On Monday Benin adopted a modernized petroleum code aiming to create an attractive investment climate for foreign companies by clarifying the current regulatory framework; and reinforcing the country’s control over upstream operations.
Despite its favourable location in the Gulf of Guinea, Benin is not well known in the hydrocarbon sector and has never been a major petroleum producer. The country’s last sizeable discovery happened in 2013 when Nigerian exploration company South Atlantic Petroleum (SAPETRO) discovered a 87-million barrel field.
Member of Parliament, André Biaou Okounlola, who initiated the draft to state said: “Benin’s new petroleum code will allow us to regulate access to exploration blocks; improve governance and transparency thanks to a clear institutional framework; and implement measures to promote hydrocarbon upstream activities.”
The act includes simpler mechanisms for operators in the transition from exploration stage to production stage. It also highlights local content policies and introduces sounder economic and fiscal measures.
Unlike Senegal’s new petroleum code adopted on Thursday, current explorers in Benin will be authorized to request revision of terms of contracts pertaining to the new law, parliamentarians stated.
“This law offers is very attractive to oil and gas companies as it alleviates the processes to access exploration blocks; protects national interest of the State by discouraging speculations around blocks; and improve local content policies,” added Okounlala.