandonment of any contract area, the Contractor
prior to the termination of the applicable contract or the
must proceed to properly decommission the well in
proposed date of the abandonment of any production area.
question and take other measures to decommission
The abandonment plan must provide MMH with sufficient facilities and rehabilitate the landscape according to the
information to properly assess the future of the applicable approved abandonment plan, the applicable contract,
contract area from a technical, financial, safety and Hydrocarbons Law and good oil field practice.
environmental standpoint and include details of the reserve
fund.
27
Gabon
Gabon
Conducting oil and gas activities in Gabon
Laws and regulations ― Gabon Oil Company (Société Nationale

d’Hydrocarbures or ‘GOC’), established in August
List the main legislation governing petroleum 2011;
― Advisory commissions: the National Commission on
The main legislation relating to petroleum activities is Law Petroleum Products Prices (Commission Nationale
no. 011/2014 dated 28 August 2014 (the ‘2014 Des Prix des Produits Pétroliers or ‘CNPPP’) and the
Hydrocarbons Law’) which came into force on 15 Petroleum Revenue Monitoring Commission
September 2014. (Commission de Suivi des Recettes Pétrolières or
‘COSUREP’); and
Due to the general nature of the 2014 Hydrocarbons Law,
most of the specific provisions governing petroleum ― Regulatory agency: the 2014 Hydrocarbons Law
exploration and production are included in production creates a regulation authority. This role is exercised
sharing contracts (‘PSCs’). by the Department of Hydrocarbons (Direction
Générale des Hydrocarbures ‘DGH’) acting under the
Uniform Acts, in particular the OHADA Companies Act,
supervision of the MPH, which is the Government
adopted by the Organisation for the Harmonisation of
authority primarily responsible for the development
Business Law in Africa (Organisation pour l’Harmonisation
and regulation of the oil industry in Gabon. The
en Afrique du Droit des Affaires or ‘OHADA’), of which
creation of a new regulation authority in charge of
Gabon is a Member State, apply to companies carrying out
petroleum products prices was announced in the final
oil and gas activities in Gabon.
communiqué of the Council of Ministers on 29 January
Oil and gas activities are subject to Exchange Control 2015. Details are yet to be finalised.
Regulations applicable within the Economic and Monetary
Monétaire de l’Afrique Centrale or ‘CEMAC’). Entry requirements
Additionally, Decree no. 0673, dated 16 May 2011 What are the registration requirements for
(‘Decree 673’) regulating foreign direct investments in key becoming a licensee of an oil and gas production
economic sectors in Gabon is applicable in particular to sharing contract/licence/concession (‘Licence’) in
exploration and production. your country? For instance, is it necessary to
oversight bodies principally responsible for According to the 2014 Hydrocarbons Law, contractors can
regulating oil and gas activities. operate, unlike under the previous law, through a branch
during the exploration phase and have to incorporate a
The main institutions of the Gabonese hydrocarbons sector
local subsidiary and open a local bank account to carry on
include:
production activities.
― Government of Gabon (the ‘State’);
In addition, pursuant to the OHADA Companies Act which
― Ministry of Mines, Petroleum and Hydrocarbons is directly applicable in Gabon, any foreign company
(Ministère des Mines, du Pétrole et des having registered a branch must transform such branch
Hydrocarbures or ‘MPH’); into a local company after a maximum of 4 years (i.e. an
initial 2 year period, renewable once for a further 2 years).
― Ministry of the Economy and Foreign Investments
(Ministère de l’Économie et les Investissement
Étrangers or ‘Economy Minister’);
28
Are there any foreign investment approval ― Exclusive exploration authorisation (authorisation
requirements or restrictions when commencing exclusive d’exploration) under which the holder is
business in your country (e.g. a minimum local entitled to perform exploration works. This
Gabon
shareholding in the entity undertaking the activity)? authorisation is granted on an exclusive basis for a
maximum of 8 years (initial 6 year period with the
According to Decree 673, foreign investment in the
possibility of a maximum of two 1 year renewals); and
exploration and production of hydrocarbons is subject to
the prior approval of the Economy Minister who must ― Exclusive development and production
approve or disapprove the investment within a 2 month authorisation (authorisation exclusive de
period from the receipt of the request. In the absence of développement et d’exploitation) under which the
any response within this period the investment is deemed holder is entitled to perform production works on an
to be approved. exclusive basis. This authorisation may only be to a
Gabonese legal entity owning a bank account in
Pursuant to Exchange Control Regulations, any investment
Gabon. The production period is fixed at 10 years (15
exceeding CFAF 100 million must be declared to the
years for gas) with the possibility of two renewal
Economy Minister at least 30 days before the transfer of
periods of up to 5 years each.
funds to Gabon. Failing such declaration, a fine equal to
20% of the investment may be applied. The 2014 Hydrocarbons Law refers to the following 5 types
of contracts for upstream activities which may either be
granted by tender procedure or by direct negotiations with
the 2014 Hydrocarbons Law and must be reflected in
the MPH:
PSCs. The relevant undertakings relate to:
― Service contracts (Contrat de services) under which
― Training commitments;
geological and geophysical activities are conducted on
― Promotion of communities projects and projects with behalf of the State. Disclosure by the contractor of its
significant social impact; results is subject to prior approval of the MPH.
Transfer or disposal of the rights and obligations
― Promotion of research and development projects and
arising from this contract is subject to the prior
of technology transfer to Gabonese enterprises;
approval of the MPH;
― Preference for local employees and commitment to
― Technical assessment contract (Contrat
progressively replace foreign employees (in practice
d’évaluation technique) under which the contractor
the ratio of 80% of Gabonese employees has already
performs preliminary surface prospecting works in the
been imposed by trade-unions); and
surface area covered by a non-exclusive prospecting
― Priority to Gabonese sub-contractors who employ at authorisation. This contract is concluded for a non-
least 80% of Gabonese employees. renewable 18 month period. Transfer or disposal of
the rights and obligations arising from this contract is
forbidden;
Licensing
― Exploration contract (Contrat d’exploration) under
Identify the main fiscal/legal model granting rights which the State grants an exclusive exploration right in
to explore and produce oil and gas. the surface area covered by an exclusive exploration
authorisation. An exclusive exploration authorisation is
Legal granted for a maximum of 8 years (initial 6 year period
Contractors are granted rights to explore, develop and with the possibility of a maximum of two 1 year
produce oil and gas by obtaining both an authorisation renewals). Any commercial discovery must be notified
from the State and entering into a contract with MPH by the contractor within a 6 to 12 month period. Such
defining the terms of such authorisation. Details of the discovery will confer a preferential production right
relevant authorisations are as follows: within a 1 year period. It entitles the contractor to enter
into negotiations with the MPH to be granted an
― Prospecting authorisation (authorisation de exclusive development and production authorisation
prospection) under which the holder is entitled, on a and a production sharing contract. Transfer or
non-exclusive basis, to perform preliminary surface disposal of the rights and obligations arising from the
prospecting works. This authorisation is granted for a exploration contract is subject to the approval of the
non-renewable 18 month period; MPH and the State is granted a pre-emptive right;
29
― Production sharing contract (Contrat de production ― Surface area royalty: surface area royalty cannot be
et de partage de production) under which the State less than CFAF 50 per hectare, per year for the
grants an exclusive development and production right exploration phase and CFAF 5,000 per hectare, per
Gabon
in the surface area covered by an exclusive year for the production phase. Implementation and
development and production authorisation. The deductibility will be set by regulation.
production period is fixed at 10 years (15 years for
― Proportional mining royalty: proportional mining
gas) with the possibility of two renewal periods of up
royalty is based on the total extracted production set
to 5 years each. Transfer or disposal of the rights and
in PSCs and is negotiated between 13% and 17% for
obligations arising from this contract is subject to the
conventional areas and between 9% and 15% for
approval of the MPH and the State is granted a pre-
deep offshore. This royalty is not deductible for the
emptive right; and
purposes of corporate income tax calculations.
― Exploration and production sharing contract
(Contrat d’exploration et de partage de production)
on profits at the rate of 35% applicable to oil activities.
under which the State grants an exclusive exploration
right and, in case of a discovery, an exclusive right of ― VAT: hydrocarbons activities, as well as goods and
production. The exploration period must not exceed 8 services purchased locally or imported from a list of
years (initial 6 year period with the possibility of providers approved by the State are exempt from
renewal). The production period is 10 years (15 years VAT.
for gas) with the possibility of two renewal periods of
― Customs: the CEMAC customs regime is applicable.
up to 5 years each. Transfer or disposal of the rights
Imports exclusively related to prospecting and
and obligations arising from this contract is subject to
exploration are exempted from customs duties. A
the approval of the MPH and the State is granted a
reduced rate of 5% applies to imports related to
pre-emptive right.
production. Approved subcontractors are also entitled
A standard form for each contract will be provided by to the special customs regimes.
ministerial order.
― Transfer duty: transfer of an interest in a PSC,
All petroleum contracts require prior approval by the shareholdings or a change of control are subject to a
relevant department of the State. They also have to be transfer duty of 3% of the real value of the rights
signed by the MPH, counter-signed by the Economy transferred in addition to capital gains tax. An
Minister and approved by decree, except for service and exemption applies for inside group transfers.
technical assessment contracts.
― Financial contributions for diversified and
Contracts entered into and permits granted under the hydrocarbons investments (‘PID’ or ‘PIH’):
previous hydrocarbon law remain in full force and effect respectively 1% and 2% of the annual turnover, 75%
until they expire. However, since the entry into force of the of the PID or PIH is cost recoverable.
2014 Hydrocarbons Law, they may not be extended.
― Contributions to support funds: contributions to
The 2014 Hydrocarbons Law expressly includes a right to various support funds are provided for and are to be
renegotiate the PSCs in case of hardship as defined in that specified by regulation.
law.
― Rehabilitation fee amounts: new provisions have
Rights arising from the above mentioned authorisations been introduced in the 2014 Hydrocarbons Law with
cannot be subject to division, transfer, farm-out, respect to the establishment of a rehabilitation fund.
transmission or security.
In addition to the above fiscal regime, Gabon has a
Fiscal prescribed system for revenue sharing in relation to
under the Gabonese tax code, the 2014 Hydrocarbons Law ― Profit oil cannot be less than 55% of total production in
and the relevant petroleum contract: conventional areas and 50% in deep offshore. Other
calculation methods may be negotiated with the State;
― Bonuses: bonuses are usually negotiated on the
signing of PSCs and are not deductible for the ― Costs oil is limited to 65% in conventional areas and
purposes of corporate income tax calculations. 50% in deep offshore; and
Bonuses must be paid at every stage (signing, moving
to production phase, extension or renewal,
amendment, performance achievement).
30
― Contractors have the obligation to supply the domestic
Assignment
market with a defined part of their production pursuant
to the terms provided by regulations.
Gabon
for obtaining such interest. If any, what are the timing requirements and costs
Access to the Gabonese petroleum sector is granted to of obtaining such Government and/or regulatory
companies having the required technical and financial approvals?
capabilities, either by tender procedure or by direct The rights under technical assessment contracts cannot be
negotiations with the MPH. transferred to third parties. All other assignment transfers
The MPH initiates and undertakes the tendering procedure. of rights in the contracts described within the 2014
Modalities for such procedures remain to be defined by Hydrocarbons Law are subject to the prior approval of
regulation. MPH.
Any change of control in a company is now expressly

deemed to be an assignment and is subject to the approval
Licence?
of the MPH and subject to the State pre-emptive right.
See the ‘Legal’ section above for details of durations for
the relevant Licences. Are there any pre-emptive rights reserved to any
Does the Government have any right to participate assignment of an interest held under a Licence? If
and be carried in the Licence? If so, please describe so, what are the terms upon which such entities are
the extent of this entitlement. allowed to acquire the interest?
Is there any mechanism for recovery of carry The State is granted a pre-emptive right in relation to
costs? assignment of exploration contracts, production contracts
and joint exploration and production contracts.
The 2014 Hydrocarbons Law includes several provisions
regarding State participation in PSCs and in the company The State pre-emptive right must be exercised within 60
applying for or holding an exclusive production days of notification by the transferor and does not apply to
authorisation. The main provisions dealing with state transfer between affiliates.
participation in the 2014 Hydrocarbons Law are:
― State participation in PSCs: a 20% interest in each Economic support

PSC shall automatically be allocated to the State. All
costs and risks associated with that interest are to be Are parental guarantees or other economic
carried by the contractor. An additional participation supports commonly required to be provided by oil
may be negotiated, at normal market conditions, and gas companies?
between the contractor and the State;
Neither the previous hydrocarbons law nor the 2014
― State participation in production shareholding: the Hydrocarbons Law requires a parent company guarantee
State in entitled to purchase no more than 20% of the where one or several of the companies forming the
share capital of any company applying for or holding contractor entity are subsidiaries of an oil company.
an exclusive production authorisation at normal However, PSCs generally include an ultimate parental
market conditions; and guarantee to be given in the form attached to the PSCs.
― GOC’s participation: GOC is entitled to acquire a Security interests to be provided will be governed by the
maximum of 15% in both PSCs at normal market provisions of the OHADA Uniform Act organising
conditions. Securities, applicable in Gabon.
Does the Government have any right to participate Are security deposits required in respect of work
in the operatorship of the Licence? commitments or otherwise?
Petroleum operations may be carried out by the State itself Securities in respect of work commitments are not
or through third parties, in particular through GOC. expressly provided for in the 2014 Hydrocarbons Law.
31
However, such securities or other types of securities may and rehabilitation plans. Submissions are to be made to
be negotiated in the PSCs. MPH.
Gabon
In addition, the 2014 Hydrocarbons Law now provides for

an obligation on contractors pay to an annual rehabilitation
Abandonment and
fee amount dedicated to a local rehabilitation fund for
Decommissioning abandonment works. These payments are held in a ring
fenced bank account by the MPH.
Contractors also have information duties towards
Are security deposits required in respect of future employees and authorities and local communities within
decommissioning liabilities? the surrounding areas about the risks and hazards of their
activities.
The 2014 Hydrocarbons Law restates the obligation on
companies to submit and comply with impact studies, Moreover, the 2014 Hydrocarbons Law creates an
environmental management plans and decommissioning obligation of subscribing a local insurance covering 25% of
the estimated amount of risks of future liability.
32
Ghana
Conducting oil and gas activities in Ghana
Laws and regulations resources, the Commission has the authority to make
regulations, issue permits and carry out necessary
List the main legislation governing petroleum inspections and audits related to the activities of petroleum
exploration and production activity in your country. companies operating in the upstream and midstream
sectors.
Petroleum exploration and production activities are
regulated by a number of laws in Ghana: The Environmental Protection Agency (the ‘EPA’) is
responsible for enforcement of Ghana’s environmental
― The Petroleum Commission Act, 2011 (Act 821)
laws. The EPA ensures that exploration and development
(‘Petroleum Commission Act’);
of oil and gas is undertaken in an environmentally friendly
― The Ghana National Petroleum Corporation Law, manner.
1983 (PNDCL 64) (‘GNPC Law’);
The Ghana National Petroleum Corporation (the ‘GNPC’) is
― Petroleum (Exploration and Production) Act, 2016 (Act responsible for the development, production and disposal
919) (‘Petroleum Exploration Law’); of petroleum. The GNPC is required to ensure that Ghana
obtains the greatest possible benefits from the
― Petroleum Commission (Fees and Charges)
development of petroleum resources. The GNPC
Regulations, 2015 (L.I. 2221) (“Charges
participates in petroleum operations on behalf of Ghana
Regulations”)
with contractors under the Petroleum Agreements.
― The Petroleum (Local Content and Local Participation)
The National Petroleum Authority (the ‘NPA’) is also given
Regulations, 2013 (L.I. 2204) (‘Local Content Law’);
a broad mandate to regulate, oversee and monitor
― Petroleum Revenue Management Act, 2011 (Act 815) activities in the downstream petroleum industry. In
(‘PRMA Act’); particular, it sets prices and supervises the bulk storage
and transportation of petroleum products.
― Petroleum Revenue Management (Amendment) Act,
2015 (Act 893) (‘Amended PRMA Act’);
― Environmental Assessment Regulations, 1999 (L.I. Entry requirements

1652) (‘Environmental Regulations’); and
― Petroleum Income Tax Act, 1987 (PNDCL 188). becoming a licensee of an oil and gas production
The Minister of Petroleum (the ‘Minister’) provides the

overall policy direction in the management of oil resources
in Ghana. The Attorney General, under the Ministry of
Justice, assists the Minister in the negotiation and drafting
of petroleum agreements (the ‘Petroleum Agreement’) Under section 4(2) of the Local Content Law, a foreign
and the required laws and regulations regulating the oil and company must incorporate a subsidiary company and allow
gas sector. an indigenous Ghanaian company at least 5% equity
The Petroleum Commission (the ‘Commission’) regulates participation in the subsidiary company.
and manages the utilisation of petroleum resources in In practice, most foreign companies register a branch office
Ghana. It also coordinates the policies put in place by the during the process of negotiating the Petroleum Agreement
Minister. In regulating the utilisation of petroleum with the Government and then incorporate subsidiary
33
companies before commencing petroleum operations in ― Royalties: The Republic of Ghana is entitled to a
accordance with the law. portion of petroleum produced and saved and not
utilised in petroleum activities from each field. This
Ghana
portion is calculated as a percentage of gross daily

Licensing production rates without regard to any prior
deductions. The royalty shall be delivered to the
Identify the main fiscal/legal model granting rights Republic of Ghana in kind unless the Minister directs
to explore and produce oil and gas. in writing that the royalty shall be paid in cash. The
Legal percentage of royalty payable by the contractor is
negotiated by the contractor and the government in
Under the Petroleum Exploration Law, all petroleum the Petroleum Agreement.
existing in its natural state within the jurisdiction of Ghana
is the property of the Republic of Ghana and is vested in ― Annual acreage fees: The Petroleum Exploration
the President on behalf of and in trust for the people of Law also provides that the contractor is required to
Ghana. The Minister is empowered by the Petroleum pay annual acreage fees, in respect of the area to
Exploration Law to directly represent the Republic of which the Petroleum Agreement relates, during the
Ghana in negotiating for and entry into a Petroleum initial exploration period (and any extensions) unless
Agreement. otherwise exempted from such payments under a
Petroleum Agreement.
The Petroleum Exploration Law gives GNPC the authority
to engage in the exploration, development and production ― Permit fees: The contractor is required to register with
of petroleum within the jurisdiction of Ghana without a the Commission in order to obtain a permit to
Petroleum Agreement. GNPC participates in all Petroleum undertake petroleum operations. The fees to be paid
Agreements and discharges the Government’s obligations in order to obtain a permit are assessed by the
under the Petroleum Agreement. Any other person who Commission. The Commission requires all permits to
intends to engage in the exploration, development or be renewed each year.
production in the petroleum upstream sector is required to
enter into a Petroleum Agreement with the Government
and GNPC.
The Petroleum Agreement extensively specifies the terms for obtaining such interest.
and conditions for the grant of the petroleum rights, the
The process for obtaining an oil or gas interest in Ghana is
duration of the rights and the royalties to be paid to the
by applying for an offshore or onshore block to the
Government. It also specifies other important terms which
Minister. The applicant may then be invited to inspect data
must be aligned with Government policy.
on available blocks at the Commission for a non-
Under the new Petroleum Exploration Law, the Minister (in refundable fee of US$1,000 on completion of a successful
consultation with the Commission) may grant a presentation by the applicant to the Commission.
Reconnaissance Licence to allow contractors the right to
The applicant is then required to make a formal application
undertake data collection, processing, interpretation or
to the Minister for any block it wishes to obtain an interest
evaluation of petroleum data in the area specific to the
in. A non-refundable fee of US$10,000 is paid on
licence. A Reconnaissance Licence shall be for a duration
submission of this application.
not exceeding 3 years.
An evaluation committee is set up by the Minister to review
Fiscal
and evaluate the application. On completion of the
― Corporate Tax: The Petroleum Exploration Law evaluation, recommendations are made to the Minister for
provides the fiscal model for granting rights to explore his consideration. If the application is considered
and produce oil and gas in Ghana. Under the successful, the Minister sets up a negotiation team to
Petroleum Exploration Law, a contractor is required to negotiate a Petroleum Agreement with the applicant.
pay corporate tax, including income tax and capital Where the application is unsuccessful, the applicant is
gains tax in accordance with applicable law, except advised accordingly.
when exempted under a Petroleum Agreement. Under
The draft Petroleum Agreement is prepared following
the Income Tax Act of Ghana 2015 (Act 896),
successful negotiation between the applicant and the
petroleum companies are subject to corporate tax at
Government negotiation team and further deliberations are
the rate of 35%.
held between the Minister, the Minister of Finance, the
34
Minister of Justice and Attorney General and the Minister petroleum operations which includes forming a joint
of Environment, Science and Technology. management committee to conduct and manage the
petroleum operations. GNPC maintains only a carried
Ghana
The negotiated draft is further discussed and approved by
interest with respect to exploration and development
the Cabinet and signed by the Parties before it is
operations.
forwarded to Parliament for ratification.
The PRMA Act and the Amended PRMA Act provide the
What is the customary duration of the relevant mechanism for the payment of the participation and carried
Licence? interest of the Government. The GNPC receives an annual
Section 4 of the Petroleum Exploration Law provides that a disbursement from the Petroleum Holding Fund (‘PHF’) for
Petroleum Agreement shall be valid for a total period not the payment of its carried and participating interest in
exceeding 25 years. The parties can negotiate for an petroleum operations under its Petroleum Agreements.
extension of the period where the production from a field is There is no specific provision under the law for recovery of
projected to extend beyond the original term of the the carried costs. Before the Amended PRMA Act, a
petroleum agreement. In the alternative the Minister may contractor could recover carried costs from the production
choose to execute a new Petroleum Agreement. The revenues. But, under the Amended PRMA Act, all
extension or execution of a new Petroleum Agreement is revenues are required to be paid into the PHF without any
subject to Parliamentary approval. deductions. Thus, contractors would have to negotiate
The Petroleum Exploration Law fixes the maximum period terms of recovery of the carried and participating interest
for petroleum exploration at 7 years. This is normally with GNPC, including debt security structures. The
divided into an initial 3 year phase followed by up to three contractor can also negotiate for tax credits with the
extensions within the total exploration period. Depending Commissioner General of the Ghana Revenue Authority.
on the size of the contract area, these phases can be The PHF is a fund created under the PRMA to hold all
negotiated. The contractor is required to relinquish part of petroleum revenue and taxes received from contractors,
the contract area at each extension of the exploration subcontractors and licensees operating in the upstream
period. and midstream petroleum sectors in Ghana.
A relinquishment of at least 50% of the contract area is
required if the Contractor elects to enter into a first
extension of the exploration period. If the Contractor elects
to enter into a second and third extension, the retained As above, the Petroleum Exploration Law does grant a
contract area shall not exceed 25% of the original contract right to the Government to participate but the GNPC
area. The detailed percentage of relinquishment is subject generally limits its participation in petroleum operations to
to negotiation in the Petroleum Agreement. participating in a joint management committee.

