As part of its recent programme of overhauling its hydrocarbon laws, Angola passed a law on the topic of decommissioning in April 2018. Presidential Decree 91/18 covered decommissioning wells and facilities, requiring operators to provide plans to the Mineral Resources and Petroleum Ministry.
Bracewell partner Adam Blythe said: “As part of Angola’s recent reforms to its petroleum regime, a specific decommissioning law was enacted in 2018, which I think is a first for the region.”
Operators are required to update decommissioning plans every three years and set out when decommissioning funds are to be provided.
Blythe continued: “There have been some disputes in the past over how funds for decommissioning should be held – these can amount to hundreds of millions of dollars – which have now been resolved and requires funds to be held by Sonangol in dedicated escrow accounts with improved transparency. This appears to be a good start for Angola but the regime is largely untested.”