The Democratic Republic of Congo’s parliament is debating an oil code that may impose a 40 percent capital gains tax, allow drilling in national parks, and force current title holders to renegotiate their deals.
The code will create a new legal framework for the country’s nascent oil industry and replace 1980s-era legislation governing hydrocarbons, according to a copy of the draft law obtained by Bloomberg from members of the National Assembly. Existing permits that were legally acquired “remain valid and are renegotiated in the 36 months from the date the law is enacted,” the draft says. Congo’s president will retain the right to approve all permits, according to the proposals.
Congo’s government plans to raise its current oil output of 25,000 barrels per day is opening up dozens of blocks for exploration across the nation, sub-Saharan Africa’s largest by landmass. Companies including Total SA (FP), SacOil Holding Ltd. (SCL), Soco International Plc (SIA), and billionaire Dan Gertler’s Fleurette Group all have oil exploration projects in the country.
“It is vital that the government of the DRC gets this important legislation right and introduces a regulatory framework which balances the need to create a positive, stable environment that encourages investment” while ensuring Congolese citizens benefit, Fleurette said in an e-mailed statement yesterday
Written by Michael J. Kavanagh | Read more at Bloomberg