22 February 2017, Luanda — U.S. energy company Chevron is in talks with the Angolan government and state oil firm Sonangol to revise tax terms and any future investment will hinge on those talks, a senior company official was quoted as saying on Wednesday.
“Existing tax terms are not very attractive … We have been working both with Sonangol and with various departments of the government of Angola so that we can make it feasible and we can invest. Our investment will depend on what will result from these negotiations,” Chevron Vice-president Jay Johnson was quoted as saying on state radio.
Africa’s second largest crude producer and third largest economy has been laid low by depressed prices for oil, which accounts for about 90 percent of government revenue.
Angola’s economy contracted 4.3 percent in the third quarter of 2016 after shrinking 7.8 percent in the second quarter, the National Institute of Statistics said this month, a sharp reversal from double-digit growth when oil prices were high.
The economic backdrop could set the stage for tough tax talks as Angola’s government needs revenue while large oil companies are trying to turn a profit in a difficult price environment.
Johnson was also quoted as saying that recent output cuts by the Organization of the Petroleum Exporting Countries (OPEC) – of which Angola is a member – had not affected Chevron’s production levels in the southern African country.
*Herculano Coroado; Ed Stoddard & Jason Neely; editing: David Clarke – Reuters