Royalties are currently charged at 12.5% of the gross value of oil and gas produced, minus an allowance for transport and treatment costs from older fields that were commissioned before 1982.

The move is designed to extend the life of some of the oldest production fields in the region, which would slip into unprofitability under the current taxation regime.

The concession had been promised to oil companies last April when a new 10 percent corporate tax was levied on profits on all oil and gas production.