and be carried in the Licence? If so, please describe Assignment
Is there any mechanism for recovery of carry required for the acquisition of oil and gas interests
costs? held under a Licence (whether by asset or
The Government has a right, under the Petroleum corporate sale/change of control)?
Exploration Law, to participate in the operation of the
petroleum operations on a declaration of commercial
discovery made by the contractor. GNPC shall hold an
approvals?
initial participating carried interest of 15% for exploration
and development and have an option to acquire an The Petroleum Exploration Law specifically prohibits a
additional participating interest as determined in the contractor from assigning its rights and obligations in a
petroleum agreement. Any additional interest acquired by subcontract, in whole or in part, to a third party without the
GNPC shall be a paying interest in respect of costs written consent of the Minister.
incurred in the conduct of petroleum activities other than
The law further prohibits the contractor (and any
exploration costs.
subcontractor) from transferring any share or shares in its
The extent of the entitlement is not specified. In practice, incorporated company to an investor, either directly or
GNPC limits its participation to the management of indirectly, without the written consent of the Minister, if the
35
effect of such a transfer is to give the third party control of Are security deposits required in respect of work
such a company or to enable the third party to take over commitments or otherwise?
the interests of a shareholder who owns 5% or more of the
Ghana
The guarantees described above can be provided in the

shares in the company.
form of performance bonds.
Approval of such a transfer must be sought by making a
formal application to the Minister, who can refuse to
provide such approval at his discretion. Abandonment and
Are there any pre-emptive rights reserved to any Decommissioning
so, what are the terms upon which such entities are Are security deposits required in respect of future
allowed to acquire the interest? decommissioning liabilities?
GNPC has a pre-emption right with respect to the disposal Licensees or contractors that operate a petroleum facility
of petroleum interests by a contractor under a Petroleum are required to submit a decommissioning plan to the
Agreement. The GNPC has 90 days within which to Minister for approval.
exercise such right after it has been notified.
The decommissioning plan shall be submitted not more
than 5 years and not later than 2 years before the date on
Economic support which the use of the petroleum facility is expected to
permanently cease operation or the license or the
Are parental guarantees or other economic Petroleum Agreement to which the decommissioning plan
supports commonly required to be provided by oil relates will expire.
and gas companies?
All licensees and contractors are required to establish a
Under section 58 of the Petroleum Exploration Law, decommissioning fund.
licensees, contractors and subcontractors are required to
With respect to Abandonments, contractors are required to
provide the Minister with performance bonds or guarantees
submit an immediate notice of the decision to abandon a
as the Minister may require for fulfilment of the obligations
well to the Commission. Once an abandonment notice is
undertaken under the licence and for possible liabilities
submitted, the Contractor is required to treat and plug the
arising out of the petroleum activities under the licence or
abandoned well.
Petroleum Agreement.
Under the Environmental Regulations, every contractor is
The contractor is also required to provide particulars of its
required to provide a reclamation plan which will be
capital structure for the exploration, development and/or
followed on decommissioning. In addition, the contractor is
production activities.
required to post a reclamation bond in the form of a
security deposit with the EPA. In practice, the EPA and the
contractor would negotiate the terms of a reclamation
security agreement as well as the security deposit to be
posted by the contractor.
36
Guinea
Conducting oil and gas activities in Guinea
authorisation for recognition of oil (autorisation de

Laws and regulations reconnaissance) or an oil contract (‘Oil Contract’).
Law L/2014/No/034/AN regulating the oil sector dated 23 business in your country (e.g. a minimum local
December 2014 (the ‘Petroleum Act’) shareholding in the entity undertaking the activity)?
Identify the Government, regulatory and/or According to Article 2 and 6 of Order A/95/3449 of 28 July
oversight bodies principally responsible for 1995 governing the administrative procedure of the
regulating oil and gas activities. establishment of oil installations in Guinea, a certificate of
technical validation and a certificate of compliance of the
The upstream oil sector is under the supervision of the oil industry are required.
Ministry of Hydrocarbons (the ‘Ministry’), and is managed
by two entities:
― The Office Guinéen de Recherche et de Promotion

Licensing
Pétrolières (‘OGRPP’), which is in charge of the
implementation of the Government’s policy on
research and production of hydrocarbons. It is the sole
State authority in the field of exploration of liquid and Legal
gaseous hydrocarbons.
The Petroleum Act states that any oil and gas deposits
― The Société Nationale du Patrimoine Pétrolier, which located in Guinean jurisdiction are held by the State,
is a public institution in charge of managing the oil however the Government may grant permits (Oil Contracts)
wealth of the State (‘SNPP’). which confer exclusive rights to explore and produce
petroleum and gas materials.
Oil Contracts shall include provisions to the following:

Entry requirements
― Perimeter of the exploration permit or the contractual
What are the registration requirements for area;
sharing contract/licence/concession (‘Licence’) in ― Duration of the contract and different periods of
your country? For instance, is it necessary to exploration and exploitation;
incorporate a subsidiary, or register a branch? ― Minimum work commitments for each exploration
There are no restrictions on the ability of foreigners to own period;
all or part of companies in any industry. Guinean law does ― Bank guarantee for the minimum work commitments
not distinguish between the quality of the shareholders of for each research period;
the company and the shares that the foreigners have in the
company, the only requirement is that a shareholder is not ― Budgets regarding the rehabilitation plan;
subject to any prohibition, including incapacity or ― Terms and conditions of transfer of facilities at the end
incompatibility under the Uniform Act on the Commercial of the oil activities;
General (Article 7 of Company Law).
― Rights and obligations of the parties;
The State can begin oil works either directly or through a
national company. No one, except SNPP, can carry out oil ― Commercial discovery and development of the
operations if the State has not previously issued an deposit;
37
― Property of the production and, if applicable, its Any entity which intends to carry out mining exploration or
distribution between the parties, remuneration and exploration activity, is required to obtain authorisation from
Guinea
eventual repayment of the holder, determination of oil the relevant authorities through an international tender
prices; procedure or through a direct negotiation procedure with
the State.
― Modalities for the participation of the Government or a
national company, rules of the association with the The hydrocarbons exploration authorisation:
holder;
― International tender procedure:
― Financial, tax and customs clauses;
(a) A tender is open by a decree of the Chief of State
― Realisation of the contract in the various on a proposition of the Ministry.
contingencies;
(b) Terms and conditions of the procedure are
― Employment and training of the local workforce; subject to the approval of the Ministry.
― Legal clauses on the applicable law, the stability of (c) The starting date and the place where the
conditions, any event of force majeure and dispute submission of the application shall be made are
settlement; and specified in specifications published at the
OGRPP.
― Terms of assignment and transfer of the Oil Contract.
(d) After consideration of the offer, the identity of the
Fiscal
selected tenderer shall be published at the
The Petroleum Act has implemented the following tax OGRPP before the signing of the Oil Contract.
obligation:
― Direct negotiation:
― Corporate tax: Oil Contract holders are subject to
(a) A decree specifying the identity of the applicant
corporate tax derived from oil activities carried out
and the concerned block is published at the
within the territory of Guinea. If an Oil Contract holder
OGRPP.
has several Oil Contracts, the corporate tax is applied
separately for each Oil Contract. (b) The tender and the negotiation is made in respect
of a template of an Oil Contract duly approved by
― Tax on profits: Taxable profit is the net income that is
the Chief of State and published at the OGRPP.
determined in accordance with the result of oil
operations. The net income is established after (c) At the end of the negotiation the OGRPP shall
deduction of all expenses incurred for the purposes of submit to the Ministry the template of the Oil
petroleum operations. Contract at least 30 days before signing.
― Value added tax: Oil Contract holders are subject to (d) The Oil Contract must be jointly signed by the
the payment of VAT. Ministry and the Ministry of Finance then ratified
by the National Assembly. Once ratified, it is must
Holders of Oil Contracts are exempt from all other direct
be enacted by decree of the Chief of State and
taxes of turnover relating to petroleum operations,
published in the Guinean Official Gazette. The
including the production tax, the tax on business and
effective date of the exploration authorisation is
stamp duty.
the date of publication of the Oil Contract in the
Please outline the procedure to apply to the Official Gazette.
Government for an interest in a Licence in your The exploitation authorisation:
for obtaining such interest. ― In case of establishment of commercially exploitable
deposit, the holder of the exploration authorisation (Oil
The authorisation of hydrocarbons recognition: Contract for exploration) can request an exploitation
Provides the holder with a right to undertake preliminary authorisation at the OGRPP. The applicant shall
recognition work in a perimeter not covered by an Oil specify in this request the perimeter where the
Contract. It is granted for a maximum period of one year. exploitation will be carried out and submit a
development plan with the estimated costs for the
When granted, an authorisation of hydrocarbons development.
recognition research is subject to an order of the Ministry
upon proposal of the OGRPP. ― The development plan and its costs are subject to the
approval of the Ministry. It must include information
38
relating to the description of the work to be performed, Does the Government have any right to participate
the schedule of the realisation of the exploitation and be carried in the Licence? If so, please describe
Guinea
activities, its costs, terms and conditions of the the extent of this entitlement.
financing project, environmental and social impact
assessment and a rehabilitation program. Is there any mechanism for recovery of carry
costs?
― The granting of the exploitation authorisation is
subject to an order following the adoption of the The Government reserves the right to participate, directly
development plan. or through a local company, in oil operations. To the extent
that it participates, the Government / local company shall
What is the customary duration of the relevant bear its share of the expenses required for the oil
Licence? operations. The form, terms and conditions of this
participation are specified in the Oil Contract.
There are two types of authorisation: (i) exploration
authorisation; and (ii) exploitation authorisation. An Does the Government have any right to participate
authorisation will expire automatically at the end of each in the operatorship of the Licence?
term, unless certain conditions allowing it to advance to the
next term have been fulfilled. If the Government / local company participate in oil
operations it will become a party to the joint operating
The exploration authorisation contract, which specifies rights and obligations of each
The duration of an exploration authorisation or the party in respect of the Oil Contract. It also provides rules to
exploration period of an Oil Contract is 8 years from the jointly undertake and monitor the oil activity.
date of the effectiveness of the Oil Contract. The The approval of the Ministry is required prior to the change
exploration period is split into three stages and the duration of an operator.
of each is defined in the Oil Contract. It includes an initial
term and two eventual renewal stages. The 8 years may be
extended if needed to allow the completion of any Assignment
exploration drilling in progress.
The Oil Contract holder is required to notify the OGRPP
within 30 days from the date of the closure of the research
and submit a document specifying information on the
discovery.
The Oil Contract holder may apply for an assessment If any, what are the timing requirements and costs
authorisation (autorisation d’évaluation) to carry out of obtaining such Government and/or regulatory
assessment activities of the discovered hydrocarbons. It is approvals?
issued for a maximum period of 18 months. An exceptional The assignment of any interest, right or obligation to a third
extension period of 6 months may be granted. party under an Oil Contract is subject to the prior consent
The exploitation authorisation of the Ministry under the conditions set in the Oil Contract.
The form of the assignment agreement is subject to the
The duration of an exploitation authorisation is 25 years for approval of the Ministry.
the exploitation of crude oil and 30 years for the
exploitation of natural gas but the Oil Contract may provide The assignment of interests to an affiliate is subject to a
an additional duration for a maximum of 10 years if simple notification to the Ministry, under the conditions set
required by the Oil Contract holder and if there is feasibility in the Oil Contract.
of commercial production of hydrocarbons beyond the end A change of control must be notified to the Ministry within
of the initial period. the 10 days following its effective date.
Before applying for an exploitation authorisation, a
temporary authorisation of exploitation for 6 months can be
issued to the Oil Contract holder to allow for the
preparation of a development plan required for the
exploitation.
39
Are there any pre-emptive rights reserved to any Are security deposits required in respect of work
Government entities in the event of a proposed commitments or otherwise?
Guinea

An Oil Contract holder is responsible for any damages
relating to the oil activities. As such, it is required to
subscribe to an insurance policy at an entity performing
Pre-emption rights are recognised to the extent that they insurance activities in Guinea.
have been contractually agreed between the relevant
parties. There are no state-imposed pre-emption rights.
Abandonment and
Economic support Decommissioning
supports commonly required to be provided by oil Are security deposits required in respect of future
and gas companies? decommissioning liabilities?
As a general rule, the oil and gas companies are required The Oil Contract holder may waive its rights to the Oil
to have the technical and financial capacity to conduct oil Contract under the conditions set out in the Oil Contract if it
operations. has fulfilled its contractual obligations.
The Oil Contract holder may also waive part of its research
perimeter at any time during the exploration period.
40
Ivory Coast
Conducting oil and gas activities in Ivory Coast
Laws and regulations ― Centre for the Promotion of Investments in Ivory Coast
(Centre de Promotion des Investissements en Côte
List the main legislation governing petroleum d’Ivoire or ‘CEPICI’) in charge of advising the
exploration and production activity in your country. Government on questions regarding the
implementation of the Petroleum Code; and
The main legislation relating to petroleum activities is Law
no. 96-669 dated 29 August 1996, as amended by ― Société Nationale d’Opérations Pétrolières de la Côte
Ordinance no. 2012-369 dated 18 April 2012, and d’Ivoire or (‘PETROCI’) the national company for oil
implementing decree no. 96-733 dated 19 September 1996 and gas operations, established by decree in 1975.
(the ‘Petroleum Code’).
Due to the general nature of the Petroleum Code, most of Entry requirements
the specific provisions governing petroleum exploration
and production are included in petroleum contracts What are the registration requirements for
(‘Petroleum Contracts’) which implement the principles of becoming a licensee of an oil and gas production
the Extractive Industries Transparency Initiative. sharing contract/licence/concession (‘Licence’) in
Harmonisation of Business Law in Africa (Organisation
pour l’Harmonisation en Afrique du Droit des Affaires or According to the Petroleum Code, any contractor carrying
‘OHADA’), of which Ivory Coast is a Member State, apply out petroleum activities in Ivory Coast is required to hold a
to companies carrying out oil and gas activities in Ivory Petroleum Contract. Contractors may operate through a
Coast, especially the OHADA Companies Act. local subsidiary for the whole duration of the Petroleum
Oil and gas activities are subject to exchange control Contract or through a branch.
regulations applicable within the West African Economic Pursuant to the OHADA Companies Act which is directly
and Monetary Union (‘WAEMU’) and the Economic applicable in Ivory Coast, any foreign company having
Community of West African States (‘ECOWAS’). registered a branch must transform such branch into a
local company after a maximum of 4 years (i.e. an initial 2
year period, renewable once for a further 2 years).
regulating oil and gas activities. Are there any foreign investment approval
The main institutions of the Ivorian hydrocarbons sector
include:
― Ministry of Mines, Petroleum and Energy (Ministère
Du Pétrole et de L’energie or ‘MMPE’); Neither the Investment Code of 7 June 2012 nor the
Petroleum Code establishes limitations on foreign
― Department of Hydrocarbons (Direction Générale des investment. Local and foreign investments are treated
Hydrocarbures or ‘DGH’) acting under the supervision equally.
of the MMPE, which is the government authority
primarily responsible for the development and Foreign direct investments must be declared to the Ministry
regulation of the oil and gas industry in Ivory Coast; of Economy and Finances in order to allow dividends and
other income from the investment to be expatriated.
― Interdepartmental Petroleum Commission (‘CIP’) in
charge of the technical review of applications for Local content requirements are also expressly included in
petroleum authorisations and Petroleum Contracts; the Petroleum Code and must be reflected in Petroleum
Contracts. The relevant undertakings relate to:
41
― Giving preference to local companies for construction, ― Production authorisations: Production concessions
Ivory Coast
supply and services contracts, provided they offer under concession contracts (concession
equivalent conditions of quality, price, quantities and d’exploitation) and exclusive production authorisations
delay; under production sharing contracts (autorisation
exclusive d’exploitation) are granted for a maximum
― Hiring priority skilled local employees; and
period of 25 years with one renewal period of up to 10
― Establishing and financing a training programme for years as set out in the relevant contract.
local employees and for public officials employed by
The Petroleum Code refers to the following 3 types of
the petroleum administration.
Petroleum Contracts for upstream activities:
These local content obligations apply to both contractors
― Concession contract (contrat de concession
and sub-contractors.
attachés à l’octroi de titres miniers d’hydrocarbures
constitués par des permis de recherche et les
concessions d’exploitation) is entered into prior to the
Licensing
grant of an exploration permit and confers rights and
Identify the main fiscal/legal model granting rights obligations during exploration and, in case of a
to explore and produce oil and gas. discovery, during production. The concession contract
holder assumes financial and operating risks and may
Legal dispose of the production in accordance with the
Contractors require authorisation from the State to carry contract;
out oil and gas activities, the terms of which are included ― Production sharing contract (contrat de partage de
within a Petroleum Contract between the contractor and production) under which the State grants an exclusive
the State. Details of the relevant authorisations are as exploration right and, in case of a discovery, an
follows: exclusive right of production. The contractor assumes
― Non-exclusive prospecting authorisation: financial and operating risks. Production is shared with
(autorisation de reconnaissance d’hydrocarbures) the State in accordance with the contract; and
Entitles the holder to perform preliminary surface ― Service contract (Contrat de services à risques)
prospecting works on a non-exclusive basis. Results under which the contractor has no entitlement to any
must be disclosed to the MMPE. The prospecting portion of the production but is remunerated in cash
period is fixed at a maximum of 1 year with one for its services and reimbursed its petroleum costs.
renewal period of up to 1 year permitted. The
prospecting authorisation does not confer any Petroleum Contracts are all negotiated with the MMPE and
preferential right to a Petroleum Contract for the contain all dispositions applicable to the relevant
contractor. Transfer or disposal of the rights and exploration and/or production phase, including:
obligations arising from this authorisation is forbidden; ― Exploration area;
― Exploration authorisation: Exploration permits under ― Duration of the contract and the relevant
concession contracts (permis de recherche authorisations or permits including renewal periods
d’hydrocarbures) and exclusive exploration and relinquished areas;
authorisations under production sharing contracts
(autorisation exclusive d’exploration) are granted for a ― Work and investment commitments and relevant
maximum period of 3 years with two renewal periods securities;
as set out in the relevant concession or production ― Transportation rights;
sharing contract. In either case exploration
authorisations and permits may not exceed 7 years (or ― Production ownership and sharing;
9 years in deepwater zones). The relevant contract ― State participation;
(see below) provides for relinquishment obligations of
the authorisations at each renewal stage; ― Tax and customs regime;
― Exclusive appraisal authorisation: (autorisation ― Transfer and assignment;

exclusive d’évaluation) Granted to a contractor in the ― Environment, health and safety and rehabilitation of
event a discovery is made. The duration of the sites;
exclusive appraisal authorisation will be set out in the
production sharing contract; and ― Local preference and local training commitments;
42
― Abandonment obligations including abandonment after the last day of the production test. Bonuses are
Ivory Coast
deposit; and not recoverable;
― Stability, force majeure, applicable law and dispute ― Surface area royalty: an annual surface area royalty
resolution clause. as described in the Petroleum Contract is payable no
later than the 10th day of the year;
A model contract may be provided by the MMPE to serve
as a basis for negotiations. ― Proportional mining royalty: a monthly proportional
mining royalty is based on the total extracted
Petroleum Contracts must be signed by the President of
production as set out in the concession contract and is
Ivory Coast or its duly authorised representative and are
due to be paid in cash or in kind;
published in the Official Gazette.
― Profit oil and cost oil: profit oil and cost oil are
Transfer or disposal of the rights and obligations arising
negotiated in the Petroleum Contract. Additional cost
from Petroleum Contracts is subject to notification to and
oil may be negotiated for deepwater operations. Cost
prior approval of the MMPE.
oil is recoverable;
Fiscal
Contractors are subject to taxes and other contributions on profits at the rate of 25%;
under the General Tax Code, the Petroleum Code and the
― Withholding taxes: distribution of dividends is
relevant Petroleum Contract, including:
exempt from taxation;
― Fixed entry fees: fixed entry fees are due as follows
― VAT: goods and services related to petroleum
and become payable at the conclusion of each award
activities are exempted from VAT;
or transaction:
― Customs: WAEMU and ECOWAS applies customs
(a) Block award: CFAF 35,000,000;
rates specified in the community regulations. Imports
(b) Prospecting authorisation: CFAF 50,000,000; of materials exclusively related to petroleum activities
are exempt from customs duties. Subcontractors are
(c) For each exploration period: depending on the
also entitled to the special customs regime. Personal
period, ranging from CFAF 40,000,000 to
and domestic goods of non-resident workers of
75,000,000;
companies holding a Petroleum Contract are exempt
(d) Appraisal authorisation: CFAF 75,000,000; from customs duties. Exports of petroleum products
are not subject to export duties;
(e) Exclusive production authorisation: CFAF
500,000,000; ― Stamp duties: stamp duties apply to contractors
involved in the petroleum activities; and
(f) Block transfer value below CFAF 500,000,000:
CFAF 70,000,000; ― Abandonment deposit: holders of a production
authorisation are required to deposit abandonment
(g) Block transfer value between CFAF 500,000,001
costs as specified under the Petroleum Contract.
and CFAF 1,000,000,000: CFAF 100,000,000;
In addition to the above, a Petroleum Contract may offer
(h) Block transfer value between CFAF
specific tax incentives to the contractor.
1,000,000,001 and CFAF 1,500,000,000: CFAF
150,000,000; Contractors may have obligations to supply the domestic
market a defined portion of their production, the level of
(i) Block transfer value between CFAF
which will be defined in the Petroleum Contract.
1,500,000,001 and CFAF 2,000,000,000: CFAF
200,000,000; Please outline the procedure to apply to the
(j) Block transfer value higher than CFAF Government for an interest in a Licence in your
2,000,000,000: CFAF 250,000,000; and country. Please include details of cost and timing
(k) Block renunciation: CFAF 100,000,000.
Access to the petroleum sector in Ivory Coast is granted to
― Bonuses: the amount and number of bonuses are companies having the required technical and financial
generally negotiated within the Petroleum Contract. capabilities. Block awarding is decided by the Government
The Petroleum Code sets out a signature bonus, on a discretionary basis either by tender procedure or by
payable 30 days after the signing of the Petroleum direct negotiations with the MMPE.
Contract and a production bonus, payable 30 days
43
Complete applications are submitted to the CIP though the of the company holding a Petroleum Contract is subject to
Ivory Coast
CEPICI. An approved application entitles the applicant to notification to and prior approval by the MMPE.
enter into negotiations with the MMPE and be awarded
either a Petroleum Contract or a prospecting authorisation. Are there any pre-emptive rights reserved to any
In the case of production sharing contracts or Service assignment of an interest held under a Licence? If
contracts, successful negotiations lead to immediate so, what are the terms upon which such entities are
signature and entry into force unless otherwise agreed. As allowed to acquire the interest?
regard concession contracts, the exploration permit is
delivered 15 days after its signature by decree, such The Petroleum Code does not provide the State with a pre-
signature being the date of entry into force of the emptive right. A right of pre-emption in favour of the State
concession contract. may, however, be negotiated in the Petroleum Contract.

