Offshore Oil & Gas Decommissioning - Angola

There are two key regulators:

• National Concessionaire

Presidential Decree No. 91/18 of 10 April provides that Contractors must submit to the National Concessionaire a provisional decommissioning plan, which shall include an Environmental Impact Study. 1  A Final Decommissioning Plan (which reflects the successive reviews and updates of the provisional decommissioning plan throughout the project's lifespan), must be submitted by the Contractors to the National Concessionaire no later than 24 months prior to the economic limit or cessation of production. 2

• Supervisory Authority (and other public authorities) 

The National Concessionaire, upon request of the Contractors, must submit the decommissioning approval request for the dismantling of facilities to the Supervisory Authority, which shall ensure that the necessary approval is obtained. 3  Finally, Presidential Decree No. 91/18 of 10 April sets forth the inspection and auditing duties regarding well abandonment and facility dismantling activities, assigning this oversight to the Supervisory Authority and other public authorities. 4

Abandonment and decommissioning activities in Angola are primarily governed by the Petroleum Activities Law (Law No. 10/04), and by Presidential Decree No. 91/18 of 10 April. This Decree establishes the rules and procedures applicable to well abandonment and the decommissioning of oil and gas operations in Angola.

In addition to these two key legal instruments, there are other relevant statutes governing offshore oil and gas decommissioning:

• Decree-Law No. 1/09 (Regulations on Petroleum Operations)

This Decree approves the Regulations on Petroleum Operations. The Regulations  aim to establish strict, objective standards and procedures to ensure operations are properly carried out in accordance with the principles and rules set out in Law No. 10/04 of 12 November.

• Presidential Decree No. 307/20

This Decree approves the terms of the Regulation on the Investment of abandonment funds from Petroleum Concessions in Angola’s Sovereign Debt. It sets out the principles, guidelines, and appropriate financial mechanisms for investing between 5% and 15% of abandonment funds in Angolan sovereign debt.

Liability for the decommissioning process in Angola is primarily governed by Presidential Decree No. 91/18 of 10 April.

The Decree provides that the Contracting Entities shall be responsible for taking all necessary measures to prevent accidents or incidents during or after the temporary or permanent abandonment of wells. 5

Moreover, it stipulates that, if an accident or incident occurs during or after abandonment (whether temporary or permanent) and it is established that such occurrence results from negligence or wilful misconduct by the Contracting Entities, those entities shall bear all liabilities and costs associated with restoring the wells to a definitively abandoned state. 6

With respect to the decommissioning of facilities, the same Decree imposes an equivalent obligation, stating that the Contracting Entities shall be responsible for taking all necessary precautions to prevent accidents or incidents during or after the decommissioning of facilities. 7

It further states that, once the handover process is finished, the National Concessionaire is required to issue, within 30 days, a certificate formally releasing the Contracting Entities from any liability related to the abandonment of wells and the decommissioning of installations. 8

The Petroleum Activities Law (Law No. 10/04) provides that the National Concessionaire, its associates, and Contractors are held liable for any damage caused to third parties during petroleum operations, unless they can prove the absence of fault. 9

Alongside these sector-specific provisions, broader environmental liability rules applicable to oil and gas operations are set out in other legal instruments, including:

• Decree 39/00 of 10 October 2000 (Environmental Protection in Petroleum Activities) under which the National Concessionaire and its associates must indemnify the State for environmental damages caused during petroleum activities regardless of fault.
• Law 5/98 of 19 June 1998 (General Environmental Law) requires parties to repair any damages and indemnify the State for environmental damages caused regardless of fault.
• Decree 194/11 of 7 July 2011 (Regulations on Environmental Damages Liability) that also foresees a general strict liability (regardless of fault) to repair any damages arising in connection with the undertaking of any activity.

Angolan legislation establishes a wide range of sanctions that may be applied according to the specific nature and severity of the infractions committed. This framework is comprehensive, encompassing administrative, civil, and, in certain cases, criminal penalties. Determination of the appropriate sanction is contingent upon a thorough assessment of the relevant legal provisions, together with the facts and circumstances surrounding each case.

While comprehensive, the applicable rules and sanctions are not consolidated in a single legal instrument. Instead, they are dispersed across various statutes, regulations, and administrative acts, which increases the complexity of the analysis.

Under the Petroleum Taxation Law (Law No. 14/04), costs or losses associated with decommissioning are deductible for tax purposes provided the Contractor complies with industry best practices, the applicable legal framework and are accepted within the limits established by the Ministry of Finance. 10  This includes all expenses related to the establishment and management of abandonment funds, which cover decommissioning costs. As such, decommissioning expenditures may qualify as deductible costs.

In many Production Sharing Agreements (PSA), co-venturers may be jointly liable to the Angolan state and third parties for environmental damage caused during operations. This means that any one of the co-venturers can be called upon to respond for the entirety of the damage, regardless of their contribution to the cause of the event.

In other cases, liability may be proportional to each co-venturer's participation in the consortium, as stipulated in the Joint Operating Agreement (JOA) and applicable legislation.

Under Presidential Decree No. 91/18, all Contracting Entities are required to establish abandonment funds by depositing the corresponding amounts into an escrow account. 11  These funds are to be used for decommissioning activities at the end of the field’s productive life. This mechanism aims to ensure that contractor group members remain responsible for covering the costs associated with well abandonment and dismantling of facilities.

As mentioned in point 2.2, all Contracting Entities must establish an escrow account that will be used for the activities of abandoning wells. However, in cases where the guarantee funds are insufficient for the abandonment activity, the Contractors must provide the necessary funds to carry out the abandonment work. 12

Under the terms of Presidential Decree No. 91/18, if any entity under contract is replaced before the end of the contract with the National Concessionaire, the new entity shall be liable for its proportionate share of abandonment costs. 13

Also, in the event of a replacement of Contracting Entities, the incoming party shall assume responsibility for the decommissioning. 14

From a contractual standpoint these matters are usually agreed between parties and addressed in the Sale and Purchase Agreement (SPA), particularly through the representations and warranties, and liability clauses.

There are several issues that remain unaddressed by the current regulations and will inevitably require attention in the near future.

Decommissioning and abandonment remain inherently complex processes that demand the coordination of technical, legal, and commercial factors. Often, the approach to these operations must adapt to the specific features of each project and is increasingly influenced by emerging engineering solutions and evolving industry standards.

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