Presidential Decree No. 271/20, of 20 October 2020, has been published, approving the new Legal Framework on Local Content in the Oil Sector. The statute aims at promoting economic diversification, the participation of local businesses in the oil sector, the increase of domestic production, and the reduction of imports, as well as the creation of employment and the training of the Angolan workforce within the oil industry.

For this purpose, the statute establishes new rules on ‘Angolanization’ and procurement of goods and services applicable to the sector, which will have a significant impact on the activity of companies operating within the sector. Notable among these alterations is the priority given to the procurement of nationally-produced goods and services, especially the obligation to contract – exclusively or preferentially, depending on the case – Angolan companies included in the data base approved by the National Oil, Gas and Biofuels Agency (ANPG). In addition, all companies operating in any segment of the petroleum-sector value chain will be required to present an Annual Local Content Plan to the ANPG.

Failure to comply with the rules established in the new statute will imply the payment of fines varying between the corresponding amount in national currency of USD 50,000.00 (fifty thousand US dollars) and USD 300,000.00 (three hundred thousand US dollars). Additional penalties may also be applied, such as the interdiction of companies entering into new contracts and of engaging in their activity.

The Legal Framework on Local Content in the Oil Sector came into force on the date of its publication, revoking Order No. 127/03, of 25 November 2003.

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