By OGJ editors
HOUSTON, Nov. 29 -- Equatorial Guinea President Teodoro Obiang ratified a new hydrocarbon law increasing the minimum royalties that oil and gas companies must pay to 13% from 10%.
Raymond James & Associates issued a Nov. 28 research note saying the new law also gives Equatorial Guinea the right to a 20% share in contracts with foreign operators and mandates that producers will be required to pay "any windfall tax that may be imposed by the state."
The new hydrocarbon law was posted Nov. 24 on the African government's Mines and Energy web site.
"Equatorial Guinea has historically been welcoming to foreign producers, and these new laws are modest increases as opposed to what the more aggressive governments such as Bolivia and Venezuela have imposed in the last few years," RJA said.
Oil companies having operations in Equatorial Guinea include ExxonMobil Corp., Devon Energy Corp., Marathon Oil Corp., and Hess Corp.
In addition to ratification of the new law, the government extended the closing date of its 2006 Licensing Round to Mar. 31, 2007, from Jan. 31, 2007, saying this was "to allow prequalified companies to fully evaluate the available acreage."