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Angola: Cloud in Oil and Gas

An Interactive Guide for Legal and Compliance
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REGULATORY OVERVIEW

Angola is a country potentially rich in mineral resources including oil, natural gas, diamonds, phosphates, bituminous substances, iron, copper, magnesium and gold1.

Various Presidential Decrees were passed in respect of the Ministry of Mineral Resources and Petroleum (Ministry). Of significance, President João Lourenço2 has recently approved Angola's general strategy for the award of petroleum concessions for the period 2019-2025. The specific objectives of the strategy are: (i) to ensure the substitution of reserves, promoting the activity of exploitation in a rational and appropriate manner; (ii) to trigger appropriate measures to confirm the oil potential of the country; (iii) provide sufficient crude oil to satisfy the internal refining capacity, by weighting the economic viability of export versus import3. This represents great potential for significant business opportunities.

Upstream, midstream and downstream O&G businesses are quickly shifting away from using the cloud primarily for infrastructure. The cloud is becoming an enabler for successful digital transformation, helping to optimize exploration and production. The O&G sector needs better, faster, and cheaper ways to manage and analyse increasing amounts of data. The cloud offers the solution. It gives companies an ability to vastly improve operational excellence, safety and productivity, using cloud technologies like advanced analytics, machine learning and artificial intelligence; all of which enable the real-time use of information to deliver more effective decision-making and business process efficiencies.

MICROSOFT'S COMMITMENT TO THE ANGOLAN O&G INDUSTRY

Our mission at Microsoft is to empower every person and every organization on the planet to achieve more. Microsoft has partnered with a number of O&G organizations across the world and witnessed first-hand the transformational power of the cloud in the O&G sector. Microsoft's Intelligent Cloud, Intelligent Edge platform strategy, supported by an extensive and competent ecosystem of leading industry partners, means the O&G industry is able to create innovative products and services, execute with excellence, and improve customer engagement while at the same time reaping the benefits of mobile tools and increased employee productivity and engagement. Our Microsoft Azure platform has consistently delivered leading edge capabilities through its IaaS, PaaS, and SaaS services, providing efficiency and empowering the O&G industry to reduce the complexity of managing costly infrastructure, while improving agility and innovation. In addition, the platform offers significant benefits including reliable security and greater flexibility to adapt to the O&G industry’s business cycles.

In addition, Microsoft can now deliver the intelligent Microsoft Cloud for the first time from data centres located in South Africa. The new cloud regions offer enterprise-grade reliability and performance to help enable the tremendous opportunity for economic growth and increase access to cloud and internet services for organisations and people across the African continent. This new investment is a recognition of the enormous opportunity for digital transformation in Africa and is a major milestone in the company’s mission to empower every person and every organisation on the planet to achieve more in a safe, secure and legally compliant manner.

Microsoft and our partner ecosystem are ready to support O&G businesses in Angola. Microsoft experts are also available to understand your requirements and provide detailed information on the technical, contractual and practical aspects of any proposed cloud project. This is all part of our commitment to helping our O&G customers to smoothly navigate their way to the Microsoft cloud - including Microsoft Azure, Office 365 and Dynamics 365 - with confidence and reap the benefits of a digital transformation journey.

THE REGULATORY ENVIRONMENT

Currently, the Angolan O&G industry regulatory framework encompasses the following main legislation, which applies to oil and gas activities:

  • General Law on Oil Activities 4;
  • Oil Activities’ Regulation 5;
  • Additional Activities Developed in the Oil Concessions’ Development Areas 6;
  • Natural Gas Tax and Legal Framework 7; and
  • Oil Activities Tax Law 8.

President Lourenço has passed several decrees as part of the planned action to reorganize the hydrocarbons sector in Angola and to develop a sustained management of O&G resources, which enable revenue generation necessary to contribute significantly to diversification of the economy, as well as in the socio-economic development of the country9. The legislative initiatives so far include the creation and taking of possession of the board of Directors of the National Petroleum Agency, Gaz and Biofuels (ANPG) and approval by the National Assembly of the revision of law 10/04 (Petroleum Activities Law) and law 13/04 (taxation law) that formalize the passage of the concessionaire function of Sonangol, E.P. to ANPG10.

