The Ministry of Mines and Hydrocarbons of Equatorial Guinea is in the process of implementing a series of measures, effective from 2024, which aim to enhance the profitability and attractiveness of oil investments.
Equatorial Guinea’s Minister of Mines and Hydrocarbon Antonio Oburu Ondo is in the process of implementing a series of measures to strengthen the business climate for oil and gas companies in the country. In a press statement released this week, the Ministry provided insight into several fiscal amendments that will come into force in 2024, all of which aim to improve the profitability and attractiveness of oil investments in the country.
The African Energy Chamber (AEC), serving as the voice of the African energy sector and a strong advocate for the development of Equatorial Guinea’s energy sector, commends the efforts being taken by Minister Ondo and the Ministry of Mines and Hydrocarbons to incentivize investment in the country’s oil sector, and is inviting the Government of Equatorial Guinea to go even further, establishing broader economic incentives that not only strengthen the rule of law in the country but enable the economy at large to flourish.
Despite representing a major oil and gas player, exploration in Equatorial Guinea has been on the decline, opening lucrative opportunities for E&P investors. The Organization of Petroleum Exporting Countries nation offers substantial untapped reserves, and players are already seizing the opportunities presented by the market. Active companies in the market include Noble Energy, Chevron, Marathon Oil and many more, all of which work collaboratively with the National Oil Company GEPetrol. Meanwhile, just this year, Equatorial Guinea awarded Production Sharing Contracts to two E&P companies under the EG Ronda 2019 licensing round. These included Panoro Energy for Block EG-31 in the Niger Delta Basin and Africa Oil Corporation for Blocks EG-18 and EG-01 in the Rio Muni Basin. The Ministry is also preparing to launch its next licensing round, opportunities of which will be promoted during the African Energy Week conference this October.
With a strong slate of oil and gas companies active in the market and growing interest by new players to invest, the Ministry of Mines and Hydrocarbons is committed to improving the business climate and incentivizing further participation. Fiscal reforms that will come into effective in 2024 include the reduction of Corporate Income Tax from 35% to 25%, translating into a reduction of 10 points, and the reduction of Dividend Tax from 25% to 10%, resulting in a reduction of 15 points.
Additionally, under efforts to invite American-based investors and companies to participate in the Equatoguinean market, the Government of Equatorial Guinea is deploying a series of measures aimed at enhancing security and certainty for American stakeholders, centered around strengthening investment return. The measures will be adopted within the broader commercial and economic interests of the Republic of Equatorial Guinea and the United States of America.
According to the statement issued, the Ministry of Mines and Hydrocarbons will remain “available to all investors, current and potential, in order to continue strengthening confidence in the sector and among its actors.” As such, the Government of Equatorial Guinea is committed to equipping the country with the highest advantage to compete in the global energy market, creating lucrative avenues for investors to join the promising West African market.
“Equatorial Guinea’s resource wealth and strategic location to both African and global markets make the country a highly strategic investment opportunity for regional and international oil companies. In tandem with domestic processing infrastructure that enables Equatorial Guinea to monetize both local and regional oil and gas resources, opportunities for investors to make high returns are evident. Now, through the latest fiscal amendments, Equatorial Guinea is strengthening the business environment even further while enhancing its competitive as a hydrocarbon play,” states Leoncio Amada Nze, Executive President of the AEC for CEMAC.
These measures represent just the start of wider economic reform that can be implemented to strengthen the economy of Equatorial Guinea. As a country, Equatorial Guinea’s investment opportunities transcend oil and gas, with emerging prospects cropping up across the clean energy, infrastructure, manufacturing and commercial sectors. The measures implemented by the Ministry of Mines and Hydrocarbons can serve as a foundation for broader economic reform, and the AEC encourages the Government to continue driving this positive regulatory momentum, thereby positioning Equatorial Guinea as both an attractive energy and economic hub.
Nze added that, “The AEC commends the latest fiscal measures being undertaken in the country and urges the Government of Equatorial Guinea to go one step further, implementing broader national regulatory reform that positions the country as one of the most attractive economies to do business in Africa.”