ANPG TAKES OVER FROM SONANGOL E.P. AS ANGOLA'S NATIONAL CONCESSIONAIRE

Authors: Rebecca Major, Sharif Abousaada and Matthias Steiner

The Angolan government has taken a further step in restructuring the hydrocarbons sector in Angola with the creation of the National Agency for Oil, Gas and Biofuels (Agência Nacional de Petróleo, Gás e Biocombustíveis) ("ANPG"), which was approved by Presidential Decree (no.49/19) on 6 February 2019.

With the passing of the amendments to the 2004 Petroleum Activities Law on 18 April 2019 (Law no 5/19), ANPG has taken over from Sonangol E.P. the role of National Concessionaire, and exclusive holder of the mineral rights for oil & gas exploration and production. The Concessionaire's functions include the regulation, supervision and promotion of the execution of petroleum operations as well as hiring / procurement in the oil, gas and biofuels domains.

Sonangol E.P. will continue operating but its functions are now limited to carrying out prospection, research, production and related petrochemical activities.

The move forms part of the government's plan to ensure greater political coordination and decrease the risks of conflicts of interests, and to increase transparency and effectiveness, as well as creating suitable conditions for internal and external investment.

Practical Implications

As a matter of Angolan law, the interests previously held by Sonangol E.P. in its capacity as National Concessionaire in both on-shore and off-shore exploration and production blocks in Angola were transferred to ANPG on 18 April 2019.

However, the statute foresees an initial cooperation period between the ANPG and Sonangol E.P. in the assessment of human resources and assets currently held by Sonangol E.P. It is intended that within 120 days of the Presidential Decree (i.e. 6 June 2019) these resources will be correctly allocated amongst the two entities.

This 120-day deadline may prove to be an ambitious goal for such a fundamental administrative overhaul, and it is possible that it will be exceeded in this instance. The statute does not lay down any consequences in the event that the 120-day deadline is not met.

There is some uncertainty around the treatment of Sonangol E.P.'s contractual interests, not in its capacity as National Concessionaire but instead in its capacity as a petroleum exploration and production entity. Some commentators have argued that Law no. 5/19 of 18 April 2019 is less clear regarding the division of roles between Sonangol E.P. and ANPG in this respect.

We are recommending to our international clients that they to work closely with both Sonangol E.P. and ANPG during this transition period, particularly if they are in the middle of an award, transfer or renewal process.

For further information please contact Rebecca Major, Partner, Sharif Abousaada, Of Counsel, Matthias Steiner, Trainee Solicitor, or your usual Herbert Smith Freehills contact.