  • The Ministry is the regulatory and oversight body responsible for regulating oil exploration and production activities.11

    The key regulator for the O&G industry is now the ANPG12. This agency is not only the regulator but also the national concessionaire13, being entrusted also with the tasks of supervising and fostering the implementation of the oil activities, namely, all public procurement and operations.

    ANPG has assumed the function of national concessionaire14 and regulates, supervises and promotes the implementation of oil activities in the field of operations and contracting of the oil, gas and biofuels sector. The purpose of the restructure is to ensure greater political coordination, eliminate eventual conflicts of interest, increase the transparency and efficiency of the processes and create attractive conditions for private investment in the national oil industry15.

    Sonangol, E.P. is now the public oil company16.

    Legislation has also been published in the Official Gazette foreseeing the creation of the Oil Derivatives’ Regulatory Institute17.

  • Cloud services are permitted. There is no specific regulation on cloud services in Angola. There may however be laws of application to the Angolan O&G industry, which may need to be considered. In making the decision to move to the cloud, it is crucial for industry participants to consider and ensure compliance with all applicable legislation.

    Microsoft is proud to confirm that it meets regulatory and compliance requirements for use of the cloud in some of the most highly regulated industries across the globe and can help you to achieve compliance with the regulatory and compliance requirements applicable in the O&G sector

  • There is presently no uniform regulation of cloud services in Angola. Role-players within the O&G industry should however be mindful of certain regulatory provisions in moving to the cloud, namely:

    • Data and information collected during prospecting is the property of the Angolan State. The Ministry may, however, authorise the licensee to sell the data and information collected, after consulting with the concessionaire (ANPG). The profits related to the sale are shared equally between the concessionaire and the licensee.18
    • Confidentiality of technical and economic data must be maintained by the Ministry and by all other people and entities involved in O&G operations until the expiry date foreseen in the relevant license or concession agreement.19
    • Furthermore, the Production Sharing Agreement (PSA) provides that all information of a technical nature obtained throughout petroleum operations belong to the concessionaire. Thus, the licensee is only entitled to use and copy, free of charge, such information for internal purposes.
    • Unless otherwise agreed by the concessionaire and the licensee, while the PSA remains in force, all technical, economic, accounting or any other information, including, without limitation, reports, maps, logs, records and other data developed through the conduct of petroleum operations, must be held strictly confidential and must not be disclosed by the licensee without the concessionaire's prior written consent. However, permitted exceptions allow the O&G companies to disclose the aforementioned data in certain circumstances, without such consent, to consultants, contractors or other third parties as may be necessary in connection with petroleum operations upon obtaining a similar undertaking of confidentiality.
    • The PSA also provides that the licensee's obligation to keep information obtained during the petroleum operations confidential continue for 10 years after the PSA terminates (or any other period agreed by the concessionaire and the licensee).

    In addition, there may also be licence and/or contractual provisions (including confidentiality undertakings for each concession, in Joint Operating Agreements) which may need to be considered.

    Microsoft acknowledges the customer as the exclusive owner of its data, and provides both strong contractual undertakings as well as technical and operational measures to address confidentiality and security.

  • Approval is not required from any O&G regulator, as none of the O&G sector legislation specifically addresses cloud services. However, modifications to the O&G legislation may be implemented in the future by ANPG20.

    An O&G industry participant which is an organ of state (such as the ANPG) may be required to follow specific procurement processes in procuring cloud services under applicable public procurement laws. This may necessitate certain approvals, but any such requirement is unlikely to relate specifically to the aspect of cloud computing.

  • O&G regulators possess broad inspection powers that include the power to search and seize a wide range of information and records21. Microsoft’s cloud services are subject to rigorous audits by internationally accredited third parties and are certified against several key global standards and regulatory requirements. Those standards include ISO/IEC 2700122 and 27002 as well as the cloud specific extension ISO/IEC 2701723 and ISO/IEC 2701824 (a series of the most well-known globally accepted information security management standards) and the Service Organization Controls standards SOC1, SOC2 and SOC325 as well as the Cloud Security Alliance’s Security, Trust & Assurance Registry (CSA STAR)26. Together, the advanced controls embodied within these global standards allow Microsoft to meet or exceed local information security requirements that may apply.

