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Congo Parliament Adopts New Hydrocarbons Code

Source: Reuters 6/16/2015, Location: Africa

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Democratic Republic of Congo lawmakers have adopted a new hydrocarbons code that the country hopes will allow it to draw more benefits from its expanding oil sector.

The Central African mining nation pumps 25,000 barrels per day, accounting for just 11 percent of its export revenues, although exploration off the Atlantic coast and near its eastern border with Uganda could increase that significantly.

Perenco, an Anglo-French oil and gas company, is Congo's only active producer of oil, but French company Total and a company owned by Israeli billionaire Dan Gertler are exploring near Lake Albert, straddling the border with Uganda.

The bill's passage was announced in a statement by the president of the National Assembly, Aubin Minaku, which was seen by Reuters on Tuesday.

"The implementation of this law will allow (Congo) to assure the security of investments and to put in place a fiscal regime that permits the Congolese state to profit from its hydrocarbon resources so that those contribute in particular to growth and the fight against poverty," Minaku said.

The code, which has not yet been made law by President Joseph Kabila, would replace a 1981 law widely considered to be obsolete.

The final text of the bill was not immediately available.

Previous drafts have included a 40 percent capital gains tax on all contracts, although it was not clear if this clause remained in the version adopted by parliament.

One point of controversy among lawmakers was a provision in the National Assembly version that would require oil companies to cede at least 20 percent of shares in their operations to a "national society of commercial character."

The Senate called the provision "contrary to the principle of economic liberalism" and said it risked creating conflicts of interest.

Campaign groups have criticized secrecy in Congo's hydrocarbons sector.

Juvenal Munubo, a deputy from the opposition Union for the Congolese Nation (UNC) party, said the new code could help shed light on the sector.

"It will allow, unlike in the current situation, to know who is acting in the hydrocarbons sector, the parties, their identities, where they are located," he said.

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