Licence? Economic support
See the Legal section above for details of durations for the Are parental guarantees or other economic
relevant Licences. supports commonly required to be provided by oil
and gas companies?
and be carried in the Licence? If so, please describe The Petroleum Code does not require a parent company
the extent of this entitlement. guarantee where one or several of the companies forming
the contractor entity are subsidiaries of an oil company.
Is there any mechanism for recovery of carry However such guarantee may be negotiated in the
costs? Petroleum Contract.
The State may, pursuant to the terms of the relevant Security interests to be provided will be governed by the
Petroleum Contract, participate directly or through State provisions of the OHADA Uniform Act organising
owned entities in petroleum operations. The Petroleum securities, applicable in Ivory Coast.
Code does not include any minimum rate regarding State
participation in the company applying for or holding a Are security deposits required in respect of work
Petroleum Contract. commitments or otherwise?
Any mechanism for the State’s costs to be carried and the During the exploration period, securities in respect of work
mechanism for recovering those costs will be set out in the commitments are required by the Petroleum Code to be
Petroleum Contract. included in the Petroleum Contract.
Does the Government have any right to participate The value of these securities and any requirement on
in the operatorship of the Licence? bodies to provide the assistance are to be set out in the
Petroleum Contract.
As above, the State may participate as operator directly or
through State owned entities in petroleum operations.
Abandonment and
Assignment Decommissioning
What Government and/or regulatory approvals are What abandonment regime is in place?
If any, what are the timing requirements and costs rehabilitation obligations to be included in the Petroleum
of obtaining such Government and/or regulatory Contract. In particular, the holder of a production
approvals? authorisation shall deposit abandonment costs as specified
Transfer or disposal of the rights and obligations arising under the Petroleum Contract.
from Petroleum Contracts and authorisations or permits is Facilities, equipment and lands required for production may
subject to notification to and prior approval of the MMPE. be transferred free of charge to the Government.
The Petroleum Code specifies that any change of control
44
In addition, the Petroleum Code provides for the obligation
Ivory Coast
to include environmental provisions, in particular
environmental management plans, in the Petroleum
Contract.
45
Kenya
Conducting oil and gas activities in Kenya
Laws and regulations (a) the creation of an upstream petroleum regulatory

authority and a local content development and
List the main legislation governing petroleum monitoring unit;
(b) additional new licences and permits for PSC
The main laws governing petroleum exploration and holders such as: (a) drilling permits; (b)
production activities in Kenya are as follows: production permits; (c) underground injection
control well permits; and (d) plugging and
― The Constitution of Kenya, 2010 (the ‘Constitution’);
abandonment permits. The new permits are to be
― Petroleum (Exploration and Production) Act, Chapter issued by the proposed upstream petroleum
308 of the Laws of Kenya (‘PEPA’); regulatory authority;
― Petroleum (Exploration and Production) Regulations, (c) a new requirement that the State’s entitlement to
1984 (the ‘PEPA Regulations’); any profits realised from the exploration and
production of petroleum resources is to be shared
― Petroleum (Exploration and Production) (Training
out between the Government of Kenya (the
Fund) Regulations, 2006 (the ‘Training Fund
‘Government’), the county governments and the
Regulations’); and
local community;
― The Ninth Schedule to the Income Tax Act (Chapter
(d) a local equity participation requirement, of at least
470, Laws of Kenya) (the ‘Ninth Schedule’).
5% by an indigenous Kenyan company other than
There are numerous other laws which have an impact on NOCK (as defined below), for a person to be
the oil and gas sector, including: qualified to enter into a PSC; and
― The Land Act, 2012; (e) new provisions relating to capital gains tax on
assignment, environmental provisions, insurance
― The Occupational Safety and Health Act, 2007;
requirements and provisions relating to upstream
― The Competition Act, 2010; petroleum operations facilities.
― The National Construction Authority Act, 2011; and ― The Natural Resources (Benefit Sharing) Bill, 2014
(currently in its second reading in Parliament) which is
― The Environmental Management and Coordination
intended to provide a legislative framework for the
Act, 1999 (‘EMCA’).
establishment and enforcement of a system of benefit
There are also proposed laws which will affect the oil and sharing in resource exploitation between resource
gas sector if passed into law including: exploiters, the Government, county governments and
local communities; and
― The Petroleum (Exploration, Development and
Production) Bill, 2015 (the ‘Petroleum Bill’), currently ― The Community Land Bill, 2015, which is intended to
in its second reading in Parliament. Once passed, the provide for the recognition, protection, management
Petroleum Bill will repeal PEPA and be the new and administration of community land as defined in
substantive law relating to upstream oil and gas. The the Constitution. The Community Land Bill, 2015 also
Petroleum Bill was concurrently published with draft contains provisions relating to the sharing of benefits
local content regulations and a new model form arising from investments on community land. This Bill
production sharing contract (‘PSC’). Some of the is currently in its second reading in Parliament.
significant changes proposed under the Petroleum Bill
and the new model form PSC include:
46
Identify the Government, regulatory and/or Construction Authority Act, 2011 which would apply to
oversight bodies principally responsible for upstream contractors.
Kenya
― The Ministry of Energy (the ‘Ministry’) and the
Licensing
Cabinet Secretary for Energy (the ‘Cabinet
Secretary’) represents the Government in matters Identify the main fiscal/legal model granting rights
relating to petroleum; to explore and produce oil and gas.
― The National Oil Corporation of Kenya (the ‘NOCK’) a Legal
state corporation involved in upstream oil and gas
exploration; The Constitution and PEPA state that title to all petroleum
existing in its natural condition in strata lying within Kenya
― The National Land Commission (the ‘NLC’) and its continental shelf shall vest in the Government. The
established by the Constitution. The NLC, among Government may conduct petroleum operations either
other things, is tasked with the management of public through NOCK or through licensed private contractors.
land on behalf of the Government; and
The Cabinet Secretary has the power to divide Kenya and
― The National Environmental Management Authority its continental shelf into numbered blocks and may reserve
established under EMCA, coordinates environmental blocks to be exploited by the Government and enter into
management activities and the integration of PSCs with contractors in relation to a specific block.
environmental considerations in development plans.
The Cabinet Secretary may also issue non-exclusive
exploration permits for a specified area for the purpose of
Entry requirements obtaining geological information.
New article 71(1) of the Constitution provides that the

ratification of Parliament is required if an agreement
involves the grant of a right or concession for the
exploitation of any of Kenya’s natural resources. PSCs
issued after 27 August 2010 would therefore require
parliamentary ratification although the enabling legislation
The Government may conduct petroleum operations either for this requirement has not yet been enacted.
through NOCK or through private contractors that are
Fiscal
licensed by the Government under a PSC. The model form
PSC under the PEPA Regulations forms the basis for Under the model form PSC, contractors can recover all
negotiations between the Government and contractors for expenditure incurred in carrying out petroleum operations
petroleum agreements. through disposing of crude oil from the contract area.
Petroleum costs incurred in the contract area are
Only a company incorporated or registered in Kenya may
recovered either in the year in which the costs are incurred
enter into a PSC with the Government.
or the year in which commercial production occurs,
PEPA also states that the Government shall only enter into whichever is later. Capital expenditure in respect of each
petroleum agreements with contractors who have the development area is recoverable at a rate of 20% per
financial ability, technical competence and professional annum based on amortisation starting either in the year in
skill necessary to fulfil the obligations under the agreement. which the capital expenditure was incurred or the year in
which commercial production commenced. Where the
Are there any foreign investment approval recoverable petroleum costs exceed the value of all cost oil
requirements or restrictions when commencing for that year, the excess is carried forward to the
business in your country (e.g. a minimum local succeeding contractual years until the cost is fully
shareholding in the entity undertaking the activity)? recovered. Where the maximum value of cost oil exceeds
There are no foreign investment restrictions specifically the petroleum costs, the excess will be accounted for as
applicable to the upstream oil and gas sector. However, profit oil which is shared between the contractor and the
there are local content and local distribution requirements Government in the ratios set out in the relevant PSC.
under the model form PSC and local participation Taxes
requirements under the National Construction Authority
Regulations 2014 promulgated under the National The Finance Act, 2014 which became effective on 1
January 2015, introduced a new taxation regime for the
47
extractive industry. The Ninth Schedule now governs the value from immovable assets in Kenya, is taxable. Where
taxation of both petroleum and mining in Kenya. The the interest derives between 20% and 50% of its value
income tax payable on taxable profits by a resident directly or indirectly from immovable assets, the net gain is
Kenya
contractor is 30% and 37.5% for a non-resident contractor. taxable on a prescribed formula. Further, where the
The Ninth Schedule also provides for allowable deductions interest derives more than 50% of its value from
including expenditure relating to exploration, development immovable assets in Kenya, the whole gain is subject to
and decommissioning. It is important to note that the thin tax.
capitalisation threshold for petroleum companies is a debt-
Such a net gain made anywhere in the world on the direct
to-equity ratio of 2:1, which would restrict the deductibility
or indirect disposal of an interest in a contractor is deemed
of interest against business income to the extent of the thin
to be income derived or accrued from Kenya and is subject
capitalisation.
to tax in Kenya.
Tax losses incurred by a contractor can be carried forward
Other fees payable to the Government include:
indefinitely or until operations cease, while losses from
petroleum operations can be carried back as a deduction ― Surface fees: The PEPA Regulations provide that the
against income for a period of 3 years. contractor shall pay an annual surface fee calculated
on the basis of the surface area of the contract area
Further, sub-contractors without a ‘permanent
and the exploration period;
establishment’ in Kenya are subject to withholding tax of
5.625% of the gross service fee; while those with a ― Signature bonus: This is a one-time payment on the
‘permanent establishment’ are taxed on business profits at awarding of a PSC and is payable irrespective of
a rate of 37.5%. success. Its payment may be spread over the life of
the contract; and
The Ninth Schedule also provides that hedging
transactions entered into by a contractor to manage ― Training Levy: PEPA creates a training fund for the
commodity price risk are treated as a specified source of purpose of training Kenyan nationals in petroleum
income, unless the transaction has an annual turnover of operations. The amount payable by each contractor is
less than KES 10 million and is approved by the Kenya specified in the PSC.
Revenue Authority’s Commissioner for Domestic Taxes, in
which case hedging losses or profits can be set off against Please outline the procedure to apply to the
ordinary business income from oil production. Also, Government for an interest in a Licence in your
expenditure incurred by a contractor in a contract area can country. Please include details of cost and timing
only be offset against income from that contract area for obtaining such interest.
during that year. Currently PEPA allows the Cabinet Secretary to administer
Pursuant to the provisions of the model form PSC, profit oil the application and the grant of PSCs. The Government
is shared between the Government (‘Government Profit intends to introduce a competitive bidding system for new
Oil’) and the contractor on such ratios as are set out in the exploration blocks with the highest bidder being awarded
relevant PSC. The Ninth Schedule provides, in accordance the block although this has not yet been introduced.
with the standard provisions of PSCs, that all income tax
that a contractor is liable to pay to the Government will be
Licence?
deemed to have been paid as a portion of the Government
Profit Oil. However, any taxes due in respect of a gain The length of the exploration period under a PSC is not
made on the disposal of an interest in the PSC or any tax prescribed but is commonly divided into an initial
that the contractor is liable to deduct from a payment made exploration period of 3 years and two additional exploration
by the contractor will not be deemed to have been paid as periods of 2 years each. The Licence may be extended for
a portion of Government Profit Oil. The net gain from a an additional term on application by the contractor and with
farm-out transaction is aggregated into the transferor’s demonstration of sufficient proof of need for an extension.
taxable income and taxed at the relevant corporation tax
In the event of a commercial discovery, most PSCs
rate. The net gain is the consideration from disposal
continue for a period of 25 years in respect of the area in
reduced by the cost, to the disposer, of the interest. The
which the discovery is made from the date when a
consideration is taken to be the total amount received or
development plan for the area is approved.
receivable for the disposal, including the fair market value
of any amount in kind determined at the time of disposal.
The net gain from the disposal of an interest in a

contractor, where the interest derives 20% or more of its
48
Assignment
the extent of this entitlement. What Government and/or regulatory approvals are
Kenya
Section 28 of the model form PSC provides that the required for the acquisition of oil and gas interests
Government may elect to participate in the petroleum held under a Licence (whether by asset or
operations in any development area and acquire an corporate sale/change of control)?
interest in that development area. The Government may
participate either directly or through an appointee. The
model form PSC provides for a standard participation
approvals?
agreement to be signed between the contractor and the
Government upon exercise of this right by the Government. Assignment and changes of control under the PSC
On the exercise of its participation rights, the Government The relevant provisions of the model form PSC provide
is required to assume its share of costs, expenses and that:
obligations incurred in respect of that development area
― Where a contractor assigns part or all of their rights to
from the effective date of its participation pro-rata to its
an ‘Affiliate’, defined as ‘a person directly or indirectly
participating interest.
controlling or controlled by or under direct or indirect
In relation to historical costs, the model form PSC requires common control with another person’, there is no
the Government to reimburse the contractor, without requirement to notify the Cabinet Secretary;
interest, pro-rata to its participating interest, its share of all
― Where a contractor assigns to a person other than an
costs, expenses and expenditure incurred in respect of the
Affiliate part or all of their rights and obligations under
development area from the date the development plan for
the PSC the consent of the Cabinet Secretary must be
that development area was adopted up until the date the
sought (such consent not to be unreasonably
Government exercises its right to participate in that
withheld) and shall be granted or refused within 30
development area.
days; and
Is there any mechanism for recovery of carry ― Where a contractor experiences a change of control in
costs? its corporate structure there is an obligation to report
The reimbursement of the historic costs described above the change of Control to the Cabinet Secretary.
must be made within 3 months of the exercise, by the ‘Control’ is defined as ‘the ownership of at least 50%
Government, of its right to participate. of the voting rights of a person’. Where one
constituent member of a contractor experiences a
Does the Government have any right to participate change of Control, in addition to the need to notify the
in the operatorship of the Licence? Cabinet Secretary, the model form PSC states that,
‘where control over one of the entities constituting the
Upon the Government’s exercise of its right to participate in
contractor is changed, the continuation of the contract
a development area, the Government becomes a partner in
shall be subject to the consent of the Minister, which
the operation of the development area through an
shall not be unreasonably withheld’.
operating committee established under any joint operating
agreement. The original operator of the block would Competition approvals
regularly continue as the lead operator and the other
Under the guidelines for the Exclusion of Proposed
entities constituting the contractor, together with the
Mergers from Provisions of Part IV of The Competition Act,
Government, establish a committee to supervise and
2010, mergers relating to carbon based mineral exploration
control petroleum operations on the block. The operating
and prospecting are excluded from notification provided
committee consists of one representative from each party
that the value of assets to be held as a result of the merger
involved and its decision making processes will be covered
is below KES 4 billion.
in the joint operating agreement.
The Common Market for Eastern and Southern Africa
(‘COMESA’) has also implemented its own competition
regime. Under these amended Rules on the Determination
of Merger Notification Thresholds, a merger is notifiable
where:
49
― Both the acquiring firm and the target firm, or either Are security deposits required in respect of work
the acquiring or the target firm, operate in two or more commitments or otherwise?
COMESA Member States; and
Kenya
In addition to the security requirements detailed above,

― Either their combined annual turnover or combined PEPA requires that where a contractor intends to enter
assets in the common market is at least USD 50 upon any private land for the purposes of conducting
million and where each of at least 2 parties have an petroleum operations, it shall, if required by the owner or
annual turnover or asset value in the Common Market occupier of the land, give security in such sum and by way
of at least USD 10 million. of means as the Cabinet Secretary may direct.

Government entities in the event of a proposed Abandonment and
so, what are the terms upon which such entities are Decommissioning
Government in the event of a proposed assignment of an Are security deposits required in respect of future
interest held under a Licence. decommissioning liabilities?
Abandonment of wells is addressed under the PEPA

Regulations which provide that a contractor shall not,
Economic support except where there is danger or the risk of significant
economic loss, abandon a well without giving 48 hours
prior notification to the Cabinet Secretary, and an
abandoned well shall be securely plugged to prevent
and gas companies?
pollution, sub-sea damage, or water entering or escaping
On or before the commencement of any exploration period from the strata penetrated.
the contractor is required to provide security, in a form
Currently, there are no security deposits required for future
acceptable to the Cabinet Secretary, guaranteeing the
decommissioning liabilities but these have been proposed
contractor’s minimum work and expenditure obligations.
in the Petroleum (Exploration, Development & Production)
Most PSCs contain provisions requiring a contractor to
Bill 2015.
obtain a bank guarantee for 50% of the proposed
expenditure and a parental guarantee of 50%.
50
Libya
Conducting oil and gas activities in Libya

In relation to the petroleum sector, Law No.25 of 1955 (the sharing contract/licence/concession (Licence) in
‘Petroleum Law’) is still in effect. However, in 1961, 1965 your country? For instance, is it necessary to
and 1970 the law and the concessions were amended incorporate a subsidiary, or register a branch?
significantly with the terms and conditions changing to be The Petroleum Law established a concessionary
heavily in favour of the Government. framework for the exploration and production of petroleum
within Libya. In Article 1 it laid down the basic rule that all
petroleum in Libya in its natural state, contained in strata,
is the property of the Libyan State and that no person shall
explore or prospect for, mine or produce petroleum unless
The National Oil Corporation (‘NOC’), recognised by authorised by a permit or concession issued under the law.
Decree No. 10 of 1979, is the State corporation regulating
The Minister of Petroleum shall consider applications for
the oil sector and is the State representative in oil
permits or concessions submitted by eligible applicants. At
exploration contracts, regulating the affairs of completely
present, the usual way for a foreign oil company to
owned companies, Joint Ventures (‘JVs’) and Exploration
undertake oil operations in Libya, unless it takes over an
and Production Sharing Agreements (‘EPSA’).
existing concession interest, is to enter into an EPSA or a
NOC is responsible for many aspects of the upstream and Development and Production Sharing Agreement
downstream oil and gas sector in Libya, including licensing (‘DEPSA’) with NOC.
procedures and implementation, oil policy and contract
The Government usually authorises NOC to announce a
negotiations.
need for EPSA candidates, usually announced in the
NOC carries out the objectives of Libya’s development plan international media, and this is done in the form of open
by increasing, developing and exploiting oil and gas bidding. The bids are made by the foreign parent company
reserves, and operating and investing in those reserves. and then the company that is successful in the bid must
Furthermore, NOC has de facto taken over the technical open a branch office in Libya.
and regulatory functions that were previously held by the
Minister of Petroleum. Are there any foreign investment approval
The new government intends to divide the NOC into two business in your country (e.g. a minimum local
bodies, as follows: shareholding in the entity undertaking the activity)?
― NOC – Exploration and Production of Oil and Gas. There are certain prerequisites outlined in the Petroleum
― NOC – Refinery and Petrochemicals. Law under Article 5 which stipulate as follows:
The Minister of Petroleum shall consider applications for

permits or concessions submitted by eligible applicants
only, and in determining the eligibility of any applicants the
Minister of Petroleum shall have regard to:
― the furtherance of the public interest;
― the applicant’s compliance with relevant laws and

regulations;
51
― the applicant’s previous activities in the petroleum Does the Government have any right to participate
industry; and be carried in the Licence? If so, please describe
― the applicant’s previous experience in the conduct of
Libya
similar operations; and Is there any mechanism for recovery of carry

― the applicant’s financial and technical capacity to costs?
conduct the contemplated operations. The Government has the right to participate and be carried
In determining the eligibility of an applicant who is a in the Licence. The foreign company undertakes all
subsidiary of a company or a member of a group of exploration and appraisal expenditures at its own risk.
companies, due consideration shall be given to the Development expenditure and exploitation capital
qualifications held by the parent company or group of expenditure are usually shared 50/50 between NOC and
companies of which he is a member and the extent of the the foreign company. The foreign company is guaranteed
availability to the applicant of such qualifications. an initial share of production with a view to enabling it to
recover the expenditure it has incurred during the
exploration, development and production phases.
Licensing EPSA IV allows for NOC to receive a share of production
with the remainder being available for cost recovery by the
company. Under EPSA IV provisions cost recovery ranges
from 30% to 40% depending on the field size. Once full
No income tax is levied on the foreign company’s share of cost recovery has taken place, net production (profit oil) is
production. The foreign company is subject to custom shared between the NOC and the company.
duties in accordance with the Petroleum Law and is
exempt from duties on the import of plant, tools, Does the Government have any right to participate
machinery, equipment and materials used for petroleum in the operatorship of the Licence?
operations. An operator acts under the supervision and control of an
All material, equipment, machinery and supplies purchased Owner’s Management Committee composed of three
by the foreign entity for use in petroleum operations under members, two (including the chairman) appointed by NOC,
an EPSA becomes the property of NOC either immediately and one by the operator. This Committee decides upon the
after purchase if purchased in Libya or at the time it is major issues relevant to petroleum operations (approval of
landed at a Libyan port if purchased outside Libya. budgets and work programme, the contractors’ list, and
contracts above a certain value, etc).
Following the declaration of a commercial discovery, the
operator is managed by an Operator’s Management
country.
Committee that acts as the board of management, under
Please include details of cost and timing for the supervision of the Owner’s Management Committee.
obtaining such interest. This Committee also has three members, two (including
the chairman) appointed by NOC and one by the operator.
Individuals are not authorised to acquire an interest. Only Decisions are taken by simple majority vote.
foreign companies can acquire oil interests and this is
subject to negotiation and sometimes open bidding.

