CAPE TOWN, May 13 (Reuters) - Angolan President Joao

Lourenco is expected to approve by June a law that will offer

new incentives to expand production in offshore blocks, a top

energy official said, the latest step to boost investment and

stabilise output in its mainstay sector.

The law is among a slew of recent regulatory changes aimed

at overhauling the oil and gas industry in Angola, which has

been wooing Chinese and U.S. investors since leaving OPEC to

protect its domestic production targets.

The incremental production decree is expected to benefit

Angola's offshore Block 17, described by operator TotalEnergies

CEO Patrick Pouyanne as a "golden block" when

production licences were extended to 2045.

The extension five years ago granted Angola's Sonangol an

initial 5% interest in the field from TotalEnergies and

consortium partners Equinor ( EQNR ), ExxonMobil ( XOM ) and BP

.

"The decree ... is expected to be approved by the National

Assembly and the Angolan President before the end of the second

quarter of this year," Paulino Jeronimo, CEO of Angola's

national oil and gas company ANPG, said.

Sweeping incentives include reductions in royalty and

petroleum production taxes, and scope to contractually alter two

key metrics affecting returns - cost oil and profit oil.

"For example, to accelerate cost recovery there is a higher

cost oil limit so that all costs are recovered faster, thus

reducing the investor's financial exposure," Jeronimo told

Reuters in an emailed response to queries.

The decree also allows for the recovery of exploration costs

regardless of well results, he said, adding that a new oil and

gas auction round offering at least nine offshore blocks in the

Kwanza and Benguela Basins will be launched next year.

Sub-Saharan Africa's second largest oil producer, Angola

will maintain production of around 1.1 million barrels per day

in the foreseeable future, officials said.

Jeronimo said a letter of agreement was signed with

TotalEnergies in March to develop new opportunities at Dalia

field where one of four floating production platforms (FPSOs)

operate in Block 17.

TotalEnergies did not respond to requests for comment.

As part of negotiations with the French energy company,

Jeronimo said an investment of around $7 billion to extend the

life of Dalia FPSO platform could see accumulated production of

500 million barrels of oil (mbl) by 2045, up from 110 mbl in

2030.

"This will only be possible due to the incentives granted

with the incremental production decree," he said.