“(Business in Cameroon) - We note a real interest on the part of international oil companies, whether already operating in Cameroon or not, to take advantage of the incentives provided by the oil code to increase investment or invest into oil exploration and production in Cameroon. Many law firms and professional organizations have also expressed their interest in promoting the new oil code (...),” says Jean-Jacques Koum (photo), Chairman of the Permanent Commission for Oil and Gas Contract Negotiations set up by the Société nationale des hydrocarbures (SNH), the national oil and gas company, in a recent publication.
According to the chairman, this enthusiasm is evident even though the framework is not yet fully in place. “The decree implementing the new law is eagerly awaited and should come into force shortly,” he says.
The new code, issued on April 25, 2019, is more attractive to investors because of the various incentives it provides, the official indicates. These incentives help mitigate the risks taken by investors and improve savings realized on their different projects. An example of such incentive is the tax cuts that should, according to Mr. Koum, reduce the risks investors face in this highly capital-intensive and risky sector.
From a fiscal point of view, Jean-Jacques Koum says, the new oil code contains a whole chapter devoted to the incentives Cameroon could grant to oil companies, to encourage them to take more risks, especially when the international oil market context is not favourable to investment, or when the field presents proven difficulties.
These incentives range from tax consolidation measures, tax exemption periods, lower tax rate of 35%, incentives for the acquisition of seismic data to an exemption from the payment of signature bonuses. The text also specifies that specific investment programmes aimed at increasing production such as tertiary recovery may also benefit from the incentives.