Assignment
Licence? What Government and/or regulatory approvals are
Concessions are granted for the period of time requested required for the acquisition of oil and gas interests
by the applicant provided that such period shall not exceed held under a Licence (whether by asset or
50 years. A concession may be renewed for any period so corporate sale/change of control)?
that the total of the two periods does not exceed 60 years.
The model EPSA provides for a contractual period of 25 of obtaining such Government and/or regulatory
years. A certain number of years is agreed upon as the approvals?
exploration period and at the end of the exploration period
Article 17 states that permits and concessions shall not be
the EPSA terminates in respect of all parts of the contract
assigned except with the written consent of the Minister of
area other than the exploitation areas.
52
Petroleum, which may impose any conditions that it deems bond or banker’s guarantee shall be maintained as a
appropriate in the public interest. constant figure throughout the life of the concession, and
such bond or banker’s guarantee shall be accepted by the
The notice of the grant, renewal, assignment, revocation,
Libya
Director of Customs in lieu of any bond he may require
termination or surrender of the whole or any part of any
under the Customs Law.
permit or concession must be published in the Official
Gazette, as per Article 19.
Are there any pre-emptive rights reserved to any Abandonment and

Government entities in the event of a proposed Decommissioning
so, what are the terms upon which such entities are What abandonment regime is in place?
The recommendation in favour of an assignment would decommissioning liabilities?
usually come from the NOC and the Prime Minster.
Article 3 of the Petroleum Regulation details
decommissioning and abandonment requirements. The
Economic support concession holder should notify the NOC of its intended
abandonment 3 months prior to the abandonment date.
Expenses for abandonment related to exploration and
appraisal operations is the sole responsibility of the
and gas companies?
company. The company shall be liable for 50% of
A parent company guarantee is required to cover the expenses incurred as a result of development and
operator’s payment and other obligations under the EPSA. exploitation operations.
This guarantee may be a corporate guarantee or a bank
Article 26 provides that once the A factor contained in
guarantee.
Article 12.1.2(b)(ii) exceeds 1 the operator shall submit an
The latest EPSA agreement introduced two bonus abandonment plan, which, if approved, shall provide for
payments, a signature bonus and a predetermined monthly cash calls to be made to the company for its
production bonus. Neither bonus can be treated as a share. NOC shall be cash called for its share once
recoverable cost. production terminates or a field is abandoned before the
end of the term of the EPSA.
commitments or otherwise? If at the end of the EPSA, NOC continues petroleum
operations, the company shall be discharged from future
An applicant may be required before the grant of a costs of abandonment. However, the company shall
concession to deliver to the Minister of Petroleum a indemnify and hold NOC harmless against any claim
guarantee by way of a bond or banker’s guarantee in a arising from previous joint petroleum operations to the
sufficient sum not exceeding fifty thousand Libyan Dinars extent of its share under the EPSA for a period of 15 years
LD 50,000) to secure the due performance of its from the date of such operations.
obligations under all concessions held by it in Libya. Such
53
Malawi
Conducting oil and gas activities in Malawi
― being a petroleum exploration licence, shall be

Laws and regulations granted to a body corporate unless the body corporate
List the main legislation governing petroleum is:
exploration and production activity in Malawi. (a) incorporated or established in Malawi; or
The Petroleum (Exploration and Production) Act (Cap (b) approved by the Minister of the Malawi
61:02) (the ‘E&P Act’) and the Liquid Fuels and Gas Government responsible for petroleum if it is not
(Production and Supply) Act (Cap 50:03) (the ‘Production incorporated in Malawi; or
and Supply Act’) govern oil and gas exploration and
production in Malawi. ― being a petroleum production licence, shall be granted
to a body corporate unless the body corporate is
The E&P Act mainly deals with exploration and production incorporated or established in Malawi.
of petroleum within Malawi whereas the Production and
Supply Act mostly deals with extraction, conversion, Are there any foreign investment approval
importation, blending, transportation, storage, distribution, requirements or restrictions when commencing
wholesale and retail sale of liquid fuels and gas within business in Malawi (e.g. a minimum local
Malawi. shareholding in the entity undertaking the activity)?
Identify the Government, regulatory and/or Under the Exchange Control Regulations of Malawi every
oversight bodies principally responsible for foreign investor needs to register a foreign investment with
regulating oil and gas activities. the Exchange Control authorities before the investment is
made to enable externalisation of dividends and
The Ministry of Energy and Mining is the Government repatriation of capital. Apart from the exchange approval
Authority responsible for the regulation of prospecting, control requirement, there are no foreign investment
exploration, discovery and development of oil and gas in approval requirements or restrictions and there is no
Malawi. minimum local shareholding requirement in the entity
The Malawi Energy Regulatory Authority (‘MERA’) is undertaking the activity.
responsible for the regulation of production, extraction,
conversion, importation, blending, transportation, storage,
distribution, wholesale and retail of liquid fuels and gas.
Licensing
Entry requirements
Legal
becoming a licensee of an oil and gas production The E&P Act vests the entire property in and control over
sharing contract/licence/concession (Licence) in petroleum in Malawi in the President on behalf of the
Malawi? For instance, is it necessary to incorporate people of Malawi, but without prejudice to the exercise of
a subsidiary, or register a branch? any right under or pursuant to the E&P Act.
No Licence: Fiscal
― shall be granted to an individual unless he is a citizen Revenue which the Government can obtain from oil and
of Malawi or has been a resident in Malawi for a gas exploration and production industry includes:
period of four years immediately preceding the date of ― fees on application for grant and renewal of the
the application for a Licence; petroleum exploration licence and petroleum
production licence;
54
― annual charges for the petroleum exploration licence Does the Government have any right to participate
and petroleum production licence; and be carried in the Licence? If so, please describe
Malawi
― royalty on petroleum recovered at the rate provided for
in the Licence; Is there any mechanism for recovery of carry
― income tax; and costs?
― rent resources tax. The Government does not have any right to participate and
be carried in the Licence.
Taxes and rates of taxes applicable change from time to
time. It is advisable to consult an accountant in Malawi on Does the Government have any right to participate
taxes applicable at any point in time. in the operatorship of the Licence?
Please outline the procedure to apply to the The Government does not have any right to participate in
Government for an interest in a Licence in Malawi. operatorship of the Licence.
Please include details of cost and timing for
obtaining such interest.
Assignment
Applications for grant or renewal of a petroleum exploration
licence or petroleum production licence are made to the What Government and/or regulatory approvals are
Minister responsible for energy and mining under the E&P required for the acquisition of oil and gas interests
Act. There are no prescribed forms for the applications. held under a Licence (whether by asset or
The fees payable for the Licences are as follows: corporate sale/change of control)?
― application for grant of petroleum exploration licence: If any, what are the timing requirements and costs
K250,000.00 (~US$355.00) of obtaining such Government and/or regulatory
― application for grant of petroleum production licence: approvals?
K500,000.00 (~US$710.00) A transfer of a petroleum exploration or production licence
― application for renewal of petroleum exploration or an instrument by which a legal or equitable interest in, or
licence: K500,000.00 (~US$710.00) affecting, a Licence is created, assigned or dealt with,
whether directly or indirectly, requires written approval of
There is no prescribed timeframe within which a Minister the Minister without which it will be of no force.
should deal with an application for a Licence or renewal of
a Licence under the E&P Act. There is no prescribed timeframe within which the Minister
should give his approval. Fees on assignment of a
Under the Production and Supply Act, an application for petroleum exploration licence are K150,000.00
production of crude oil and gas, ethanol fuel or bio-diesel is (~US$213.00) and for a petroleum production licence are
to be made to MERA in the prescribed form. Fees payable K510,500.00 (~US$1,726.60).
on an application for a Licence or renewal thereof under
the Act are 5 tambala (US$0.00007) per litre to be Are there any pre-emptive rights reserved to any
produced. There is no prescribed timeframe for MERA to Government entities in the event of a proposed
consider and issue or renew a Licence. assignment of an interest held under a Licence? If
What is the customary duration of the relevant allowed to acquire the interest?
Licence?
There are no pre-emptive rights reserved to any
An exploration licence is valid for a term as stipulated in Government entities.
the Licence, which shall not exceed 4 years. The term
may, if the Minister considers proper, be preceded by a
preparation period not exceeding 1 year. The Licence may Economic support
be renewed a further term not exceeding 3 years, and may,
where it is affected by force majeure, be extended. Are parental guarantees or other economic
Under the E&P Act, a petroleum production licence shall
and gas companies?
continue in force for a term of 25 years, which may be
preceded by a preparation period as determined by the No
Minister. The Licence may also be renewed for such term
as the Minister may deem fit.
55
Are security deposits required in respect of work a licensee should conduct its operations in a matter which
commitments or otherwise? protects and/or preserves the environment. There are no
prescribed security deposits required in respect of future
Malawi
No
decommissioning liabilities.
Abandonment and
Decommissioning

There are no specific statutory provisions in respect of an

abandonment regime. The E&P Act, however, requires that
56
Mauritania
Conducting oil and gas activities in Mauritania

The main legislation governing petroleum activities is Law There is no limitation on foreign investment in the
no. 2010-033 dated 20 July 2010, as amended by Law no. Petroleum Code. Local and foreign investments are treated
2011-044 dated 25 November 2014 and Law no. 2015-016 equally.
dated 29 July 2015 (the ‘Petroleum Code’).
Due to the general nature of the Petroleum Code, most of the Petroleum Code. The relevant undertakings relate to:
― Giving preference to local companies for construction
and production are included in production sharing contracts
contracts or services contracts provided they offer
(contrats de partage de production or ‘PSCs’).
equivalent conditions of quality, quantity and price;
Identify the Government, regulatory and/or ― Hiring, in priority, local employees with equivalent
oversight bodies principally responsible for qualifications; and
― Funding and establishing training programmes for
The main institutions of the Mauritanian hydrocarbons local employees.
sector include:
― Ministry of Petroleum, Energy and Mines (Ministère du

Pétrole, de l’Energie et des Mines or ‘MPEM’);
Licensing
― SMHPM, (Société Mauritanienne des Hydrocarbures Identify the main fiscal/legal model granting rights
et de Patrimoine Minier) the National Hydrocarbons to explore and produce oil and gas.
Company (‘NHC’), established in May 2009; and
Legal
― National Fund for Hydrocarbon Reserves (Fonds
Contractors are granted rights to explore, develop and
national des revenues des hydrocarbures), which acts
produce oil and gas by obtaining authorisations from the
as a sovereign fund dedicated to allocating oil and gas
State, and by entering into a PSC with the MPEM which
revenue to the State’s budget.
defines the terms of such authorisations. Details of the
relevant authorisations are as follows:
Entry requirements ― Prospecting authorisation (autorisation de

reconnaissance). The holder of a prospecting
What are the registration requirements for authorisation is entitled to perform preliminary surface
becoming a licensee of an oil and gas production prospecting works on a non-exclusive basis. This
sharing contract/licence/concession (‘Licence’) in authorisation is granted for a 12 month period and is
your country? For instance, is it necessary to renewable once for a further 12 month period. It does
incorporate a subsidiary, or register a branch? not confer any preferential right to its holder to enter
According to the Petroleum Code, any contractor carrying into a PSC. Prospecting results are disclosed to the
out petroleum activities in Mauritania is required to enter MPEM. The transfer of the rights and obligations
into a PSC. Foreign contractors must incorporate a local arising from such authorisation is forbidden.
company or a branch to carry out exploration and ― Exploration authorisation (autorisation
production activities in Mauritania. d’exploration). An exploration authorisation is granted
on an exclusive basis for an initial 10 year period
57
consisting of three phases. The PSC provides for ― Support contributions: various support contributions
Mauritania
relinquishment of 25% of the area covered by the are provided for and are to be specified in the PSC.
authorisation at the end of the first and second
In addition to the above fiscal regime, Mauritania has a
phases. An additional 12 month period may be
prescribed system for revenue sharing in relation to
granted for completion of drilling or appraisal works.
Commercial discovery entitles the holder to be
granted a production right, subject to the approval of a ― Cost oil is limited to 60% for oil (65% for dry gas) of
development plan. total production.
― Production authorisation (autorisation ― Profit oil revenue sharing as well as its calculation
d’exploitation). A production authorisation is granted method is as set out in the PSC.
for a maximum period of 25 years (30 years for gas)
Furthermore, contractors have the obligation to supply the
with one renewal period of up to 10 years. An
domestic market with a defined part of their production
additional retention period may be granted for: (i) a 3
pursuant to the terms of the PSC.
year period for oil and wet gas; and (ii) a 5 year period
for dry gas. Please outline the procedure to apply to the
Exploration and production activities may only be Government for an interest in a Licence in your
conducted through a PSC under which the State grants an country. Please include details of cost and timing
exclusive exploration right and, in case of a discovery, an for obtaining such interest.
exclusive production right. The contractor assumes Access to Mauritanian petroleum sector is granted to
financial and operating risks. Production is shared with the companies having the required technical and financial
State in accordance with the PSC. capabilities, by means of a tender procedure initiated by
A model PSC is provided by the Government to serve as a the MPEM and, occasionally, by direct negotiations.
basis for negotiations.
PSCs must be signed by the MPEM after deliberation of Licence?
the Council of Ministers and are published in the Official
See the ‘Legal’ section above for information on the
Gazette. In addition, Mauritania implements the principles
duration of relevant authorisations.
of the Extractive Industries Transparency Initiative.
Fiscal Does the Government have any right to participate

Contractors are subject to taxes and other contributions the extent of this entitlement.
under the Petroleum Code, the General Tax Code and the
PSC. Is there any mechanism for recovery of carry
costs?
― Bonuses: a signature bonus is due upon signing of
the PSC, which also provides for a production bonus. The State may participate in petroleum operations either
directly or through the NHC. During exploration a 10%
― Surface area royalty: an annual surface area royalty
interest in each PSC shall automatically be allocated to the
is due as set out in the PSC.
State. All costs and risks associated with that interest are
― Corporate income tax: the applicable rate is incurred by the contractor. The PSC must confer the option
specified in the PSC and is at least equal to the for the State to acquire at least a 10% additional
general tax rate of 25%. participation during production (costs associated with that
interest are to be borne by the State).
― VAT: exports of hydrocarbons, imports and purchase
of goods related to petroleum operations are Does the Government have any right to participate
exempted from VAT. in the operatorship of the Licence?
― Customs: imports of approved goods exclusively The State may participate as operator either directly or
related to petroleum operations are exempted from through the NHC in petroleum operations.
customs duties.
― Abandonment deposit: contractors are required to

deposit abandonment costs in a ring-fenced bank
account as specified under the PSC.
58
Mauritania
Assignment
be a negotiated term in the PSC.
corporate sale/change of control)? Securities in respect of work commitments are expressly
provided for in the Petroleum Code. Other types of
If any, what are the timing requirements and costs securities may also be a required term in the PSC.
approvals?
Transfer of the rights and obligations arising from PSCs Abandonment and
and authorisations is subject to the notification to and prior Decommissioning
approval of the MPEM.
Government entities in the event of a proposed Are security deposits required in respect of future
assignment of an interest held under a Licence? If decommissioning liabilities?
rehabilitation obligations to be included in the PSC. In
The Petroleum Code does not grant the State a pre- particular, contractors are required to deposit
emptive right in relation to assignment of petroleum rights. abandonment costs in a ring fenced bank account as
However, such right may be negotiated in the PSC. specified under the PSC.
Facilities and equipment from which the contractor has

recovered its costs may be transferred free of charge to the
Economic support
State.
Are parental guarantees or other economic In addition, pursuant to the Petroleum Code, the PSC must
supports commonly required to be provided by oil provide for the obligation to include environmental
and gas companies? provisions, in particular environmental impact studies and
The Petroleum Code does not require a parent company management plans, in the PSC.
guarantee where companies forming the contracting entity
59
Morocco
Conducting oil and gas activities in Morocco
Pursuant to article 71 of the Hydrocarbon Code, the

Laws and regulations Moroccan State has delegated to the ONHYM, in
List the main legislation governing petroleum particular, the following activities:
exploration and production activity in your country. ― Conclusion of petroleum agreements with oil
― Law No. 21-90 relating to the exploration and companies;
exploitation of hydrocarbons deposits, enacted by ― Holding of participation interests in exploration permits
Dahir No. 1-91-118 dated 1 April 1992, as amended or exploitation concessions reserved for the Moroccan
by law no. 27-99 enacted by Dahir No. 1-99-340 dated State; and
15 February 2000 (Law No. 21-90 (the ‘Hydrocarbon
Code’); and ― Exercising of pre-emptive rights on behalf of the
Moroccan State.
― Decree No. 2-93-786 dated 3 November 1993
implementing the Hydrocarbon Code, as amended by
Decree No. 2-99-210 dated 16 March 2000. Entry requirements
In addition to the Hydrocarbon Code, the laws and
regulations applicable to downstream oil and gas activities
are:
― Law No. 1-72-255 relating to the import, export, your country? For instance, is it necessary to
refining, collection, storage and distribution of incorporate a subsidiary, or register a branch?
hydrocarbons, enacted by the Dahir dated 22
Pursuant to the Hydrocarbon Code, any legal entity may
February 1973, as amended by Law No. 4-95 enacted
conduct exploration and production activities in Morocco;
by Dahir No. 1-95-141 dated 4 August 1995 (‘Law No.
there is no distinction made between Moroccan and foreign
1-72-255’); and
entities. Any operator applying for an exploration permit
― Decree No. 2-72-513 dated 7 April 1974 implementing must give evidence of its technical and financial capacity to
Law No. 1-72-255. complete the exploration works and undertake to fulfil a
minimum program of works accompanied by a financial
Identify the Government, regulatory and/or undertaking.
regulating oil and gas activities. There is no specific requirement under the Hydrocarbon
Code to register a branch or a company in Morocco in
The Moroccan Ministry of Energy and Mines (the ‘MMEM’) order to carry out oil and gas activities. However,
and the Moroccan Minister of Finance (the ‘MMF’) are the depending on the possible local partners or investors in the
public authorities in charge of the Moroccan hydrocarbon operator, co-venturers may need to register their future
activities. In addition to these government authorities, the registered office location with the trade register.
Office National des Hydrocarbures et des Mines
(‘ONHYM’) was created by Law No. 33-01 enacted by We are not aware of any particular requirements regarding
Dahir No. 1-03-203 dated 11 November 2003. This public the legal form of an oil company. Several types of entities
office conducts reconnaissance, exploration and are available under Moroccan company legislation
exploitation of hydrocarbon deposits, as well as deposits of including corporations with limited liability.
any other mineral substance (excluding phosphates). The
ONHYM is under the control of the MMEM and the
performance of its commercial activities is subject to the
control of the MMF.
60
Are there any foreign investment approval enter into an association agreement setting up the relations
Morocco
between the parties.
shareholding in the entity undertaking the activity)? Exploitation concession
Moroccan legislation and regulations apply equally to both Following the exploration works, should an exploration
Moroccan nationals and foreign investors. It should, permit holder discover an oil deposit that may be
however, be remembered that the Moroccan state, through commercially exploited, it is entitled to request an
the ONHYM, shall have a maximum 25% interest in any exploitation concession relating to this deposit, provided
exploration permit or exploitation concession, with the that it has fulfilled its legal and contractual obligations.
actual level to be held by ONHYM negotiated at the time of The request for an exploitation concession shall be
entering into the petroleum agreement. submitted to the MMEM no later than 3 months before the
end of the term of the validity period of the corresponding
exploration permit. This concession is awarded by decree
Licensing following a request from the MMEM.
Identify the main fiscal/legal model granting rights Fiscal

Oil exploration, production, transportation, and marketing
Legal and distribution activities are taxed under the common
Moroccan tax rules, but are subject to a certain number of
The MMEM is in charge of reviewing oil operators’
tax advantages granted to oil and gas operators in order to
applications for reconnaissance licenses, exploration
promote their activities in Morocco.
permits and exploitation concessions.
Below are listed some of the tax incentives provided under
Reconnaissance licence the Hydrocarbon Code:
Reconnaissance licences are granted further to the ― The holder, or as the case may be, the co-holders of
conclusion of a reconnaissance agreement with the any exploitation concession benefit from a total
ONHYM and upon the filing of a request by a decision of exemption on corporate income tax during a 10 year
the MMEM, specifying the terms and conditions of the period starting as from the date of the beginning of the
licence (validity period, validity area, etc.). regular production under any exploitation concession;
Once the reconnaissance works are completed, the parties ― All equipment, products and services necessary for
to the reconnaissance agreement (or third parties) may the reconnaissance, exploration and exploitation
decide to begin exploration works. In that respect, the works are exempted from value added tax (‘VAT’) and
ONHYM and the oil operator shall enter through bilateral customs duties; and
negotiations into a petroleum agreement setting the
respective rights and obligations between them for ― Profits and dividends of the exploitation concessions
exploration and, as the case may be, exploitation. holders (and those of the shareholders of the
concession companies) are exempted from any taxes
Exploration permit and may freely be repatriated outside Morocco without
limitations for foreign entities.
Following the negotiation and finalisation of the draft
petroleum agreement, the document is sent to the MMEM Please outline the procedure to apply to the
for an agreement in principle. Once this agreement is Government for an interest in a Licence in your
executed between the parties, a request for an exploration country. Please include details of cost and timing
permit may be filed. for obtaining such interest.
The MMEM is in charge of granting exploration permits Please refer to the section above entitled ‘Legal’ for details
through a ministerial order and within 60 days of the date on the procedure.
of filing of the request. It is granted following the approval
of the corresponding petroleum agreement by joint What is the customary duration of the relevant
ministerial order of the MMEM and the MMF. Exploration Licence?
permits may only be granted to one legal entity or several
With regard to oil upstream activities, reconnaissance
legal entities on a joint ownership basis. In addition to the
licences may be granted for a maximum initial period of 1
petroleum agreement, the ONHYM and its partners shall
year which can then be extended for additional periods of a
maximum duration of 1 year each, and for either part or the
61
whole of the licence area, provided that undertakings
Assignment
Morocco
concerning the first period have been fulfilled.
Exploration permits may be granted for a maximum 8 year What Government and/or regulatory approvals are
period. However, when a discovery of hydrocarbons occurs required for the acquisition of oil and gas interests
during the last year of validity of the permit, its duration held under a Licence (whether by asset or
may be extended for an exceptional period of a maximum corporate sale/change of control)?
of 2 years to allow for the assessment of such discovery.
The maximum validity period for an exploitation concession of obtaining such Government and/or regulatory
amounts to 25 years. However, a sole exceptional approvals?
extension that cannot exceed 10 years may be granted, if
In accordance with article 8 of the Hydrocarbon Code, the
the rationale and economic exploitation of the deposit
total or partial transfer of any interest in an exploration
justifies it.
permit or exploitation concession is subject to prior
Does the Government have any right to participate Government consent (in the form of a ministerial order of
and be carried in the Licence? If so, please describe the MMEM in the case of exploration permits and a decree
the extent of this entitlement. upon proposal of the MMEM in the case of exploitation
concessions). Contrary to other oil titles, reconnaissance
Is there any mechanism for recovery of carry licenses are not transferable.
costs?
The Hydrocarbon Code does not provide any specific
In order to carry out oil exploration and exploitation timetable for this process. Our experience is that the
activities in Morocco, any operator must enter into a timescale for assignment of an interest in a permit is more
petroleum agreement with the ONHYM, and provide the or less the same as for the grant of a permit under article 7
ONHYM with no more than a 25% interest in the of Decree No. 2-93-786, being 60 days from the date the
exploration permit and, as the case may be, the application is filed.
exploitation concession.
The Hydrocarbon Code does not contain any provision
The ONHYM benefits from a specific legal regime that relating to the change of control of a company holding oil
entitles it to hold titles and permits without being bound by and gas assets. Nevertheless, such a change of control of
the legislative and regulatory constraints on the number the operator may, in certain situations, have to be notified
and nature of these titles and permits and the maximum to the ONHYM.
surface area of exploration permits. The ONHYM can
No specific fees are applicable in the case of a transfer or
either act independently, or conclude partnerships with
change of control. However, it should be noted that if the
private entities, whether Moroccan or not.
exploration permit or exploitation concession is sold, the
Does the Government have any right to participate price paid to the seller may be taxable for corporate
in the operatorship of the Licence? income tax purposes.
The OHNYM may also participate in the operatorship of oil Are there any pre-emptive rights reserved to any
titles since it may, in compliance with Law No.33-01, in any Government entities in the event of a proposed
authorised area, develop oil exploration and perform oil assignment of an interest held under a Licence? If
exploitation activities relating to hydrocarbons deposits. so, what are the terms upon which such entities are
The Moroccan state is entitled to exercise a pre-emptive

right where the transfer of the exploitation concession is
made to a third party other than the parent company or an
affiliate of the transferor. The pre-emptive right is valid for a
period of 120 days from the date of notification by the
concessionaire of its intention to enter into a deed of
transfer.
62
Economic support Abandonment and
Morocco
Are parental guarantees or other economic Decommissioning
and gas companies?
It is often provided in reconnaissance agreements that the Are security deposits required in respect of future
operator must issue or procure the issuance of an decommissioning liabilities?
irrevocable bank guarantee in favour of the ONHYM for the According to article 6 of the Hydrocarbon Law, the
amount specified in the agreement. An operator failing to concession and its outbuildings (field, buildings, machinery,
comply with its minimum work programme obligations will etc.) freely return to the Moroccan state upon the ending of
be subject to the payment of a penalty to the ONHYM up to its term, free of any charges. The holder of the concession
the amount of the bank guarantee. title shall, in that respect, return the outbuildings relating to
the concession to a state allowing the pursuance of the
normal exploitation of the reservoir. Should the carrying out
of the exploitation no longer be justified, the holder of the
In order to obtain an exploration permit, the operator and concession title has the obligation to clean the site in
the ONHYM enter into a petroleum agreement and an accordance with good oil sector practice.
association agreement. In accordance with article 22 of the
Any holder of an exploration permit or an exploitation
Hydrocarbon Law, the holder of an exploration permit may
concession having performed its obligations within the
have an obligation to provide a security deposit in order to
allotted time is entitled to abandon its title, either in whole
guarantee its contractual obligations. The guarantee
or in part. When the permit or the concession is held jointly,
usually requested by the ONHYM is a performance bond
the abandonment of one co-venturer does not prevent the
from a bank for the minimum work programme.
other holders from taking on the obligations of the leaving
co-venturer. Should one concession co-venturer decide to
withdraw either partially or totally, the Moroccan state may
exercise a priority right over all or part of the relinquished
concession.
We are not aware of any security deposits specifically

aimed at future decommissioning liabilities.
63
Mozambique
Conducting oil and gas activities in Mozambique