  • There are no data transfer requirements specifically for the O&G sector, but Law No. 22/2011 ("Data Protection Law"), of 17 June, regulates the transfer of personal information and provides that the communication of data to a sub-contracted data processor can only be carried out if the following conditions are complied with27: (a) the subcontractor and the data controller must enter into a written agreement or other legally valid written document, under which terms the subcontractor undertakes to comply with the provisions of the Data Protection Law and to act according to the instructions of the data controller; and (b) notification to the Angolan data protection 28. These rules only apply to any information with respect to any natural person (individual), but do not apply to companies.

    The data controller may only transfer personal data to a third party outside Angola after notifying the Angolan data protection authority and if the country has a level of protection at least identical to that provided by the Data Protection Law29. Otherwise, the transfer of personal data to a third party outside Angola has to be authorized by the Angolan data protection authority, and such authorization may only be granted when the specific circumstances set out in the Data Protection Law are complied with30.

    Microsoft holds itself accountable to and is subject to laws of general application applicable to information technology service providers, and has binding agreements which, in its view, are likely to constitute adequate protection. In addition, Microsoft adheres to the EU Model Clauses as well as the EU Privacy Shield and the ISO 27018 Privacy Standard. Microsoft is also committed to ensuring that its products and services comply with the EU General Data Protection Regulation (GDPR) which came into force in May 2018.

  • 1 Article 17 of Law no. 16/2010, of 15 July.
    2 By Presidential Decree no.52/19 dated 18 February 2019
    3 Ministry statement 12 April 2019
    4Petroleum Activity Law No. 10/04 of November 12, 2004 is the main legal instrument covering the rules to access and conduct petroleum activities in Angola. This legal diploma has been modified by Law No. 5/19, dated the 18th of April, establishing that the National Concessionaire is, from now on, the National Petroleum Agency, Gaz and Biofuels (ANPG).
    5 Decree no. 1/09, dated the 27th of January.
    6 Legislative Presidential Decree no. 5/18, dated the 18th of May.
    7 Legislative Presidential Decree no. 7/18, dated the 18th of May.
    8 Law No. 13/04, dated the 24th of December. This diploma has been modified recently by Law no. 6/19, dated the 18th of April. Legislative Presidential Decree no. 7/18, dated the 18th of May, regulates taxation of prospection, research, evaluation, development, production and sale of natural gas in Angola.
    9 Governement of Angola
    10 Ministry statement 10 April 2019
    11 Art. 4.º of Presidential Decree No. 49/19.
    12 Created by Presidential Decree No. 49/19, dated the 6th of February, in which it is also published its by-laws. Art 2.º of the just mentioned diploma grants this agency the regulatory role in the oil, gas and biofuel.
    13 Art. 3.º of Presidential Decree No. 49/19.
    14 Law No. 5/19 published on 18 April 2019.
    15 Statement by the Ministry on 22 April 2019
    16 Sonangol’s new by-laws have been approved by Presidential Decree No. 15/19, dated the 9th of January.
    17 MIssing get
    18 Article 36.º of the General Law on Oil Activities. Although there has yet been no modification to the General Law on Oil Activities, all regulatory and supervisory competences previously held by Sonangol are now transferred to ANPG (article 3, section 1, of Presidential Decree No. 49/19.
    19 Article 77.º of the General Law on Oil Activities.
    20 Article 9,º, No. 1, c) establishes the ANPG to promote technological development in the O&G sector, and to promote legislative modifications deemed necessary.
    21 Article 76 of the General Law on Oil Activities.
    22 ISO/IEC 27001:2013 Information Security Management Standards
    23 ISO/IEC 27017:2015 Code of Practice for Information Security Controls
    24 ISO/IEC 27018 Code of Practice for Protecting Personal Data in the Cloud
    25 Microsoft compliance offerings
    26 Cloud Security Alliance (CSA) STAR Certification
    27 Law no. 22/2011 of 17 June
    28 Article 23, section 1, of the Data Protection Law.
    29 Article 33, section 2, of the Data Protection Law.
    30 Article 34 of the Data Protection Law.

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