Amendment to the Petroleum Activities Law

On April 18th 2019, the Law No. 5/19, which amends the Law on Petroleum Activities (Law no. 10/04
of 12th of November -"LAP") was published.
The main highlight of the new Law is the assignment of the role as the National Concessionaire to the National
Agency for Oil and Gas ("ANPG"), previously owned by SONANGOL, E.P. ("SONANGOL").
The ANPG is now the exclusive holder of the mining rights but a range of rights have notwithstanding been granted
to SONANGOL.
SONANGOL is granted special rights for any transmission of the contractual positions of the National Concessionaire associates’ at the current Oil and Gas concessions. Whenever a transfer is made to a nonaffiliated party of an Assignor, SONANGOL has been granted preemptive rights - rights previously established in favor of the National Concessionaire - therefore the same pre-emptive right has been assigned simultaneously to two entities. The question herein arising is whether or not such position results from the direct intention of Law maker as it’s foreseen that constraints on the practical articulation of these preemption rights will occur.
In the referred transmissions of contractual positions, SONANGOL, as long as able
to demonstrate technical and financial capacity, is also granted preemptive rights:
i) in the allocation of a share participation of up to a 20% threshold;
ii) in the award of the Operator status whenever
the oil fields production phase is extended;
Furthermore, for the award of new Oil and Gas concessions and the award of the national concessionaire associate status, SONANGOL (directly or via an affiliate) holds preemptive rights either for the granting of a share participation of at least 20% and for the assignment of the operator status.
In cases of share participation as a "non-Operator", SONANGOL may moreover be funded by the international associates, up a to 20% threshold, to perform its research operations.
The foresaid Law entered into force on April 18th 2019.
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