― Law No. 21/2014 of 18 August (“Petroleum Law”) sharing contract/ licence/concession (“Licence”) in
― Decree No. 34/2015 of 31 December (“Petroleum incorporate a subsidiary, or register a branch?
Operations Regulations”)
Mozambican or foreign legal entities that are registered in
― Law No. 27/2014 of 23 September (Specific Regime Mozambique and who demonstrate that they have the
of Taxation and Fiscal Benefits of Petroleum technical capability and adequate financial resources for
Operations) the effective undertaking of petroleum operations may be
― Decree No. 32/2015 of 3 December (Regulation of the holders of the right to carry out petroleum operations in the
Specific Regime of Taxation and Fiscal Benefits of country. The incorporation of a subsidiary in Mozambique
Petroleum Operations) is required for any international company to carry out such
operations.
― Decree No. 56/2010 of 22 November (Environmental
Regulation for Petroleum Operations) Are there any foreign investment approval
― Decree No. 45/2012 of 28 November (Regulation on
the importation and marketing of petroleum products)
― Decree No. 63/2011 of 7 December (Regulations for
The Petroleum Law establishes that any investor who is
the hiring of citizens of foreign nationality in the
interested in conducting petroleum operations in
petroleum and mining sector)
Mozambique must associate itself with the state oil
― Decree No. 2/2014 of 2 December (special legal and company ENH.
contractual regime applicable to the LNG project of
blocks 1 and 4 of Rovuma basin)
Licensing
― Ministerial Diploma No. 272/2009 of 30 December
(approving the Regulations on the Licensing of Identify the main fiscal/legal model granting rights
Petroleum Installations and Facilities) to explore and produce oil and gas.
Identify the Government, regulatory and/or Legal

Although the Petroleum Law does not define the relevant
type of partnership agreement, normally this is executed
The government regulatory and oversight bodies either through the incorporation of a special purpose
responsible for regulating the petroleum industry are the vehicle (“SPV” – a commercial company owned by the oil
Ministry of Mineral Resources and Energy, and the company and ENH) or through a production sharing
National Petroleum Institute (“INP”). agreement (“PSA”).
The National Oil Company is called Empresa Nacional de A model form PSA is available from ENH on request (the
Hidrocarbonetos (“ENH”). “Model PSA”).
The rights to explore and produce are granted to the

concessionaire through a concession regime (concession
contract) following a public tender promoted by the State
64
Mozambique
(in which are included all the relevant procedures and time ― An exploration and production concession agreement
frame). is divided into two periods: a maximum period of eight
years for exploration operations and a maximum
Fiscal
period of 30 years for development and production
Under the Petroleum Law, natural and legal persons who operations.
are holders of a right to conduct petroleum operations are
― A concession agreement for the construction and
subject to the payment of the following fiscal impositions,
operation of oil or gas pipeline systems is executed for
apart from petroleum-specific taxes:
a maximum period of 30 years.
― Corporate Income Tax
― The Petroleum Law is silent in relation to the duration
― VAT and Special Consumption Tax; of infrastructure construction and operation
concessions, and the duration of these contracts is
― Municipal Taxes; and
generally negotiated and fixed by agreement between
― other taxes and fees established by law. the parties.
In addition, Petroleum Production Tax (“PPT”) shall be Does the Government have any right to participate
levied on all petroleum produced in the Mozambican and be carried in the Licence? If so, please describe
territory. PPT tax rates are 10% for crude oil and 6% for the extent of this entitlement.
natural gas.
The State reserves the right to participate in petroleum
Income generated in connection with petroleum activities in operations. In this context, the Petroleum Law establishes
Mozambique is subject to the common Corporate Income that any investor who is interested in conducting petroleum
Tax. However due to the specificities of the sector a operations in Mozambique must enter in partnership with
special taxation regime was enacted establishing specific the state oil company ENH on a free-carry basis. The
rules notably: (i) ring fencing; (ii) income definition; (iii) terms of such carry will be included in the SPV
capital gains rules; (iv) depreciation of assets; and (iv) tax shareholders’ agreement (or similar agreement between
deductible and non-deductible costs. This regime also ENH and the IOC) and / or the PSA.
establishes a special tax benefits regime.
The government body responsible for tax collection is the
costs?
Mozambique Tax Authority.
According to the Model PSA, carry costs may be
Please outline the procedure to apply to the reimbursed, after beginning of commercial production, by
Government for an interest in a Licence in your the State through ENH in cash or in kind. This
country. Please include details of cost and timing reimbursement shall recovered from the cost oil portion of
for obtaining such interest. production.
The application for a License, after one has been offered
through a public tender by the State is submitted to the
Ministry of Mineral Resources and Energy. The application
must include evidence of the applicant´s trustworthiness, The operator must be a qualified company with a track
technical capability and financial capacity. record of experience in the petroleum sector and keep the
INP informed of the development of the projected activities
The applicant will prove this by including in its application
plan. The State reserves the right to participate in
evidence of experience in petroleum operations, suitable
petroleum operations through the state oil company ENH
documentation supporting its financial capacity, annual
however operation is usually undertaken by the
report of fiscal activities, including the balance of the
concessionaire.
accounts of the last three years as audited.

Licence?
The duration pf the Licence depends on the type of

concession agreement, of which there are four types.
― A research concession agreement is executed for a

maximum period of 2 years.
65
Mozambique
Assignment Abandonment and

What Government and/or regulatory approvals are Decommissioning
corporate sale/ change of control)? Are security deposits required in respect of future
The Petroleum Operations Regulations allow a decommissioning liabilities?
concessionaire to transfer its interest to any third party The abandonment and decommissioning of oil and gas
after receipt of consent to such transfer from the Minister of facilities and pipelines is governed by the Petroleum Law
Mineral Resources and Energy. The same is also required and the Petroleum Operations Regulations.
in relation to change of control of the concessionaire.
A detailed decommissioning plan must be prepared by the
If any, what are the timing requirements and costs concessionaire, in consultation with the INP, and submitted
of obtaining such Government and/or regulatory no less than 2 years prior to the date on which production
approvals? operations are expected to cease, for approval before the
Minister of Mineral Resources and Energy.
The relevant timing requirements will vary from case-to-
case. Before the beginning of the production or the use of
infrastructure for petroleum operations, the concessionaire
Are there any pre-emptive rights reserved to any must open a bank account in an amount to be agreed with
Government entities in the event of a proposed INP, at a bank of its choice in which it will periodically
assignment of an interest held under a Licence? If deposit funds covering the costs foreseen for
so, what are the terms upon which such entities are decommissioning.
There are no pre-emptive rights.
Economic support
and gas companies?
An unconditional and irrevocable guarantee from the

mother company guaranteeing the fulfilment of the
contractual duties arising from the relative concession
contract is usually required.

The concessionaire must present a bank guarantee in an

amount equivalent to the minimum work obligations.
66
Namibia
Conducting oil and gas activities in Namibia

The relevant legislation in Namibia is:
― Article 100 of the Constitution of the Republic of incorporate a subsidiary, or register a branch?
Namibia 1990 (the ‘Constitution’);
Licences are granted by way of application. An application
― The Petroleum (Exploration and Production) Act 1991 must contain particulars of the applicant’s proposed
(Act 2 of 1991) (the ‘Petroleum Act’); minimum exploration operations and expenditure in respect
of the block or blocks to which the application relates,
― The Petroleum (Taxation) Act 1991 (Act 3 of 1991)
amongst others.
(the ‘Taxation Act’) as amended by the Petroleum
Laws Amendment Act of 1998; Section 10 of the Petroleum Act states that exploration and
production licences may only be granted to companies but
― The Water Act 54 of 1956;
there is no statutory requirement for the company to be
― The Atmospheric Pollution Prevention Ordinance 11 of incorporated in Namibia. However, within 21 days of
1976; establishing a place of business in Namibia, all foreign
companies must lodge with the Registrar of Companies
― The Prevention and Combating of Pollution of the Sea
such relevant documents to constitute the foreign company
by Oil Act 6 of 1981; and
locally.
― The Environmental Management Act 7 of 2007.
The Petroleum Act requires an applicant for a petroleum
Identify the Government, regulatory and/or licence to enter into a petroleum agreement with the State.
oversight bodies principally responsible for This agreement must be entered into before an exploration
regulating oil and gas activities. or production licence is issued to an applicant. The content
of the petroleum agreement is prescribed by the Petroleum
The Petroleum Act is administered by the Minister of Mines Act.
and Energy, who appoints a Commissioner of Petroleum
Affairs (‘Commissioner’) and a Chief Inspector of Are there any foreign investment approval
Petroleum Affairs (‘Chief Inspector’). These officers requirements or restrictions when commencing
exercise or perform the powers, duties and functions business in your country (e.g. a minimum local
conferred or imposed upon them by or under the provisions shareholding in the entity undertaking the activity)?
of the Petroleum Act and such other functions as may be
There is no legislation providing for local content, however,
imposed upon them by the Minister. The Commissioner
the Cabinet has resolved to create a policy in this regard.
and Chief Inspector are assisted by such other officers as
The New Equitable Economic Empowerment Framework
may be designated by the Minister of Mines and Energy for
(‘NEEEF’) is aimed at, amongst other things, ensuring a
such purpose.
socially just society, in which the Namibian people have
The Petroleum Ancillary Rights Commission (the equitable and sustainable share in their resources. This
‘Commission’) is also established under the Petroleum policy outlines the pillars on which its objectives will be
Act. The Commission principally deals with disputes attained. It provides for a scoring system which serves to
between licence holders and landowners. measure compliance with the policy. The pillars are listed
as:
67
― Ownership; ― Businesses will score better if their own training
expenditure is more than 1% of the payroll;
―
Namibia
Management control and employment equity;

― Employment visas for expatriates will depend on the
― Human resources and skills development;
business’ scoring in this section; and
― Entrepreneurship, development and marketing;
― A minimum of 10 points for expenditure representing
― Corporate social responsibilities; and 0.5% of gross wages being spent on training,
calculated as total training costs less the VET levy
― Value addition, technology and innovation.
contribution.
Achieving the minimum score in the three sectors listed
below is mandatory:
Licensing
Ownership
― 25% of the shares held in any new businesses must Identify the main fiscal/legal model granting rights
be held by previously disadvantaged Namibians to explore and produce oil and gas.
before they are allowed to commence business; Legal
― ‘Previously disadvantaged Namibians’ are those Under Article 100 of the Constitution ownership of all
Namibians that are ‘racially disadvantaged persons, natural resources on, in or under any land in Namibia is
women and the disabled’; vested in the State, unless they are otherwise lawfully
― ‘Racially disadvantaged persons’ are those persons owned. This includes all oil and natural gas, which is
that belong to a racial or ethnic group which was or is, generally referred to as petroleum in Namibian legislation.
directly or indirectly, disadvantaged as a consequence The upstream petroleum industry in Namibia is primarily
of social, economic, or educational imbalances arising regulated by the Petroleum Act. The Petroleum Act
out of racially discriminatory laws or practices before provides for the reconnaissance, exploration, production
the independence of Namibia; and disposal of petroleum, as well as the control over
― Existing businesses must meet the minimum score petroleum. It provides that all rights in respect of petroleum
target of 10 points; and vest in the State notwithstanding any right with regard to
the ownership of the land where the petroleum is found. No
― The minimum score of 10 points for 25% shareholding person may carry on any operations in respect of
being held by previously disadvantaged Namibians, petroleum without the necessary licence issued by the
must be complied with before a business can enter Ministry of Mines and Energy. The Petroleum Act also
into a public contract for procurement, obtain rights to provides for the payment of petroleum royalties.
exploit natural resources or continue to conduct a
licensed trade. The Taxation Act provides for the payment of petroleum
income tax and additional profit tax. These apply in tandem
Management control and employment equity with environmental legislation.
― For new businesses, 50% of the combined board and Aside from the legislative framework regulating the
top management structures must include previously petroleum industry, Namibia also has an out-dated white
disadvantaged Namibians before they are allowed to paper on energy policy, which was published in May 1998.
commence business; This policy has as its goals: (i) effective energy sector
― Existing businesses should comply with the minimum governance; (ii) security of supply; (iii) social improvement;
score of 10 points, which can be achieved if the (iv) investment and growth; (v) economic competitiveness;
combined board and top management structures and (vi) efficiency and sustainability.
include 50% previously disadvantaged Namibians; Fiscal
and
― Rents: The Petroleum Act provides for the payment of
― The minimum must be met in order to access mineral annual charges by holders of exploration and
rights. production licences over the exploration and
Human resources and skills development production areas. The annual charges are calculated
by multiplying the number of square kilometres
― All employers with an annual payroll of over N$1 included in the block or blocks to which the licence
million must pay a Vocational Education and Training relates by different values depending on the nature of
(‘VET’) levy; the licence. In the case of exploration licences the
68
multiplier depends on the particular period during Please outline the procedure to apply to the
which operations are executed, and in the case of Government for an interest in a Licence in your
Namibia
production licences the multiplier used is 1500. country. Please include details of cost and timing
― Royalties: Royalties are charged by virtue of the
Petroleum Act. They are payable quarterly on or The procedure for acquiring such rights is by way of
before the last day of each month following each application, which must contain particulars of the
quarter. The rate at which royalties are charged applicant’s proposed minimum exploration operations and
depends on the licensing round in which the licence expenditure in respect of the block or blocks to which the
was issued. Royalties on licences issued during the application relates.
first and second licencing rounds are charged at a rate
of 12.5% of the market value of the licence, What is the customary duration of the relevant
determined in the terms and conditions of such licence Licence?
and based on the petroleum produced and saved in An exploration licence is valid for a maximum period of 4
the production area during each quarter. Royalties on years and may be renewed twice for periods of 2 years per
licences issued during the third and fourth licensing renewal. The maximum period for which one can hold an
rounds are charged at a rate of 5% of the market exploration licence is 8 years.
value.
A production licence is valid for a maximum period of 25
― Tax: The tax regime for petroleum exploration and years and may be renewed only once for a further period of
production activities is regulated by the Taxation Act. 10 years. The maximum period that one can therefore hold
The Taxation Act provides for the levy and collection a production licence is 35 years.
of petroleum income tax and additional tax on profits.
The rate of petroleum income tax is 35% of the Does the Government have any right to participate
taxable income received by or accrued from a licence and be carried in the Licence? If so, please describe
area. Each licence area is assessed separately and the extent of this entitlement.
losses in one cannot be set off against profits in
another. Is there any mechanism for recovery of carry
costs?
The Taxation Act further provides for levying of
additional tax on profits in respect of the first, second Before an exploration or production licence is issued, the
and third accumulated net cash position determined Minister of Mines and Energy must enter into a petroleum
for each tax year. agreement (‘Petroleum Agreement’) with the person
concerned. The Petroleum Agreement may contain terms
Annual surface charges are also payable by holders of relating to the participation, including the acquisition of
exploration and production licences and are calculated equity share capital, by the State. These terms are subject
on the number of square kilometres included in the to agreement to be reached with the State. There is no
block to which the licence relates. maximum participation interest set and there are no
Other tax laws that apply to the oil industry are: mandatory carry requirements provided for under the
Petroleum Act.
(a) The Income Tax Act 24 of 1981, as amended,
which provides for withholding tax of 10% Does the Government have any right to participate
imposed on all management, consulting, in the operatorship of the Licence?
technical, administrative and entertainment
The Petroleum Act does not confer any right to the State to
services paid by a Namibian resident to a non-
participate in the operatorship of a licence.
resident, subject to the provisions of any double
taxation agreements;
(b) The Value Added Tax Act 10 of 2000 which

currently rates VAT at 15%; and
(c) The Stamp Duties Act 15 of 1993 which provides

for the collection of stamp duties on instruments
at rates determined in the schedule to the Act.
The Ministry of Finance is the government body that

exercises tax authority.
69
Assignment Economic support
Namibia
What Government and/or regulatory approvals are Are parental guarantees or other economic
required for the acquisition of oil and gas interests supports commonly required to be provided by oil
held under a Licence (whether by asset or and gas companies?
The incorporation of terms and conditions providing for
If any, what are the timing requirements and costs performance bonds and parental guarantees to ensure the
of obtaining such Government and/or regulatory due and proper performance by the company of its
approvals? obligations are typically agreed to in Petroleum
Agreements.
The consent of the Minister of Mines and Energy is
required for assignment of any Licence, or any right, power Are security deposits required in respect of work
or interest therein. commitments or otherwise?
No fees are payable for the assignment of interests in a The above bonds and guarantees are the only security
licence and there is no fixed period within which the required.
Minister must make a decision on the application for
assignment of interest. Typically however, this may take
anywhere between 2 weeks to 4 months. Abandonment and
Further, Competition Commission approval may be Decommissioning
necessary should a change of control be established over
the whole or part of the business of the target undertaking What abandonment regime is in place?
and the value of the transaction breach certain merger
thresholds.
Are there any pre-emptive rights reserved to any The Petroleum Act provides that the holder of a production
Government entities in the event of a proposed licence shall, on a date determined by the Minister of
assignment of an interest held under a Licence? If Mines and Energy by written notice to such holder, which
so, what are the terms upon which such entities are shall not be earlier than the date on which 50% of the
allowed to acquire the interest? estimated recoverable reserves of petroleum in the
None. production area would have been produced, establish a
trust fund for the purpose of decommissioning facilities.
The board of trustees determines the amount to be
deposited annually not later than 30 days after the end of
each calendar year and it is calculated in accordance with
a formula based on the levels of production as may be
determined by the Minister of Mines and Energy by notice
in the Gazette.
70
Nigeria
Conducting oil and gas activities in Nigeria

exploration and production activity in Nigeria. shareholding in the entity undertaking the activity)?
The relevant legislation in Nigeria is: There are no oil and gas specific foreign investment
approval requirements. However, all foreign investors
― The Deep Offshore and Inland Basin Production
seeking to incorporate companies in Nigeria are subject to
Sharing Contracts Act, Cap D3, Laws of the
the following requirements:
Federation of Nigeria (‘LFN’) 2004;
― Nigerian Investment Promotion Council registration for
― The Nigerian Oil and Gas Industry Content
which a Certificate of Business Registration will be
Development Act No. 2 of 2010;
issued. Companies with foreign investors are required
― The Petroleum Act, Cap P10 LFN 2004; and to have a minimum share capital of ₦10,000,000
(circa $50,000); and
― The Petroleum Profits Tax Act, Cap P13 LFN 2004.
― Registration with the Ministry of Interior for which a
Identify the Government, regulatory and/or Business Permit will be issued.
regulating oil and gas activities in Nigeria. It is important to note that companies with at least 51%
equity held by a Nigerian person(s) will be accorded first
The Minister of Petroleum Resources (‘Minister’), the consideration in the award of licences.
Department of Petroleum Resources (‘DPR’): and the
Nigerian Content Development Monitoring Board.
Licensing
Entry requirements Identify the main fiscal/legal model granting rights
becoming a licensee of an oil and gas production Legal
sharing contract/licence/concession (‘Licence’) in The Petroleum Act 1969 vests all rights to Nigeria’s
Nigeria? For instance, is it necessary to incorporate petroleum resources (including resources situated on land,
a subsidiary, or register a branch? in the territorial waters, on the continental shelf and in the
To become a licensee, a company must be incorporated in Exclusive Economic Zone) in the Federal Republic of
Nigeria under the Companies and Allied Matters Act, Cap Nigeria; but the Government (through the Minister) can
C20 LFN 2004. Licences are typically awarded in bid grant licences that confer exclusive rights (except in the
rounds, which will usually include more specific case of an oil exploration licence) to explore and produce
requirements, in addition to being incorporated in Nigeria. petroleum, (each a ‘Licence’ or ‘Lease’).
Requirements which have been prescribed in the past The Minister is empowered to grant the following:
include: (i) requiring the applicant to have a local partner
consisting of local entrepreneurs; (ii) requiring a ― An oil exploration licence, to explore for petroleum,
commitment to pursue strategic downstream projects such however this is no longer granted in practice. The
as petroleum refineries and independent power projects; current practice involves the engagement of a seismic
and (iii) requiring the relevant company alone (or together data gathering company to provide seismic
with its technical partner(s)) to have a specified minimum information, which is then made available for
net worth. consideration by prospective oil prospecting licensees;
71
― An oil prospecting licence, to prospect for petroleum (g) Offshore production in areas in excess of 1000
with the right to carry away and dispose of petroleum metres water depth: 0%.
Nigeria
won during prospecting operations; and

The royalty rate payable under the PSCs in the inland
― An oil mining lease, to search for, win, work, carry basin is 10%.
away and dispose of petroleum.
Tax
The format for Licences and Leases, as well as the rights
― Oil and gas companies are not subject to the general
and obligations applicable to such Licences and Leases
income tax usually applicable to Nigerian companies,
are as prescribed in the Petroleum Act 1969 and
but are instead subject to a special petroleum profits
secondary legislation made pursuant thereto. Licences are
tax with the following rates for crude oil production:
typically awarded during bid rounds where Licences are
auctioned. In recent times, (as opposed to Licences) the (a) 65.75% (within the first 5 years) for
Minister (through the DPR) has auctioned production onshore/shallow water production where a
sharing contracts (‘PSC’) with the national oil company, the company has not fully amortised all pre-
Nigerian National Petroleum Corporation (‘NNPC’). Model production capitalised expenditure;
PSCs for the bid rounds are typically issued when the bid
(b) 85% for onshore/shallow water production where
round is announced.
a company has fully amortised all pre-production
Fiscal capitalised expenditure (after the first 5 years);
― Rents: The licensee is required to pay the following (c) 50% for production from contract areas under a
annual rents to the Government: PSC in the deep offshore waters (beyond 200
meters) and inland basins (as defined by the
(a) For oil prospecting licences: US$10 per square
Minister); and
km or part thereof; and
(d) 55% for marginal fields operations.
(b) For oil mining leases:
Dividend income from petroleum operations is exempt
(i) US$20 per square km or part thereof of a
from tax.
producing oil mining lease, for the first 10
years; and Gas production is generally exempt from the
petroleum profits tax but is rather subject to general
(ii) US$15 per square km or part thereof after
corporate income tax at the rate of 30%.
the first 10 years and until expiration of the
lease and on renewal. Notwithstanding the separate tax regime for gas
production, in certain qualifying circumstances (such
― Royalties: The licensee is required to pay royalties to
as investment for separation of crude oil and gas from
the Government in respect of production of crude oil
reservoirs into usable form and for delivery of gas at
and casing-head petroleum spirit. The royalty is
custody transfer point), licensees and lessees are
chargeable as a percentage of the value of
permitted to consolidate gas production expenses with
production. This is usually in the form of monthly cash
crude oil expenses for purposes of petroleum profits
payments. The rates are as follows:
tax.
(a) Onshore production: 20%;
In addition to the foregoing taxes, all petroleum
(b) Offshore production in areas up to 100 metres companies are also subject to the following:
water depth: 18.5%;
(a) A 2% education tax chargeable on assessable
(c) Offshore production in areas up to 200 metres profits;
water depth: 16.5%;
(b) An Industrial Training Fund contribution of 1% of
(d) Offshore production in areas from 201 to 500 annual payroll;
metres water depth: 12%;
(c) An Employee Compensation Fund contribution of
(e) Offshore production in areas from 501 to 800 1% of monthly payroll; and
metres water depth: 8%;
(d) A 3% Niger Delta Development levy chargeable
(f) Offshore production in areas from 801 to 1000 on the total annual budget of any oil producing or
metres water depth: 4%; and gas processing company operating, onshore and
offshore, in the Niger Delta Area.
72
Please outline the procedure to apply to the ― On an application for renewal of an oil mining lease:
Government for an interest in a Licence in your US$1,000,000;
Nigeria
― On an application to withdraw any of the applications
specified in the 4 items above: ₦20,000;
Applications for Licences or Leases are to be made to the
― On an application to assign or sublet an oil
Minister in writing, utilising a prescribed form and
prospecting licence or an oil mining lease: ₦500,000
accompanied by the requisite documentation, including the
(under recent guidelines issued by the DPR, a
following:
premium of 1% to 5% of the transaction fee is
― 10 copies of a map on a scale or scales specified by payable);
the DPR detailing the boundaries of the area in
― On an application to terminate or effect a partial
respect of which the application is made;
surrender of an oil prospecting licence or an oil mining
― Adequate survey description of the boundaries of that lease: ₦50,000;
area or, where the area has been blocked out or
― On an application for a licence to operate a drilling rig:
delineated and described by or on behalf of the
₦20,000;
Minister, a reference to the particulars of identification
used; ― For a licence to operate a drilling rig: ₦100,000;
― Evidence of the financial status and technical ― For a permit to export samples for analysis: ₦10,000;
competence of the applicant; and
― Details of the work that the applicant is prepared to ― For renewal of a permit to export samples for analysis:
undertake or a programme for carrying out any ₦5,000.
minimum working obligations imposed;
― Details of the annual expenditure which the applicant Licence?
is prepared to make on each application area;
There are 3 categories of Licences:
― The date on which the applicant is prepared to begin
operations after the grant of the oil exploration licence, ― Oil exploration licences: 1 year to terminate on 31
oil prospecting licence or oil mining lease to which the December following the issue date;
application relates; ― Oil prospecting licences: up to 5 years including any
― Details of a specific scheme for the recruitment and renewals (for onshore and shallow water areas) and a
training of Nigerians; minimum of 5 years and an aggregate of 10 years for
deep offshore and inland basin areas, including any
― Evidence of the applicant’s ability to market any renewals; and
petroleum produced; and
― Oil mining leases: a maximum of 20 years but
― Annual reports in respect of the applicant’s oil renewable indefinitely for further periods of 20 years
exploration and production activities in the preceding each.
three years.
As above, Licences are generally auctioned in bid rounds
organised by the DPR from time to time. Bid rounds have
generally been irregular. Additional documentation and
information requirements will typically be included in any Is there any mechanism for recovery of carry
announced licensing rounds. costs?
Current fees for or in connection with applications are as In respect of Licences for concessions for the exploration
follows: and exploitation of petroleum in which all or part of the
― Processing fee: US$10,000; areas are in waters deeper than 200 metres, the
Government has the right, pursuant to the Deep Water
― On an application for oil prospecting licence: Block Allocations to Companies Regulations 2003 (the
US$10,000; ‘Back-in-Rights Regulations’), to acquire 5/6 of the
― On an application for an oil mining lease: licensees’ interest in the relevant Licence or Lease
US$500,000; (rounded up to the nearest whole percentage) on such
terms and conditions as the Government may determine,
73
provided that the Government had included a reservation the premium may be waived in circumstances where the
to do so in the original grant of the Licence or Lease. Minister is satisfied that the assignment is to be made to a
Nigeria
company in a group of which the assignor is a member,

