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Africa Energy Outlook 2019 is the IEA''s most comprehensive and detailed work
Houda Law Firm Abidjan is a multi-sectoral and multidisciplinary law firm based in Senegal and the Ivory Coast. The firm was founded in 1977 and has 61 members of staff, including 18 in Côte d''Ivoire, composed of a team of lawyers, jurists and paralegals. The team works in French and English to ensure the satisfaction of local and international clients. Houda Law Firm Abidjan provides legal advice and assistance to a variety of clients in many different practice areas, including business law, insurance law, banking and finance, public and private international law, contract law, mining, oil and gas, renewable energy law and tax. The firm has proven expertise in the energy and extractive sector, PPPs, banking and finance, and corporate and commercial law.
The state exclusively owns all the deposits and natural accumulations of hydrocarbons in the soil and subsoil of Côte d''Ivoire as well as its territorial sea, its exclusive economic zone and its continental shelf, whether discovered or not discovered (Article 2 of the Petroleum Code). No person, including the owner of the surface, may undertake any operation unless such person has been previously authorised in accordance with the provisions of the Petroleum Code (Article 4 of the Petroleum Code).
The Ministry of Mines, Petroleum and Energy is responsible for the implementation and monitoring of the government''s policy on mines, petroleum and electricity. In the field of hydrocarbons, the Ministry elaborates and monitors the legislation and regulations in the field of hydrocarbons. Its mission is also the development of the activities of exploration and exploitation of hydrocarbons as well as co-ordination of the supply and distribution of oil products. It also controls the conformity of the marketed oil and gas products to fight against fraud.
The General Directorate of Hydrocarbons (Direction Générale des Hydrocarbures or DGH) is one of the two Directorates of the Ministry of Mines, Petroleum and Energy. It is the government authority primarily responsible for the development and regulation of the oil and gas industry in Côte d''Ivoire. It is also mainly responsible for the research of hydrocarbon exploitation.
The Interdepartmental Petroleum Commission (Commission Interministérielle Pétrolière or CIP) oversees the technical review of applications for petroleum authorisations and petroleum contracts. In addition to its most important function, it must approve the lists of materials, chemical products and equipment that can benefit the exemptions prescribed by Article 79 of Law No 96-669 of 29 September 1996, on the Petroleum Code (exemption from all import duties and taxes, including value added tax (VAT)). CIP is also governed by Title XI of Decree No 96-733 of 19 September 1996, on the general application of the Petroleum Code.
Côte d''Ivoire has a national company, Petroci Holding (owned by the state (95%) and the employees (5%)) and its three subsidiaries: Petroci Exploration-Production, responsible for upstream hydrocarbon activities; Petroci-Gaz, responsible for development of the gas sector; and Petroci Industries-Services, responsible for all other related services.
The Société Ivoirienne de Raffinage (SIR), the only Ivoirian oil refinery, and its associated storage company, GESTOCI, sell refined oil. The market for petroleum products is not liberalised, so companies seeking to market petroleum in Côte d''Ivoire must do so through SIR and the Ministry of Petroleum, Energy and Renewable Energy.
Hydrocarbon is governed by Law No 96-669 of 29 August 1996, on the Petroleum Code (the "Petroleum Code"), as modified by Ordinance No 2012-369 of 18 April 2012 for all upstream, midstream and downstream operations. This law governs hydrocarbon prospecting authorisation, petroleum contract for hydrocarbon research and exploitation, hydrocarbon research and exploitation authorisation, as well as authorisation to transport hydrocarbons by pipeline, and customs tax and exchange regulations.
The following main legislation governs the Petroleum Code''s application as well as the types of authorisations and permits available.
The Petroleum Code is currently under revision but in its early stages without specification as to what will be changed.
Article 56 of the Petroleum Code provides that if a hydrocarbon deposit extends over several contractual perimeters allocated to separate holders, the latter may be required, where appropriate, to enter a so-called "unitisation agreement" in order to exploit the deposit under the best technical and economic conditions. This agreement and the joint exploitation plan must be submitted to the government.
Foreign private investments are allowed in Côte d''Ivoire. The contracts need authorisations from the state to carry out oil and gas activities. The terms of this authorisation are prescribed in a petroleum contract between the contractor and the state. The government has discretionary power to grant the authorisations and agree to the contracts.
