We have obtained official confirmation that the new Hydrocarbons Code of the Republic of the Congo was approved by the Brazzaville-based Parliament on the last day of the summer parliamentary session, i.e. on August 13. We have also been advised that the Parliament introduced significant revisions in the draft law circulated back in 2015. Although the vast majority of the changes pertains to formal structure and wording of the Code, the most significant relate to: (i) the renegotiation of E&P contracts in the event of supervening circumstances, a possibility which is associated with the stabilization/grandfathering of the tax regimes specified in said contracts; (ii) local content requirements; (iii) the technical authorization which subcontractors are required to obtain before entering into subcontracts for the carrying-out of petroleum operations; (iv) the customs regime applicable to the re-exportation of goods imported duty free.
The Hydrocarbons Code describes the legal, tax, customs and foreign exchange regimes applicable to upstream operations, details the rights and obligations of the companies operating in the industry, and sets forth the rules and policies on health, safety, environment and local content. Much wider in scope than its 1994 predecessor, the new Hydrocarbons Code will trigger a comprehensive and in-depth revamping of the statutory regime still in force, even if some of the principles and standards defined therein require further elaboration in future regulations.
Under the Congolese Constitution, the President of the Republic will have a 15-day period to promulgate the Hydrocarbons Code, as from the approved statute being received at the Presidency, meaning that it should be formally enacted in the coming weeks.
The Hydrocarbons Code will be the legal cornerstone of the licensing round underway, the timetable for which remains unchanged. The closing date for submission of offers is still set for September 30, whilst the appraisal of bids and the announcement of results continue scheduled for the end of October.
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