Terms and conditions applicable to the back-in are to be at
and is to be made for the purpose of re- organisation in
least as favourable to the Government as those in force at
order to achieve greater efficiency and to acquire
the time of the enactment of the Back-in-Rights
resources for more effective petroleum operations.
Regulations. Otherwise, the terms will be revised such that
they mirror the terms applicable to the NNPC as contained An application for the assignment of Licence or Lease (or
in the model contracts in force at the latter of the date of of an interest in the same) shall be made to the Minister in
issuance of the Back-in-Rights Regulations and the writing and accompanied by the prescribed fee, and the
allocation of the Licence. applicant shall provide, in respect of the assignee, all such
information as is required to be provided in the case of an
The back-in-rights do not come with an express obligation
applicant for a new licence or lease (see above). The
to be carried.
recently issued guidelines for obtaining Ministerial consent
Does the Government have any right to participate stipulate that the Minister may charge a consent premium
in the operatorship of the Licence? of 1% to 5% of the consideration for such assignment.
The Government does not have the right to participate in Are there any pre-emptive rights reserved to any
the operatorship, except as contractually agreed between Government entities in the event of a proposed
the licensee and the Government. assignment of an interest held under a Licence?
If so, what are the terms upon, which such entities

Assignment are allowed to acquire the interest?

Government in the event of an assignment, except as
contractually agreed between the licensee and the
Government.
corporate sale/change of control)? If any, what are
the timing requirements and costs of obtaining Subject to the exact terms of the PSC, the amount of the
such Government and/or regulatory approvals? performance bond will usually be reduced annually by the
amount of verified expenditures. Ultimately, the bond will
The consent of the Minister is required for assignment of
be discharged at the end of each phase if the minimum
any Licence or Lease, or any right, power or interest
work programme or minimum financial commitment for that
therein. The rules have also been interpreted by the courts
phase has been fulfilled.
as applying to corporate sales which give rise to a change
of control. Recently, the DPR issued guidelines which
further expand the interpretation of the requirement to
Abandonment and
obtain Ministerial consent to cover any arrangements,
which may have the effect of transferring the ultimate Decommissioning
interest in a Licence or Lease. These arrangements
include mergers and acquisitions, public listings, internal What abandonment regime is in place?
restructurings involving licensees or lease holders (or their
parent companies), as well as any assignment of interest in
any contract concerning the exploitation of such Licence or
Lease. Further, the guidelines require that the DPR be Abandonment is regulated by the DPR. Under subsisting
involved by being periodically updated throughout the DPR regulations the written permission of the DPR is
negotiation process. Failure to provide status updates required for plugging or abandoning wells. Boreholes and
during the negotiation phase may result in the refusal of wells are to be abandoned in accordance with a strict
consent to any such transfer. abandonment programme approved or agreed with the
DPR.
An assignment fee prescribed by the Minister together with
a premium is typically charged. The assignment fee and/or
74
Republic of Congo
the Republic of Congo
Laws and regulations The Société Nationale des Pétroles du Congo (‘SNPC’) is
the national oil company of the Republic of Congo which
List the main legislation governing petroleum manages the country’s oil and gas resources.
The main legislation governing petroleum activities is Law Entry Requirements

no. 28-2016 dated 12 October 2016 (the ‘Petroleum
Code’), related to exploration and production of oil and gas What are the registration requirements for
in the Republic of Congo. becoming a licensee of an oil and gas production
Due to the general nature of the Petroleum Code, most of your country? For instance, is it necessary to
the specific provisions governing petroleum exploration incorporate a subsidiary, or register a branch?
and production are included in petroleum contracts
(‘Petroleum Contracts’). During the exploration period, the contractor is authorised
to operate through a local branch whereas under the
Uniform Acts adopted by the Organisation for the production permit, contractors operate through a locally
Harmonisation of Business Law in Africa (Organisation incorporated subsidiary for the remaining duration of the
pour l’Harmonisation en Afrique du Droit des Affaires or Petroleum Contract.
‘OHADA’), of which the Republic of Congo is a member
Pursuant to the OHADA Companies Act which is directly
State apply to companies carrying out oil and gas activities
applicable in the Republic of Congo, any foreign company
in the Republic of Congo, especially the OHADA
having registered a local branch must transform such local
Companies Act.
branch into a locally incorporated company after a
Oil and gas activities are subject to Exchange Control maximum of 4 years (i.e. an initial 2 year period, renewable
Regulations applicable within the Economic and Monetary once for a further 2 years).
Regulations adopted by the Economic Community of
Central African States (Communauté Economique des
Etats de l’Afrique Centrale or ‘CEEAC’) may apply to There is no limitation on foreign investment in the Petroleum
companies carrying out oil and gas activities in the Code. Local and foreign investors are treated equally.
Republic of Congo.
Pursuant to CEMAC Exchange Control Regulations, any
Identify the Government, regulatory and/or investment exceeding CFAF 100,000,000 must be declared
oversight bodies principally responsible for to the Economy Minister (Ministère de l’Economie) at least
regulating oil and gas activities. 30 days before the transfer of funds to the Republic of
Congo. If such declaration is not made, a fine equal to 20%
The Ministry of Hydrocarbons (‘MH’) and the Department
of the investment may be applied.
of Hydrocarbons (‘DoH”) are the government authorities
primarily responsible for the regulation of oil and gas A local company must be part of the contractor entity holding
activity in the Republic of Congo. a minimum 15% interest in the Petroleum Contract. Such
local company must be owned at least 50% by Congolese
nationals or by a company owned at least 50% by
75
Republic of Congo
Congolese nationals. This participating interest may be ― Production permit (permis d’exploitation). Such
increased to 25% in certain circumstances. permit is granted for a maximum period of 25 years for
liquid hydrocarbons and 30 years for natural gas or
solid hydrocarbons. A discretionary extension period
of 5 years may also be granted.
The Petroleum Code refers to the following types of
― Giving preference to local companies (i.e. majority
owned by Congolese nationals) for construction,
supply and services contracts provided they offer ― Production Sharing Contract (contrat de partage de
equivalent commercial and technical conditions. Such production or “PSC”). The State grants an exclusive
preference must still be given, in situations where the exploration right to the contractor entity and, in case of
local company’s commercial offer is higher by 10%; a discovery, an exclusive production right. The
contractor assumes financial and operating risks, and
― Hiring, in priority, skilled local employees; and
production is shared with the State in accordance with
― Financing and establishing training programmes for the Petroleum Code and the PSC.
local employees.
― Service Contract (Contrat de services à risques ou
These local content obligations apply to both contractors contrat d’assistance technique). Service contracts
and sub-contractors. may be entered into between the State and a
contractor for the performance of exploration or
production operations in a specific area for a fixed or
Licensing variable compensation. The Petroleum Code
expressly provides that such service contracts may be
Identify the main fiscal/legal model granting rights entered into to carry out production operations at the
to explore and produce oil and gas. expiry of a PSC. The contractor is paid for the
Legal performed services, and is reimbursed for incurred
petroleum costs.
Permits are exclusively granted to the SNPC. Private
companies may only hold participating interests in the A model contract may be provided to serve as a basis for
relevant Petroleum Contract in partnership with the SNPC; negotiations. In practice, only a model form PSC has been
together forming the contractor entity under the Petroleum issued.
Contract. The relevant authorisations and permits for Petroleum Contracts are negotiated and signed by the
carrying out petroleum operations are: State. Entry into force is subject to ratification by the
― Prospecting authorisation (autorisation de Parliament.
prospection). The holder of a prospecting Contracts entered into and permits granted under the
authorisation is entitled to perform preliminary surface previous hydrocarbons law (law no. 24-94 dated 23 August
prospecting works, on a non-exclusive basis. The 1994) remain in full force and effect. Upon expiry and
authorisation is granted for a 12 month period and is where a renewal is requested, such contracts and permits
renewable once. Prospecting results are disclosed to become governed by the Petroleum Code.
and belong to the MH. The transfer of rights and
obligations arising from such authorisation is Fiscal
prohibited. Contractors are subject to taxes and other contributions
― Exploration permit (permis d’exploration). An under the Petroleum Code and the relevant Petroleum
exploration permit is granted on an exclusive basis for Contract.
an initial 4 year period (6 year period in case of ― Bonuses: a bonus is due at
difficult access sedimentary basins), renewable twice
for additional 3 year periods. At each renewal, the (a) granting of an exploration or production permit;
holder must relinquish 50% of the area covered by the (b) signing of the PSC and any amendments;
permit. A discretionary extension period of 12 months
may also be granted at expiry of the permit if a (c) prorogation of a production permit; and
petroleum field has been discovered within the (d) any other bonus may be agreed in the Petroleum
perimeter of the exploration area. Contract.
76
Republic of Congo
― Proportional mining royalty: at a rate of 15% for geophysical and drilling work as well as social
liquid hydrocarbons. This percentage may be reduced projects;
as low as 12% for petroleum operations carried out in
― Level of financial commitments, including bonuses,
difficult areas such as the inner basin or deep waters
social projects, profit-oil for the State;
(beyond 500 meters). For natural gas, the proportional
mining royalty is at a rate of 5%. The mining royalty ― Financial statements of the Contractor for the past 3
must be paid by no later than the 20th of each month; years.
― Surface area royalty: an annual surface area royalty Implementation regulations for the Petroleum Code are yet
is due and amounts are to be specified by regulation. to be introduced. The above list is based on the previous
regulations. In certain circumstances, companies may
― Provision for diversified investments: at a rate of
enter the market by direct negotiations with the MH.
1% of the net hydrocarbon production value.
― Transfer duty: transfer of rights under the PSC to What is the customary duration of the relevant
third parties is subject to a 10% tax in case of capital Licence?
gain except in the case of transfer between a member Please refer to the ’Legal’ section above for information on
of the contractor and a wholly owned local company. the duration of relevant authorisations and permits
― VAT: petroleum activities are exempted from VAT.
― Corporate Tax: calculated according to the common and be carried in the Licence? If so, please describe
rate (currently 30%) and as detailed in the Petroleum the extent of this entitlement.
Contract.
The Government takes part in petroleum operations
― Customs: imports of approved goods exclusively directly or through the SNPC which is entitled to a
related to petroleum operations are exempted from minimum non-transferable 15% participation. According to
customs duties. Also, exports of produced the Petroleum Code, the State’s participation may be
hydrocarbons, exports of samples and re-exports of increased and is a criterion to the tendering procedure.
imported goods are exempted from customs duties. Unless SNPC is the operator, it share of exploration costs
are fully carried by each member of the contractor.
In addition to the above fiscal regime, the Republic of Congo
has a prescribed system for revenue sharing in relation to Is there any mechanism for recovery of carry
production activities: costs?
― Cost stop: the amount of recoverable costs is limited Carried exploration costs are recovered as part of the
to an annual 50% cost stop. A higher cost stop up to revenue sharing regime included in the Petroleum
70% for a limited period of time may be included in the Contract.
PSC for important or exceptional exploration and
production works (e.g. deep water areas or the interior Does the Government have any right to participate
basin). in the operatorship of the Licence?
― Profit oil: The share of the Government in profit oil The State may participate as operator, directly or through
cannot be lower than 35% in each calendar year. SNPC, in petroleum operations.

Government for an interest in a Licence in your Assignment
country.
Please include details of cost and timing for required for the acquisition of oil and gas interests
obtaining such interest. held under a Licence (whether by asset or
Companies must have the required technical and financial corporate sale/change of control)?
capabilities (as listed in the tender documents), including:
― Experience of oil & gas activities; of obtaining such Government and/or regulatory
approvals?
― Commitments regarding local content requirements;
Transfer of rights and obligations as well as authorisations
― Relevance of the minimum work programme to be
and permits arising from Petroleum Contracts is subject to
undertaken, including contemplated geological,
77
Republic of Congo
the assignee demonstrating its technical and financial Are security deposits required in respect of work
skills. commitments or otherwise?
Are there any pre-emptive rights reserved to any The Petroleum Code requires each contractor to provide
Government entities in the event of a proposed the Government with a letter of guarantee from the parent
assignment of an interest held under a Licence? If company or an on demand guarantee issued by a first
so, what are the terms upon which such entities are ranking bank. The purpose of such guarantee is to cover
allowed to acquire the interest? all the obligations of the contractor in relation to the work
commitments.
Government.
Abandonment and
Economic Support Decommissioning
Are parental guarantees or other economic What abandonment regime is in place?
and gas companies?
The Petroleum Code states that parent company
A provision for the funding of abandonment and
guarantees are to be provided if the contractor does not
rehabilitation works must be established. The funds are
have the financial and technical capacity to perform
deposited in an escrow account opened at the deposit
prospecting, exploration, exploitation and transportation
office (‘Caisse des Dépôts et Consignations’).
activities.
In addition, the Petroleum Code provides for the setting up
Unless otherwise provided for in the Petroleum Contract,
of a local fund dedicated to the prevention of environmental
security interests are governed by the OHADA Uniform Act
risks with a contribution of 0.05% of the pre-tax net
organising securities, applicable in the Republic of Congo.
production value.
78
Sao Tomé and Principe
São Tomé and Príncipe
enforcing the regulations relating to the Petroleum Law,

Preliminary Note contracting with third parties and overseeing petroleum
A Joint Development Zone exists between São Tomé and operations.
Príncipe and Nigeria along the maritime boundary of each
country. Oil and gas exploration and production in this area
is governed by the Treaty between the Federal Republic of
Entry requirements
Nigeria and the Democratic Republic of São Tomé and
Príncipe on the Joint Development of Petroleum and other
Resources, in respect of Areas of the Exclusive Economic
Zone of the Two States, signed in Abuja on 21 February
2001.
The Joint Development Zone is regulated by the Nigeria –
In São Tomé and Príncipe, a Licence can only be granted
São Tomé and Príncipe Joint Development Authority.
to local companies (incorporated in of São Tomé and
The remainder of this guide does not deal with the Joint Príncipe) or international companies that incorporate a São
Development Zone and focuses only on the Exclusive Tomé and Príncipe subsidiary or register a São Tomean
Economic Zone of Sao Tome and Principe. branch.

Laws and regulations requirements or restrictions when commencing
List the main legislation governing petroleum shareholding in the entity undertaking the activity)?
There is no particular provision regarding a minimum local
The primary legislation governing exploration and shareholding in the entity undertaking the activity.
production is the Legal framework for petroleum operations
in São Tomé and Príncipe is foreseen in Law 16/2009, of 4
November 2009 (“Petroleum Law”). Licensing
Other relevant legislation is the Petroleum Taxation Law, Identify the main fiscal/legal model granting rights
Law 15/2009, of 4 November 2009 (the “Petroleum Tax to explore and produce oil and gas.
Law”), and the Oil Revenue Law (Law 8/2004 of 30
December 2004). Legal
ANP-STP may enter, on behalf of the São Tomé and

Príncipe State, two types of petroleum contracts: (i)
Production Sharing Contracts (“PSCs”) whose model (the
“PSC Model”) was designed by ANP-STP and which is
The Ministry of Natural Resources, Energy and published on ANP-STP’s website; and (ii) the Risk Service
Environment is the government authority primarily Contracts (“RSCs”).
responsible for the regulation of the oil and gas activities in
Subject to the approval of ANP-STP, two or more
São Tomé and Príncipe.
companies may enter into a Joint Operating Agreement
The Agência Nacional de Petróleo de São Tomé e Príncipe (“JOA”) and sign either type of contract. Signing of the JOA
(“ANP-STP”) is the national regulatory body responsible for
79
and any amendments shall be subject to ANP-STP Does the Government have any right to participate
approval. and be carried in the Licence? If so, please describe
Fiscal
The State has the right to participate in petroleum
The Petroleum Taxation Law and the PSC set forth the
operations either directly or through an entity partially or
main rules for tax assessment, notably that losses carry
totally owned by the State. The State’s participation shall
forward, and rules on deduction and depreciation of costs
be in accordance with the conditions to be established
for tax purposes.
under the relevant PSC or prospecting licence.
Government tax take is obtained through a royalty of 2%
over the daily production. Is there any mechanism for recovery of carry
costs?
Taxable income (income received in connection with the oil
activities) is subject to 30% corporate income tax. Provisions in relation to carrying costs and their recovery
are agreed and included in each PSC.
Arrangements for the split of profit oil is established in the
PSC. The PSC Model establishes a possibility for the recovery of
carry costs through profit oil.
Government for an interest in a Licence in your Does the Government have any right to participate
country. Please include details of cost and timing in the operatorship of the Licence?
for obtaining such interest. The Government has the right to participate in any phase
The Government establishes, by decree and following of the petroleum operations in accordance with the terms
consultation with ANP-STP and any other relevant and conditions set forth in the licence and negotiated with
Government bodies, the areas where petroleum operations the licensee.
may be conducted. Areas are divided into blocks by ANP-
STP.
Assignment
Applications for prospecting licences in respect of a
specific area shall be submitted to ANP-STP together with What Government and/or regulatory approvals are
all relevant documentation as detailed in the Petroleum required for the acquisition of oil and gas interests
Law. held under a Licence (whether by asset or
corporate sale/ change of control)?
ANP-STP reviews the prospecting licence applications and
recommends to the Government which applicants should If any, what are the timing requirements and costs
receive Licences. The prospecting licences are, after of obtaining such Government and/or regulatory
approval, published in the Official Gazette. approvals?
ANP-STP issues public notices for open bids for petroleum The prior approval of ANP-STP is required for any
contracts. Direct negotiation may nevertheless be adopted assignment of interests, assets or obligations relating to a
in certain circumstances. After the award, negotiations Licence or interest, as well as for any acts, which cause a
shall be conducted with the ANP-STP for final approval change of control of the company (except if resulting from
from the Government. an acquisition of shares or securities in a recognised stock
exchange market).
Licence? Such requirement for approval and its conditions will be
detailed in either the Licence or the petroleum contract.
Prospection licences are granted for a period of three (3)
years and renewable annually up to a period of six (6) Are there any pre-emptive rights reserved to any
years. Government entities in the event of a proposed
According to the PSC Model. the duration of a PSC is assignment of an interest held under a Licence? If
twenty eight (28) years – eight (8) years for exploration and so, what are the terms upon which such entities are
twenty (20) years for production which can be renewed for allowed to acquire the interest?
a period and terms to be agreed upon by negotiation. Under the PSC Model, the Government has a preference
The duration of RSCs are agreed between the parties. right in the event of assignment. Local companies have the
right of preference regarding the award of participating
interests and provision of services and goods contracts.
80
Economic support Abandonment and
Are parental guarantees or other economic Decommissioning
and gas companies?
Petroleum contract holders shall provide the Government Are security deposits required in respect of future
with all guarantees and assurances required under the decommissioning liabilities?
terms of the licence or petroleum contract for the A decommissioning plan shall be prepared and delivered to
performance of their work and financial obligations. the ANP-STP: (i) six (6) years prior to the commencement
Under the PSC Model, a performance guarantee and/or of the decommissioning operations; (ii) at the date on
parent company guarantee may be required. which 50% of the recoverable petroleum has been
produced; or (iii) one (1) year prior to termination of the
Any applicant for authorisation must evidence that it has Licence or the proposed date for decommissioning.
the financial, technical and legal capacity to perform
petroleum activities for which it requires the authorisation. A reserve fund shall be established to cover future
decommissioning costs.
Please see above.
81
Senegal
Conducting oil and gas activities in Senegal
― The Société des Pétroles du Sénégal (‘PETROSEN’)

Laws and regulations the national company for oil operations, established in
List the main legislation governing petroleum 1981.
The main legislation relating to petroleum activities is Law Entry requirements

no. 98-05 dated 8 January 1998, as amended by Law no.
2012-32 dated 31 December 2012, and implementing What are the registration requirements for
decree no. 98-810 dated 6 October 1998, (the ‘Petroleum becoming a licensee of an oil and gas production
Code’). sharing contract/licence/concession (‘Licence’) in
Due to the general nature of the Petroleum Code, most of
and production are included in petroleum contracts According to the Petroleum Code, any contractor carrying
(‘Petroleum Contracts’). out petroleum activities in Senegal is required to hold a
Petroleum Contract. Contractors may operate through a
local subsidiary for the whole duration of the Petroleum
Harmonisation of Business Law in Africa (Organisation
Contract or through a branch.
pour l’Harmonisation en Afrique du Droit des Affaires or
‘OHADA’), of which Senegal is a Member State, apply to Pursuant to the OHADA Companies Act which is directly
companies carrying out oil and gas activities in Senegal, applicable in Senegal, any foreign company having
especially the OHADA Companies Act. registered a branch must transform such branch into a
local company after a maximum of 4 years (i.e. an initial 2
Oil and gas activities are subject to exchange control
year period, renewable once for a further 2 years).
regulations applicable within the West African Economic
and Monetary Union (‘WAEMU’) and the Economic Are there any foreign investment approval
Community of West African States (‘ECOWAS’). requirements or restrictions when commencing
regulating oil and gas activities. There is no limitation on foreign investment in the
The main institutions of the Senegalese hydrocarbons
equally.
sector include:
Foreign direct investments need only be declared to the
― Ministry of Energy (Ministère de l’Energie or ‘ME’);
Ministry of Economy and Finance in order to allow
― Department of Hydrocarbons (Direction des dividends and other income from the investment to be
Hydrocarbures et des Combustibles Domestiques or expatriated.
‘DGH’), acting under the supervision of the ME, is the
Government authority primarily responsible for the
development and regulation of the oil and gas industry
in Senegal;
― Giving preference to local companies for construction,
― National Council of Hydrocarbons (Comité National
supply and services contracts, provided they offer
des Hydrocarbures or ‘CNH’) advises the Government
equivalent conditions of quality, price, quantity and
on questions regarding the hydrocarbons sector and
delay;
regulates petroleum prices; and
― Hiring priority skilled local employees; and
82
― Establishing an annual training programme for local Transfer or disposal to third parties of the rights and
employees. obligations arising from authorisations or permits is subject
Senegal
to prior approval of the ME.
These local content obligations apply to both contractors
and sub-contractors. The Petroleum Code refers to the following 4 types of
― Exploration contract (conventios attachée à l’octroi