Article 8 of the Petroleum Code prescribes two requirements. On one hand, foreign operators must justify a permanent establishment, through a local subsidiary for the whole duration of the Petroleum Contract or through a branch. If the foreign operators were to choose to open a branch for this operation to occur, their branches must be transferred to a local entity within two years of registration. On the other hand, all eligible companies must be able to demonstrate sufficient technical, financial and legal capacity to undertake oil and gas operations.
Foreign direct investments must be declared to the Ministry of Economy and Finances, to allow dividends and other income from the investment to be expatriated.
All applications for authorisation to explore for hydrocarbons or petroleum contract must include the specific information prescribed by Article 10:
Authorisation to explore for hydrocarbons in areas not covered by a petroleum contract may be granted by government decree, setting out the conditions. Prospecting authorisations are granted for a maximum of one year and may be renewed once for a year. It is not a mining title and is neither assignable nor transferable (Article 11, Petroleum Code).
Prospecting authorisations do not entitle the holder to enter a petroleum contract (subject to exemptions). The results of prospecting work are communicated to the government under the conditions set out in the decision. The state may at any time enter a petroleum contract for all or part of the perimeter covered by a prospecting authorisation, which automatically lapses for the area concerned, without entitling the holder to any compensation (Article 12, Petroleum Code).
For this application to be admissible, it must be submitted fulfilling all requirements previously prescribed and must relate to only those areas open to exploration and exploitation (Article 11, Decree of Application of Petroleum Code).
For prerequisite qualifications, see 2.1 Forms of Private Investment: Upstream. A company can be a branch of another company but must provide all details of the parent company as well as protocols, statutes or contracts governing its relationship with the parent company regarding petroleum operations.
For a single application submitted by multiple companies, see 1.4 Principal Hydrocarbon Law(s) and Regulations.
Petroleum contract holders are subject to an annual surface fee where the amounts are established in the contract (Article 68, Petroleum Code).
Companies are subject to payment of taxes under the General Tax Code and fees (Article 66, Petroleum Code) due to the upstream operations and activities of research and exploitation (downstream). Taxation in the oil sector is both upstream and downstream. Upstream taxation is governed by the Petroleum Code and production-sharing contracts.
Goods and services not directly assigned to petroleum operations, and therefore not eligible for deduction under the provisions of Articles 224 et seq of the General Tax Code, are excluded from the above-mentioned VAT exemptions. Exemption from VAT, tax on the provision of services and advance payment on various taxes apply under the same conditions to companies holding an oil subcontracting contract.
No special rights are given to national companies in connection with upstream licences. There is no right to take over but, after research operations, the state can be benefit from any discovery made during the research phase.
Law No 2022-408 of 13 June 2022, on Local Content in Oil and Gas Activities is a recent law that governs everything relating to local content. The purpose of this law is to promote and develop local content in oil and gas activities in the Republic of Côte d''Ivoire, to maximise added value and job creation in oil and gas activities through the use of local expertise, local goods and services and Ivorian companies; to develop local capacities in the oil industry value chain (education, training, skills development and transfer, technology transfer) and know-how as well as research and development; and promote the strengthening of national and international competitiveness of Ivorian companies and the development of a national industrial fabric (Article 3).
See 4.1 Foreign Investment Rules Applicable to Domestic Investments in Hydrocarbons on imports and 7.4 Material Changes in Law or Regulation for the latest updates in this area.
The holder of a hydrocarbon exploration authorisation who has provided proof, through research, appraisal and delimitation work carried out in accordance with the present law, of the existence within its perimeter of a commercially exploitable hydrocarbon deposit shall be entitled, in the event of an application in due form submitted before the expiry of the validity of its exploration authorisation, extended, where applicable, under the conditions of paragraph 3 of Article 22, to obtain an operating authorisation relating to this deposit (Article 34, Petroleum Code).
Article 34 prescribes that such application must be accompanied by a draft development and production plan for the deposit, submitted to the government, which must include:
The application must also designate the oil company acting as operator, which is required to justify its technical, financial and legal capacities, and which will have duly demonstrated satisfactory experience as operator in similar areas and conditions. The holder must undertake to carry out the development work on the commercial deposit with all possible diligence, in accordance with the development plan and any amendments thereto.
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