Page 6 - DMEA Week 44 2020

DMEA COMMENTARY DMEA

Local content in Angola

President João Lourenço has issued a decree outlining the new legal regime

governing local content in oil and gas projects

ANGOLA THIS article is the first in an occasional series of total investment in oil and gas projects flows
providing overviews of local content (LC) reg- into Angola itself, thereby helping to create
WHAT: ulations and requirements in individual African wealth and to diversify the national economy. It
Angola’s government states. also strives to expand the range of opportunities
has replaced the existing Angola’s government has taken another step available to local companies by requiring inter-
regulations adopted towards revamping the legal regime governing national oil companies (IOCs) to work with local
between 2003 and 2009. its oil and gas industry. More specifically, it has partners. Additionally, it encourages Angolan
approved a new law on local content require- entrepreneurs to take the steps needed to build
WHY: ments in the sector. local capacity by giving them more access to
Presidential Decree According to press reports, the new law is companies that need to hire contractors in order
271/20 defines Angolan known as Presidential Decree 271/20. It was to execute their projects.
companies more narrowly approved by President João Lourenço on Octo- The document makes these intentions clear.
than the earlier rules. ber 20, 2020, after around two years of discussion In it, President Lourenço states that his govern-
amongst officials in Luanda. The decree replaces ment wants Angolan commercial entities to
WHAT NEXT: the existing body of law governing local content, play a role in the development of the country’s
Some IOCs may object to which consists of the following: Order 127/03, oil and gas reserves. To this end, he says, the new
the changes, which will which took effect in November 2003, and eight legal regime encourages IOCs to obtain goods
limit the opportunities other measures approved between 2003 and and services from Angolan suppliers and to hire
open to JVs involving 2009. Angolan employees rather than expatriates.
Angolan and foreign To this end, Presidential Decree 271/20 pro-
investors. Similarities: strategy and goals vides for the government to continue the practice
Presidential Decree 271/20 is designed to serve of maintaining a register of Angolan companies
the same purposes as the previous regulations. that are ready and able to work with IOCs. It also
That is, it aims to ensure that a larger portion preserves the three-tier framework classifying

P6 www. NEWSBASE .com Week 44 05•November•2020