Licensing
d’un permis de recherche) under which the contractor
Identify the main fiscal/legal model granting rights is granted an exclusive right to perform exploration
to explore and produce oil and gas. works in the surface area covered by an exploration
permit. An exploration contract is granted for an initial
Legal period of up to 4 years with two to three renewal
Contractors require authorisation from the Government to periods of up to 3 years each;
carry out oil and gas activities, the terms of which are ― Concession contract (concession d’exploitation
included within a Petroleum Contract between the d’hydrocarbures) confers exclusive rights and
contractor and the Government. Details of the relevant obligations to conduct those oil operations that are
authorisations are as follows: defined within the contract. Concession holders
― Non-exclusive prospecting authorisation assume all financial and operating risks and may
(autorisation de prospection d’hydrocarbures) which dispose of the production in accordance with the
entitles the holder to perform preliminary surface terms of the contract. The concession contract is
prospecting works on a non-exclusive basis. Results granted for an initial period of 25 years with the
must be disclosed to the ME. The prospecting period possibility of a single 10 year renewal;
is fixed at a maximum of 2 years. The prospecting ― Exploration and production service contract
authorisation does not confer any preferential right to (contrat de services à risques de recherche et
a Petroleum Contract for the contractor; d’exploitation d’hydrocarbures) under which the
― Exclusive exploration permit (permis de recherche Government grants an exclusive exploration right and,
d’hydrocarbures) which entitles the holder to perform in case of a discovery, an exclusive right of
exploration works. This permit is granted for an initial production. The holder is not entitled to a portion of
period of up to 4 years with two to three renewal the production but is remunerated in cash for its
periods of up to 3 years each permitted. Each election exploration and production services; and
to renewal is accompanied by a requirement to ― Production sharing contract (contrat de partage de
relinquish a portion of the surface area. Results must production) under which the Government grants an
be disclosed to the ME. In the event of a proven exclusive exploration right and, in case of a discovery,
commercial discovery, the contractor is entitled to an exclusive right of production. The contractor
apply for a production concession. Where a potentially assumes financial and operating risks. Production is
commercial discovery is made, contractors may be shared with the Government in accordance with the
granted a retention period not exceeding 3 years for contract.
liquid hydrocarbons and 8 years for gaseous
hydrocarbons; Petroleum Contracts are all negotiated with the ME and
contain all dispositions applicable to the relevant
― Exclusive interim production authorisation exploration and/or production phase, including:
(autorisation d’exploitation provisoire) under which an
existing exploration permit holder may be granted an ― Duration of the contract and the relevant
interim production right for a maximum of 2 years authorisations or permits including renewal periods
within the exploration period; and and relinquished areas;
― Production concession (concession d’exploitation ― Exploration work commitments and the relevant
d’hydrocarbures) under which the holder is entitled to securities relating to those commitments;
perform petroleum activities as defined in the ― Exploration and production conditions;
concession contract. The concession is granted for an
initial period of 25 years with the possibility of a single ― Situations relating to cancellation of an exploration
10 year renewal. permit or withdrawal of a production concession;
― Tax and financial provisions (as approved by the

Ministry of Economy and Finance);
83
― Local preference and local training commitments; contracts or production sharing contracts are subject
to an additional petroleum tax based on the
―
Senegal
Restrictions on transfer and assignment;

profitability of the petroleum operations covered by the
― State participation provisions; relevant contract;
― Obligations on the contractor to disclose information, ― Profit oil and cost oil: profit oil and cost oil are
documents and samples to the ME; negotiated in the production sharing contract.
Production costs are recoverable from cost oil;
― Production ownership and sharing;
― Transfer of facilities, equipment and land to the
on profits at the rate of 30%;
Government on termination or expiration;
― VAT: VAT is due at a rate of 18%;
― Abandonment measures and environmental
provisions including environmental management ― Customs: WAEMU and ECOWAS applies the
plans; and customs rates specified in the community regulations
and a common external tariff is generally applicable to
― Stability, applicable law and dispute resolution
imports and exports from and to Senegal. Imports
clauses.
exclusively related to prospecting and exploration are
A model contract is provided by the Government to serve exempted from customs duties. A temporary regime
as a basis for negotiations. applies to imports related to production. Exports of
petroleum products are not subject to export duties;
Petroleum Contracts must be signed by the ME (and
and
approved by the Ministry of Economy and Finance with
respect to tax and financial provisions) and approved by ― Stamp duties: stamp duties apply to petroleum
the President of the Republic of Senegal. Concluded companies.
Petroleum Contracts are published in the Official Gazette.
In addition to the above, a Petroleum Contract may offer
Transfer or disposal of the rights and obligations arising specific tax incentives to the contractor.
from Petroleum Contracts are also subject to prior approval
Contractors may have obligations to supply the domestic
of the ME. Approval is deemed granted where no response
market a defined portion of their production, the level of
to the request for approval is received within 60 days of its
which will be defined in the Petroleum Contract.
filing.
Fiscal Please outline the procedure to apply to the

Contractors are subject to taxes and other contributions country. Please include details of cost and timing
under the General Tax Code, the Petroleum Code and the for obtaining such interest.
relevant Petroleum Contract, including:
Access to the petroleum sector in Senegal is granted to
― Surface area royalty: an annual surface area royalty companies having the required technical and financial
is due as set out in the production sharing contract or capabilities. Block awarding is decided by the Government
in the exploration and production service contract; on a discretionary basis either by tender procedure or by
― Production royalty: concession contract holders are direct negotiations with the ME.
subject to a royalty on the value of the forecast total of Before being signed by the ME, a Petroleum Contract must
hydrocarbons produced as set out in the concession be approved by the Ministry of Economy and Finance with
contract. The production royalty is to be paid in cash respect to tax and financial provisions. Approval is deemed
at rates determined as follows: granted where no response to the request for approval is
(a) Liquid hydrocarbons exploited onshore: 2% to received within 15 days of its filing.
10%;
(b) Liquid hydrocarbons exploited offshore: 2% to Licence?
8%; and
See the ‘Legal’ section above for details of durations for
(c) Gaseous hydrocarbons exploited onshore or the relevant Licences.
offshore: 2% to 6%.
― Additional petroleum tax: holders of exploration

contracts, exploration and production service
84
Does the Government have any right to participate the Government may, however, be negotiated in the
and be carried in the Licence? If so, please describe Petroleum Contract.
Senegal
Is there any mechanism for recovery of carry Economic support

costs?
The Government may, pursuant to the terms of the
relevant Petroleum Contract, participate directly or through
and gas companies?
Government owned entities in petroleum operations. The
Petroleum Code does not include any minimum rate The Petroleum Code does not require a parent company
regarding Government participation in the company guarantee where one or several of the companies forming
applying for or holding a Petroleum Contract. the contractor entity are subsidiaries of an oil company.
However such guarantee may be negotiated in the
Any mechanism for the Government’s costs to be carried
Petroleum Contract.
and the mechanism for recovering those costs will be set
out in the Petroleum Contract. Security interests to be provided will be governed by the
provisions of the OHADA Uniform Act organising
Does the Government have any right to participate securities, applicable in Senegal.
As above, the Government may participate directly or
through Government owned entities in petroleum
operations. During the exploration period, securities in respect of work
commitments are required by the Petroleum Code to be
included in the Petroleum Contract.
Assignment
What Government and/or regulatory approvals are Abandonment and
held under a Licence (whether by asset or Decommissioning
approvals?
Transfer or disposal of the rights and obligations arising
rehabilitation obligations to be included in the Petroleum
from Petroleum Contracts and authorisations or permits is
Contract.
subject to notification to and prior approval of the ME.
Approval is deemed to be granted where no response to The terms relating to the transfer of facilities, equipment
the request for approval is received within 60 days of its and lands to the Government may be set out in the
filing. Petroleum Contract.
The Petroleum Code is silent on the issue of change of In addition, the Petroleum Code provides for the obligation
control and corporate sales. to include environmental provisions, in particular
environmental management plans, in the Petroleum
Are there any pre-emptive rights reserved to any Contract.
The Petroleum Code does not provide the Government

with a pre-emptive right. A right of pre-emption in favour of
85
Sierra Leone
Conducting oil and gas activities in Sierra Leone

The main legislation governing petroleum exploration and Other than as stated above, there are no foreign approval
production activity in Sierra Leone is the Petroleum requirements or restrictions when commencing business in
(Exploration and Production) Act 2011 as amended by The Sierra Leone. Foreign direct investment in Sierra Leone is
Petroleum (Exploration and Production) Act No. 2 of 2014 actively promoted through statutory instruments such as
(the “Act”). the Investment Promotion Act No. 10 of 2004, the Sierra
Leone Import Regulations and the Companies Act, among
Identify the Government, regulatory and/or others. A company may have all 100% of its shareholding
oversight bodies principally responsible for held by a non-national.
The Petroleum Directorate (the “Directorate”) is the

regulatory and oversight body principally responsible for
Licensing
regulating the oil and gas industry in Sierra Leone. It is
created by the Act. The Petroleum Minister (the “Minister”)
is responsible for the management of petroleum matters
and, until the establishment of a ministry with responsibility Legal
for petroleum matters, the person appointed by the H.E.
Section 2(1) of the Act vests all rights of ownership and
the President of Sierra Leone in this regard is responsible
control of petroleum (i.e. crude oil or natural gas or a
for overseeing the administration of the Act and all aspects
combination of both) in its natural state in, under or upon
of the general management of petroleum resources and
any land of Sierra Leone, in the Republic of Sierra Leone.
the administration of the Act. The Minister is empowered
Licences follow a standard format and otherwise are the
by the Act to give directives in writing to the Directorate
product of negotiations between the Licensee and the
with regards to policy to be observed and implemented by
Government of Sierra Leone (the “Government”). The
the Directorate and the Directorate is required to comply
Licence will contain detailed provisions including
with such directives.
regulatory, development and production provisions
captured in the clauses found in the model petroleum
agreement which is the working and foundation document
Entry requirements for negotiations. These clauses are set out under the Act.
What are the registration requirements for The Act takes precedence over all existing enactments
becoming a licensee of an oil and gas production relating to petroleum in Sierra Leone. Where there is a
sharing contract/licence/concession (‘Licence’) in conflict between the provision of the Act and any
your country? For instance, is it necessary to agreement made under the Act, the provisions of the Act
incorporate a subsidiary, or register a branch? shall prevail unless otherwise agreed in writing by the
parties to the agreement. The Minister may by statutory
No petroleum Licence shall be granted to an individual or a instrument make regulations for giving effect to the
company which is not registered or incorporated under the provisions of the Act and for its due administration. Any
Companies Act No. 5 of 2009 of the Laws of Sierra Leone dispute arising between the State of Sierra Leone and a
(as amended) (the “Companies Act”) as a body corporate holder of a petroleum right in relation to or in connection
or as a registered branch of an overseas company. with or arising out of any terms and conditions of a
petroleum right shall be resolved by consultation and
negotiation. Where an application is successful, the
86
Sierra Leone
Licence shall, among others, include terms governing the Details of costs and timing
resolution of disputes in the event that no agreement is
The details of costs are not provided in the Act but rather
reached after consultation and negotiation. This may
by regulations or in the official tender document issued by
provide for arbitration as provided in the Licence.
the Directorate. In the call for tender for the third licensing
Fiscal bid round of 2012 they were as follows:
The agreement that will be entered into between a ― Application fees of US$25,000.00 per oil block upon
successful company and the Government is a hybrid submission of application. The fees may be adjusted
royalty-tax agreement. The Government obtains revenue periodically by regulation to retain their real values
from the oil and gas sector by subjecting it to the following: and this may involve index linking the fees for inflation.
― Royalty Rate: Royalty based on total production. ― Where the application is successful and this leads to
the award of a Licence, a surface rent per annum of:
― Income Tax: Income tax will be the main source of
the Government’s fiscal take from a profitable project. (a) (US$40.00 per Sq. Km for the initial exploration
The rate of income tax is fixed in the Income Tax Act phase;
2000 as amended. Income tax is ring fenced on a
(b) US$60.00 per Sq.Km for the first extension
licence area basis. It allows a carry forward of tax
period;
losses. A loss in any year of assessment may be
carried forward as a deduction against income of the (c) US$85.00 per Sq.Km for the second extension
subsequent year of assessment. Exploration period; and
expenditures are expensed (i.e. 100% write-off) and
(d) US$110 per Sq.Km for the development and
development expenditures are depreciated at 40%,
production phase.
20%, 20%, 20% over four years but beginning in the
year of commencement of commercial production. Per section 89 of the Act, every licensee shall pay into the
Training, Research and Development Fund, and annual
― Petroleum Resource Rent Tax (PRRT): The fiscal
training, research and development fees as may be
regime includes Petroleum Resource Rent Tax
provided in the Licence. In the 2012 tender document
(“PRRT”) as a progressive tax instrument. The PRRT
referred to above it was stated that all companies must pay
has a legislative basis (both in the Act and Income
an annual training fund fee of US$200,000.00 per annum.
Tax Act 2000). PRRT is ring-fenced on a licence area
basis. On the issue of timing and judging from the 2012 third bid
rounds, other licensing bid rounds and the prequalified
― Capital Gains Tax: The Income Tax Act 2000
selective award process, there is a 3 to 4 month period
provides for taxation of any premium received by the
from the date of submission of application to an award
assignor in the assignment of any participating interest
decision. Other factors such as size of the bid round, the
in a petroleum Licence. The current rate of capital
financial, technical and other expertise of the applicant
gains tax is 30%.
(such as its establishment within the industry) may well see
Please outline the procedure to apply to the this time shortened. Where an application is successful,
Government for an interest in a Licence in your the Act requires the Director General of the Directorate to
country. publish a summary of each Licence and any accompanying
agreement between the State of Sierra Leone and the
Please include details of cost and timing for licensee in the Sierra Leone Gazette. The Director General
obtaining such interest. of the Directorate shall also deliver a Licence granted
under the Act to the Registrar-General of Sierra Leone for
Applications for a Licence can be made in the following
registration in the registry of the Registrar-General for such
circumstances:
purpose.
― prequalification; or
― through a call for tenders. Licence?
All applications are made in a prescribed form and A Licence granted under the Act shall be valid for a
applicants are subject to the entry requirements as stated maximum period of 30 years from the effective date unless
in the Act. sooner cancelled or terminated as provided under the Act.
The Licence comprises an exploration period and
production period respectively. An exploration period shall
87
Sierra Leone
last for a maximum of 7 years which shall be divided into sale or transfer includes assignment by sale or transfer of
an initial period of 3 years, a first extension period and a shareholding of a company and other ownership shares
second extension period of up to 2 years each. The which gives control of the holder of the petroleum right to a
exploration period shall commence on the effective date of third party or affiliate. As to timings and costs, see below.
the Licence. A Licence granted by the Minister becomes
valid and binding on the parties only after ratification by the Are there any pre-emptive rights reserved to any
Parliament of Sierra Leone. By domestication of the Government entities in the event of a proposed
Licence through ratification, it is promulgated into an Act of assignment of an interest held under a Licence?
Parliament.
If so, what are the terms upon which such entities
Does the Government have any right to participate are allowed to acquire the interest?
and be carried in the Licence? If so, please describe The Act requires that a Licence shall provide that a
the extent of this entitlement. licensee wishing to assign, sell or transfer its interest,
whether in whole or in part, shall give the right of first
refusal to the State of Sierra Leone to acquire the interest
costs?
at the same price as agreed with a potential purchaser. A
The State may participate as a licensee with a specific transfer may be made only to a prequalified company and
participating interest in a Licence under the auspices of the where the Minister is satisfied on the advice of the
State National Oil Company (the “SNOC”). The Act makes Directorate that all obligations of the transferor which had
provision for the SNOC to be able to acquire a participation not been fulfilled at the time of the transfer are undertaken
interest on a standalone and commercial basis and/or hold by the transferee. Any such transfer or assignment is
the participation interest on behalf of the Government. The subject to the approval of the Minster on a number of
SNOC shall have all the rights and obligations of a licensee issues including: (a) the licensee’s ownership right to fixed
under the Act and the joint operating agreements to which facilities; (b) mortgage in a fixed facility subject to private
it is a party. Where the State elects to participate in a property rights; (c) and the payment of fees. Any such
Licence, it shall have an initial carried interest of at least transfer and or assignment may be subject to such
ten percent and may acquire an additional paying interest handling fees as the Minister may prescribe. The required
up to a declared maximum within a specified period of time approval of the Minister in the event of an application for
from the date a discovery is declared to be a commercial transfer and or assignment shall not be unreasonably
discovery. A petroleum Licence shall provide that a withheld. Notice of an approved transfer and any fee
licensee wishing to assign, sell or transfer its interest collected by the Government shall be published in the
whether in part or in whole shall give the right of first Sierra Leone Gazette and in such other manner as may be
refusal to the State to acquire the interest at the same price determined by the Minister.
as agreed with a potential purchaser.
The Act does not give indication as to timing requirements
Does the Government have any right to participate and costs for obtaining Government and/or regulatory
in the operatorship of the Licence? approvals. However, current guidelines state:
See above. ― During any exploration period, in the event that a

licensee assigns, in whole or in part, any of its rights,
privileges, duties and obligations to any assignee
Assignment other than an affiliate of the same licensee, the
licensee shall pay to the Directorate an assignment
What Government and/or regulatory approvals are fee of US$1,000,000;
― During any development or production period, in the
event that the licensee assigns, in whole or in part,
any of its rights, privileges, duties and obligations to
If any, what are the timing requirements and costs any assignee other than an affiliate of the same
of obtaining such Government and/or regulatory licensee, the licensee shall pay to the Directorate an
approvals? assignment Fee of US$2,000,000; and
A licensee is prohibited from directly or indirectly assigning ― In the event of an assignment to an affiliate of any of
its participating interest in a petroleum right whether in the entities constituting the licensee during any
whole or in part to a third party or affiliate without the prior exploration or development phase, the licensee shall
written approval of the Minister. An indirect assignment,
88
Sierra Leone
pay to the Directorate an assignment fee of declaration of commerciality by a licensee and its
US$500,000. consequent approval by the Minister, the licensee shall
prepare and submit a detailed plan for development and
operation of the petroleum field to the Minister for approval.
Economic Support The plan shall also include a preliminary plan for end of
production, decommissioning and disposal of facilities.
supports commonly required to be provided by oil Within not less than 90 days prior to the surrender or
and gas companies? revocation of a Licence and before petroleum operations
on a facility are permanently terminated, the licensee shall
No parental guarantee or other economic support is submit the decommissioning plan for the prior written
required to be provided by oil and gas companies by the approval by the Minister on the advice of the Directorate.
Act. However, within 60 days of the effective date of a
Licence and in a form approved by the Minister, the No security deposits are required in respect of future
licensee is required by the Act to provide the Minister with decommissioning liabilities. However, a Decommissioning
a guarantee for fulfilment of the minimum exploration Fund (to be used only for decommissioning) shall be
programme during the initial exploration period. Upon the established by the Minister after consultation with the
expiration of the exploration period and within 60 days of Minister responsible for Finance in Sierra Leone. The
the date upon which the first or second extension period Minister and the licensee shall agree upon the amount of
commences, the licensee shall provide the Minster with a the Decommissioning Fund necessary to fund activities
guarantee for the fulfilment of the minimum exploration under the approved decommissioning plan and the manner
work programme during the first and second extension and time in which the licensee shall make contributions to
period or for any further extension as the case may be. The the Decommissioning Fund but the first contribution shall
quantum of each guarantee shall be equivalent to the not be made prior to the commencement of production.
estimated costs of the minimum exploration work
programme for such period and the guarantee shall remain
in effect for the duration of the stipulated period.

See above
Abandonment and
Decommissioning

The Directorate is the body charged with regulating the

decommissioning of oil and gas facilities. On the
89
Togo
Conducting oil and gas activities in Togo

Law No. 99-003 dated 24 February 1999 relating to the
Hydrocarbon Code (the “Hydrocarbon Code”) governs
exploration, production and the trade of oil and gas in the
Togolese Republic. In Togo, a License can only be granted to an petroleum
company. Any company must be registered in Togo to
Additionally, the following legislation governs activity in
become a licensee. Foreign companies should provide
exploration, production and trading:
evidence of a permanent establishment in the Togolese
― Decree No. 2002/029/PR dated 2 April 2002 creating Republic for the duration of their License. For this purpose,
the automatic adjustment mechanism of prices for they should incorporate a Togolese subsidiary or register a
petroleum products; Togolese branch.
― Inter-Ministerial Order No. 39-MCT-MEF dated 9 Are there any foreign investment approval
August 1991 prohibiting the import, storage and requirements or restrictions when commencing
marketing of petroleum products by unauthorized business in your country (e.g. a minimum local
economic operators; shareholding in the entity undertaking the activity)?
― Law No. 2008-005 dated 30 May 2008 relating to the There is no particular provision regarding a minimum local
framework law on the environment; shareholding in the entity undertaking the activity.
― Decree No. 2011-041/PR dated 16 May 2011 laying
down the procedures for implementing the
environmental audit; Licensing
― Decree No. 2006-058/PR dated 15 July 2016 laying Identify the main fiscal/legal model granting rights
down the list of works, activities and planning to explore and produce oil and gas.
documents subject to the environmental impact
Legal
assessment and the main rules for such assessment.
According to the Hydrocarbon Code, the prospecting,
Identify the Government, regulatory and/or research, development, exploitation, refining and
oversight bodies principally responsible for transportation of oil and gas in Togo are subject to the
regulating oil and gas activities. requirement to obtain permits. Authorizations, permits and
The Ministry of Mines and Energy and the Department of licenses are granted by Decree.
Hydrocarbons are the government authorities primarily In order to carry out oil research and exploitation activities,
responsible for the regulation of the oil and gas activities in it is required to conclude an agreement permitting such
the Togolese Republic. activities with the Government.
Fiscal
As a general matter, contracts granting rights for

exploitation of hydrocarbons are subject to registration
duties at a rate of 2% of the value of the contracts.
90
Contracts for the supply of hydrocarbons are subject to a Does the Government have any right to participate
1% registration duty. in the operatorship of the Licence?
Research and exploration agreements are also subject to The Government has the right to participate in the
Togo
an annual land royalty and monthly royalty proportional to operatorship of the Licence.
production, the value and terms of which will be detailed in
the relevant agreements.
Assignment
Profits earned by companies involved in activities relating
to research, exploitation, production and sale of What Government and/or regulatory approvals are
hydrocarbons, including transportation within Togo, are required for the acquisition of oil and gas interests
subject to corporate tax at 28%. As a general matter, held under a Licence (whether by asset or
companies involved in activities relating to research, corporate sale/ change of control)?
exploitation, production and sale of hydrocarbons are
subject to the ordinary tax system, unless the petroleum If any, what are the timing requirements and costs
contract provides for any tax exemptions. of obtaining such Government and/or regulatory
approvals?
Government for an interest in a Licence in your The prior approval of the Government is required for any
country. Please include details of cost and timing assignment of interests, assets or obligations relating to
for obtaining such interest. the oil activities of the company, as well as for any acts,
which cause a change of control of the company. Such
In Togo, the Licenses are granted by decree through a requirement for approval and its conditions can be detailed
public invitation to tender. Details on costs and timing to in either the License or the petroleum contract.
obtain such an interest are not readily available from the
Ministry of Hydrocarbons. Are there any pre-emptive rights reserved to any
What is the customary duration of the relevant assignment of an interest held under a Licence? If
Licence? so, what are the terms upon which such entities are
There are 3 (three) types of hydrocarbon license in Togo; allowed to acquire the interest?
the prospection permit, the exploration permit and the There are no pre-emptive rights reserved to the
exploitation concession. Government or any public bodies following the provisions
― The prospection permit is granted for a period of two of the Hydrocarbon Code. Such right, however, can be
(2) years and renewable twice for a period of up to included in the License or the petroleum contract.
one (1) year.
― The exploration permit is granted for a period of three Economic support

(3) years and renewable twice for a period of up to two
(2) years. Are parental guarantees or other economic
The duration of an exploitation concession cannot exceed
and gas companies?
thirty (30) years which can be renewed for a period and
terms to be agreed upon by negotiation. The Government can require, from any applicant for
authorization for a petroleum title, a bond (a deposit) or
Does the Government have any right to participate other undertaking in order to secure the performance of its
and be carried in the Licence? If so, please describe obligations.
Any applicant for authorization must prove that it has the
Is there any mechanism for recovery of carry financial, technical and legal capacity to perform petroleum
costs? activities for which it requires the authorization.
The Government has the right to participate in the research Are security deposits required in respect of work
and exploitation activities with the license holder through commitments or otherwise?
an exploitation concession or through another petroleum
contract. As above.
Provisions in relation to carrying costs and their recovery

are agreed in the relevant petroleum contract.
91
Abandonment and
Decommissioning
Togo

The abandonment regime is stated in the provisions of the

petroleum contract.
92
Uganda
Conducting oil and gas activities in Uganda
agreement (‘PSA’) to be used by the Minister. The

Laws and regulations Minister must also seek the approval of the Cabinet
List the main legislation governing petroleum before: (i) opening an area for petroleum exploration;
exploration and production activity in your country. (ii) granting an exploration licence; or (iii) granting a
production licence.
The relevant legislation governing petroleum exploration
and production activities in Uganda is as follows:
― The Petroleum (Exploration, Development and

Entry requirements
Production) Act, 2013 (the ‘Upstream Act’).
― The Petroleum (Exploration and Production) (Conduct becoming a licensee of an oil and gas production
of Exploration Operations) Regulations, S.I. 150-1 (the sharing contract/licence/concession (‘Licence’) in
‘Petroleum Regulations’). your country? For instance, is it necessary to
oversight bodies principally responsible for There is no requirement under the Upstream Act for a
regulating oil and gas activities. licensee to incorporate a subsidiary or register a branch in
Uganda. It is necessary, however, to incorporate a
― The Minister of Energy and Mineral Development (the subsidiary or register a branch if a foreign entity intends to
‘Minister’) is responsible for, inter alia, granting and set up physical premises or engage employees.
revoking licences, initiating, developing and
implementing oil and gas policy, submitting draft Are there any foreign investment approval
legislation to Parliament and negotiating and requirements or restrictions when commencing
endorsing petroleum agreements. business in your country (e.g. a minimum local
― The petroleum sector policy objectives of the Ministry
of Energy and Mineral Development are carried out by There is a requirement to obtain an investment licence
the Petroleum Production and Exploration Department under the Investment Code Act (Cap 92).
(the ‘Petroleum Authority’). The Petroleum Authority is
There are no minimum local shareholding requirements on
responsible for, inter alia, monitoring and regulating
holders of petroleum exploration and production licences.
petroleum activities including reserve estimation and
measurement of the produced oil and gas, reviewing
and approving any proposed exploration activity Licensing
contained in the annual work programme, appraisal
programme and production forecasts submitted by Identify the main fiscal/legal model granting rights
a licensee, reviewing and approving budgets submitted by
a licensee and assessing field development plans and Legal
making recommendations to the Minister for approval,
amendment or rejection of the plans. Under the Upstream Act, the property in and the control of
petroleum in its natural condition in or upon any land or
― The Parliament exercises an oversight function over waters in Uganda is vested in the Government on behalf of
the oil and gas sector. the Republic of Uganda. Rights to explore and produce oil
― The Cabinet, apart from having important roles in are granted through a PSA after which the relevant Licence
relation to the Petroleum Authority (such as approving is granted to the contractor which is issued in accordance
the remuneration of its board members), also with the terms provided in the PSA.
approves the model form production sharing
93
Fiscal field will only be deducted from income derived
from that contract area only. Losses arising from
― A contractor is subject to income tax in accordance
Uganda
activities in one contract area will only be carried

with the Income Tax Act, (Cap 340) (the ‘ITA’) and the
forward and offset against future income derived
PSA. Uganda has special provisions for taxation of
from petroleum operations of that contract area.
petroleum operations. These are incorporated in Part
IXA of the ITA. In summary the tax rules in Part IXA of (e) The rate of tax applicable to a contractor’s share
the ITA state that: of the profit oil is the standard corporation rate tax
of 30%.
(a) The gains taxable on petroleum companies are
those derived after taking account of petroleum ― Other forms of revenue under the Upstream Act and
sales (which should be determined at arm’s the PSAs include:
length) and claiming certain eligible expenses
(a) Royalty, the extent of which is included in the
such as:
PSA (there being no specific level stated in the
(i) cost of an asset or other exploration Upstream Act);
expenditure incurred in undertaking
(b) Annual fees including acreage rental and training
petroleum operations;
and research fees as may be prescribed in the
(ii) development and production expenditure; Petroleum Regulations;
(iii) any expenditure incurred in transportation (c) Signature bonus; and

facilities;
(d) Discovery bonus.
(iv) operating expenses;
(v) service costs; and Government for an interest in a Licence in your
(vi) general and administrative expenses (as country. Please include details of cost and timing
defined in the schedule to the ITA). for obtaining such interest.
Contractors are taxed on their share of the profit ― The Minister is required first to announce areas open
oil only. for bidding for an exploration licence by notice
published in the Gazette and a newspaper of national
(b) For the purpose of determining contractor’s gross and international circulation. The bidding process
income derived from petroleum operations from a must be carried out in a fair, open and competitive
contract area, petroleum is valued and measured manner in accordance with the Public Procurement
in accordance with the provisions of the and Disposal of Public Assets Act, 2003. In
petroleum agreement, subject to any further exceptional circumstances, the Minister is permitted to
procedures that may be agreed in writing receive direct applications for an exploration licence
between the Government and the contractor. including: (i) where there are no applications received
(c) Repatriation of profits by contractors: a in response to an invitation for bids for an area; (ii)
participation dividend paid by a resident applications in respect of areas that are adjacent to an
contractor to a non-resident company is liable to existing licensed reservoir; and (iii) promotion of
withholding tax at a rate of 15%. A lower rate of national interests.
withholding tax may apply if the dividend is paid ― Any party affected by the proposed exploration activity
to a resident of a country with whom Uganda has is given an opportunity to lodge, with the Minister, an
a favourable double taxation agreement. objection to the grant of the exploration licence,
(d) Contract areas are ring fenced for tax purposes. setting out the grounds of the objection.
Each contract area of a contractor is taxed as if it ― An application for an exploration licence must be
is a separate tax payer. Therefore this puts a submitted in writing and must: (i) contain the name of
limitation on consolidation of income and the body corporate, place of incorporation, the names
deductions for tax purposes across different and nationality of the directors, its share capital, and
activities or different projects undertaken by the the names of holders of more than five percent of the
same taxpayer. Tax deductible costs or issued share capital; (ii) identify the block or blocks in
expenditure incurred in respect of a contractor’s respect of which it is made (it should be in respect of
petroleum exploration and development not more than 10 blocks); (iii) be accompanied by a
expenditure in one contract area or block or oil statement giving particulars of work and the minimum
94
expenditure proposed for the blocks over which the ― Any other information that the applicant may deem
Licence is sought; (iv) give information on the financial necessary.
Uganda
status and the technical and industrial competence
and experience of the applicant; and (v) be What is the customary duration of the relevant
accompanied by a statement giving particulars of the Licence?
applicant’s proposals with respect to the employment An exploration licence, unless otherwise determined by
and training of citizens of Uganda. surrender or cancellation, shall remain in force for the
― The Minister is required, within 60 days of receipt of period stipulated in the Licence, which shall not exceed two
the application for the exploration licence, to confirm years after the date of the grant. It may be renewed for a
to the applicant in writing that its application is further period of two years, but the Licence shall not be
complete in all respects. renewed more than twice.
― The applicant shall be required: (i) to make A production licence shall remain in force for the period for
arrangements as may be satisfactory to the Minister which the application has been made but not exceeding 20
for the execution of a bond or other form of security for years from the date of the grant and for any period for
the performance and observance of the conditions to which the Licence is renewed under the Upstream Act.
which the Licence may be subject; and (ii) to take the
necessary insurance policies to protect against
liabilities that may arise as a result of activities done
under the exploration licence.
― The Minister is required to consult with the Petroleum Is there any mechanism for recovery of carry
Authority on an application and to process the costs?
application within 180 days of receipt of the The Upstream Act contains provision on the right of the
application. Government to participate in petroleum operations. It
― The Minister may grant the exploration licence after provides that the Government may participate in petroleum
consultation with the Petroleum Authority and with the activities through a specified participating interest of a
approval of the Cabinet. Licence or contract granted under the Upstream Act and in
the joint venture established by a joint operating agreement
― The application must be accompanied by a prescribed in accordance with the Licence and the Upstream Act. The
fee. The fees are to be prescribed in the Regulations Minister shall, with the approval of the Cabinet, specify the
made under the Upstream Act. Government share under this section.
The holder of an exploration licence who has made a
discovery of petroleum in an exploration area shall have
exclusive right to apply for the grant of a production licence
over any block or blocks in that area which, following Unless otherwise stated in the PSA, the Government does
appraisal, have been shown to contain a petroleum not have a right to participate in the operatorship of the
reservoir or part of a petroleum reservoir. Licence.
The application for a production licence must be made

within two years of the date on which the technical
Assignment
evaluation of test results was submitted to the Minister or
other period as may be stipulated in the PSA. The What Government and/or regulatory approvals are
application for grant of a production licence shall be made required for the acquisition of oil and gas interests
to the Minster in a prescribed form and must be held under a Licence (whether by asset or
accompanied by the prescribed fee. The application must corporate sale/change of control)?
also be accompanied by:
― A report on the petroleum reservoir;
― A field development plan; approvals?
― Any relevant information that the Minister may Under the Upstream Act, an exploration or production
reasonably require, including information relating to licence shall not be transferred without the written consent
alternative proposals for development and production of the Minister in consultation with the Petroleum Authority.
not included in the development plan; and
95
The requirement to obtain the Minister’s consent also
Abandonment and
applies to any direct or indirect transfer of interest or
Decommissioning
Uganda
participation in the Licence, including the assignment of

shareholdings and other ownership shares which may
provide decisive control of a licensee possessing a What abandonment regime is in place?
participating interest in a Licence. Control in relation to any
person is defined as the possession, directly or indirectly,
of the power to direct or cause the direction of the
management of the licensee by that person, whether The Upstream Act contains elaborate provisions on the
through the ownership of shares, voting, securities, decommissioning and abandonment process. A licensee is
partnership or other ownership or participation interests, required to submit a decommissioning plan to the
agreements or otherwise. Petroleum Authority before a licence to install and operate
facilities expires or is surrendered; or at the earliest four
The Upstream Act does not contain timing requirements
years but at the latest two years before the use of a facility
and costs of obtaining such regulatory approval. These are
is expected to be terminated permanently. A licensee is
to be prescribed under the Petroleum Regulations.
required to establish a decommissioning fund for each
Are there any pre-emptive rights reserved to any development area which must be applied to the
Government entities in the event of a proposed implementation of activities approved in the
assignment of an interest held under a Licence? If decommissioning plan.
so, what are the terms upon which such entities are Payments into the decommissioning fund must commence
allowed to acquire the interest? from the calendar quarter in which any of the following
Subject to the PSA, there are no pre-emptive rights situations occur:
reserved to the Government in the event of a proposed ― The petroleum production has reached 50% of the
assignment of an interest held under a Licence. aggregate recoverable reserves as determined in an
approved development plan and any subsequent
reappraisal of such initial recoverable reserves;
Economic support
― Five years before expiration of the Licence; or
― On notice of surrender.
and gas companies? For every subsequent calendar quarter in which petroleum
is produced or a facility operated, the Petroleum Authority
Under the Upstream Act, the Minister shall require an
is required to charge the licensee a proportion of the
applicant to make arrangements, as may be satisfactory to
estimated future cost for decommissioning of facilities to be
the Minister, for the execution of a bond or other form of
deposited in the fund.
security for the performance and observance of the
conditions to which the licence may be subject; and the The amount deposited in the decommissioning fund is
applicant is required to take the necessary insurance charged as operating costs subject to the cost recovery
policies to protect against liabilities that may arise. limitations stipulated in the PSA and/or the Regulations.
Since PSAs that have been signed by the Government are Further, the Petroleum Regulations provide that every
not available to the public we are unable to comment with exploratory well, whether a dry hole or a discovery, shall be
certainty on how commonly such guarantees are abandoned in a safe condition. The wells must be plugged
requested. with appropriate cement plugs, the wellhead removed and
a steel plate welded on the top of the casing. The location
Are security deposits required in respect of work of the abandoned well must be restored to the original site
commitments or otherwise? condition to the extent possible and must be marked with
Yes, as above. the well name and number in a manner approved by the
Minister.
96
Contributors
Angola Guinea
Filipa Lima Claudia Randrianavory

FTL Advogados Angola John W Ffooks & Co
Presidente Business Centre, Largo 17 Setembro 3 , 4th Immeuble Assist – 1er étage, Ivandry,
Floor, Room 408, Luanda, Angola Antananarivo 101, Madagascar
T +261 20 224 3247 T +261 20 224 3247

www.ftl-advogados.com www.jwflegal.com
Benin Libya
Tahirisoa Rakotonirina Fairuz Smew

John W Ffooks & Co Tumi Law Firm
Immeuble Assist – 1er étage, Ivandry, 190 Khaled Bin El Walid Street,
Antananarivo 101 Madagascar Dahra, PO Box 4444
Tripoli, Libya
T +261 20 224 3247
www.jwflegal.com T +218 4 333 2144
www.tumilawfirm.com
Egypt
Malawi
Girgis Abd El-Shahid and César R. Ternieden
Shahid Law Firm Savjani & Co
20 B Adly Street Hannover House
Cairo, Egypt P.O. Box 2790
Blantyre, Malawi
T +20 2 2393 5557
www.shahidlaw.com T: +265 1 824 555
E: savjaniandco@africa-online.net
Equatorial Guinea
Morocco
Adaku Ufere, Zion Adeoye and Cynthia Yav
Centurion Law Group Marc Veuillot and Francis McGowan
Malabo 11, Carretera entre CMS Bureau Francis Lefebre Maroc
Arab Contractors y SOGECO 7 rue Assilah,
Casa Centurion, Malabo Casablanca 20000, Maroc
T +(240) 222 161 809 T +212 5 22 22 86 86

www.centurionlawfirm.com www.cms-bfl.com
97
Mozambique Sierra Leone
Francisco Avillez Centus Macauley

ABCC Advogados Maputo Macauley, Bangura & Co
Avenida Kenneth Kaunda 660, Maputo, Moçambique 4th Floor, Airport Residential Area
31 Lightfoot Boston Street
T +258 823 056 088
Freetown, Sierra Leone
www.abcc.co.mz
T +232 22 228 936
Namibia
Togo
Irvin Titus
Koep and Partners Edem Zotchi
33 Schanzen Road, Windhoek, Martial Akakpo & Associes
Namibia 27, rue Khra (Ex rue Maréchal BUGEAUD), BP 62210,
Lome, Togo
T +264 61 382 800
www.koep.com.na T +228 22 21 57 20 / 22 20 73 56
www.scpmakakpo.com
Nigeria
Uganda
Ken Etim and Stella Duru
Banwo & Ighodalo Phillip Karugaba and Rehema Nakirya
98, Awolowo Road Masembe, Makubuya, Adriko, Karugaba and
South West Ikoyi Ssekatawa Advocates
Lagos, Nigeria 3rd Floor, DTB Centre, Plot 17/19 Kampala Road
P.O. Box 7166
T +01 461 52034
Kampala, Uganda
www.banwo-ighodalo.com
T +256 414 251388
Republic of Congo www.mmaks.co.ug
Fenosoa Rajomarison
John W Ffooks & Co
Immeuble Assist – 1er étage, Ivandry,
Antananarivo 101 Madagascar
T +261 20 224 3247

www.jwflegal.com
98
Contacts
Bob Palmer Ian Herbert

Partner, Oil & Gas / Africa Practice Partner, Oil & Gas
T +44 20 7367 3656 T +44 20 7367 2589
M +44 7831 248 814 M +44 7956 392 881
E bob.palmer@cms-cmno.com E ian.herbert@cms-cmno.com
Matthew Culver Jonathan Woolf

Partner, Oil & Gas (London/Dubai) Partner, Oil & Gas
T +44 20 7367 2979 T +44 20 7367 3094
M +44 7919 363 109 M +44 7786 027 952
E matthew.culver@cms-cmno.com E jonathan.woolf@cms-cmno.com
Andrew Shaw Richard Sinclair

Partner, Oil & Gas Partner, Oil &Gas
T +44 20 7367 2954 T +44 20 7367 3564
M +44 7515 787 216 M +44 7446 933 985
E andrew.shaw@cms-cmno.com E richard.sinclair@cms-cmno.com
Phillip Ashley Randall Walker

Partner, Oil & Gas Disputes Partner, Oil & Gas Disputes (Dubai)
T +44 20 7367 3728 T +971 4 374 2805
M +44 7841 899 225 M +971 50 354 8138
E andrew.shaw@cms-cmno.com E randall.walker@cms-cmno.com
Pamela Angell Mick McArdle

Senior Associate, Africa Practice Associate, Oil & Gas / Africa Practice
T +44 20 7367 3572 T +44 20 7367 3956
M +44 7595 122 648 M +44 7909 229 690
E pamela.angell@cms-cmno.com E mick.mcardle@cms-cmno.com
The information contained within this guide has been prepared during 2016 and 2017 and is accurate, so far as the authors are
aware, as of the date of this publication. With the sometimes fast moving nature of the development of the law and practice in
some jurisdictions across Africa, this guide may not be fully representative of changes in law after the date of its publication.
This guide should not be relied on or seen as a replacement for specific legal advice in relation to any planned entry into any of
the jurisdictions covered by it.
Please contact any of the contacts above in relation to any specific issues or perceived inaccuracies of this guide.
99
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member firms are separate and legally distinct entities, and no such entity has any authority to bind any
other. CMS EEIG and each member firm are liable only for their own acts or omissions and not those of
each other. The brand name “CMS” and the term “firm” are used to refer to some or all of the member
firms or their offices.
CMS locations:
Aberdeen, Algiers, Amsterdam, Antwerp, Barcelona, Beijing, Belgrade, Bogotá, Berlin, Bratislava, Bristol, Brussels,
Bucharest, Budapest, Casablanca, Cologne, Dubai, Dusseldorf, Edinburgh, Frankfurt, Geneva, Glasgow, Hamburg,
Hong Kong, Istanbul, Kyiv, Leipzig, Lima, Lisbon, Ljubljana, London, Luanda, Luxembourg, Lyon, Madrid, Manchester,
Medellín, Mexico City, Milan, Monaco, Moscow, Munich, Muscat, Paris, Podgorica, Poznań, Prague, Rio de Janeiro,
Reading, Riyadh, Rome, Santiago de Chile, Sarajevo, Seville, Shanghai, Sheffield, Singapore, Sofia, Strasbourg,
Stuttgart, Tehran, Utrecht, Vienna, Warsaw, Zagreb and Zurich.
–––––––––––––––––––––––––––––––––––––––––––––––––––––––
The content in this document is for general purposes and guidance only. It does not constitute legal or
professional advice and should not be relied on or treated as a substitute for specific advice relevant to particular
circumstances. For legal advice, please contact your main contact partner at the relevant CMS member firm.
cms.law
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Oil and Gas in Africa Brochure (606962576 - 3)

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Oil and Gas in Africa

Structured guides to market entry

Conducting Oil & Gas Activities in:

5. Democratic Republic of Congo ..................................................................................................................................... 16

7. Equatorial Guinea ......................................................................................................................................................... 24

10. Guinea .......................................................................................................................................................................... 37

11. Ivory Coast ................................................................................................................................................................... 41

12. Kenya ........................................................................................................................................................................... 46

13. Libya ............................................................................................................................................................................. 51

14. Malawi .......................................................................................................................................................................... 54

17. Mozambique ................................................................................................................................................................. 64

18. Namibia ........................................................................................................................................................................ 67

19. Nigeria .......................................................................................................................................................................... 71

20. Republic of Congo ........................................................................................................................................................ 75

21. São Tomé & Príncipe ................................................................................................................................................... 79

22. Senegal ........................................................................................................................................................................ 82

23. Sierra Leone ................................................................................................................................................................. 86

24. Togo ............................................................................................................................................................................. 90

25. Uganda ......................................................................................................................................................................... 93

Bob Palmer Mick McArdle

Jean-Jacques Lecat Tiago Machado Graça

Conducting oil and gas activities in Angola

Laws and regulations Are there any foreign investment approval

― Law 11/04 of 12 November (Petroleum Customs Law)

― Law No. 2/12 of January 13 (Law on the Foreign

The applicant will prove this by including in its Application: Assignment

assignment of an interest held under a Licence? If

At least one year prior to termination of the concession or

Identify the Government, regulatory and/or ― The granting of a prospecting authorisation;

― The granting of an authorisation for oil transportation

Licensing What is the customary duration of the relevant

What Government and/or regulatory approvals are

Conducting oil and gas activities in Cameroon

Laws and regulations Entry requirements

― Hiring, in priority, skilled local employees; and

― Financing and establishing training programmes for

― Concession Contract (contrat de concession

― Exclusive interim production authorisation ― Transportation rights;

― Stability, force majeure, and dispute resolution

In addition, the Petroleum Code provides for the obligation

Conducting oil and gas activities in Chad

Laws and regulations Entry requirements

― Prospecting authorisation (autorisation de ― Duration of the contract and the relevant

― Exploration authorisations: exploration permit under ― Tax and customs regime;

least 40% of profit oil.

Approval is deemed to be granted where no response to

Conducting oil and gas activities in

Laws and regulations

― COHYDRO (Société Nationale d’Hydrocarbures), the

― Exploration authorisation (droit d’exploration). An ― Bonuses: a bonus is due at:

― Service Contract (Contrat de services à risques ou (d) Zone D: 8%

related to petroleum operations are exempted from

(b) Zone B: 40% What Government and/or regulatory approvals are

Transfer of rights and obligations as well as authorisations

― completion of the minimum work programme by the

Economic support Are security deposits required in respect of future

Conducting oil and gas activities in Egypt

What are the registration requirements for

A contractor company may conduct geological

Legal Please outline the procedure to apply to the

etc. payable; (ii) that the intended assignee has the

A request for approval of an assignment must be submitted