Australian company Melabana Energy has received €425,000 (approximately US$675,000) from Angolan State-owned company Sonangol to boost its preparations to drill offshore Cuba in the Santa Cruz oilfield.
The payment represents a portion of funds that Melbana would have used to explore Block 9 — a 2,344 km area onshore Cuba — but which Sonangol agreed to pay as “past costs” after agreeing to purchase a 70 per cent stake in Block 9.
“We appreciate the commitment Sonangol continues to show towards this drilling programme and for making this initial payment ahead of formal completion of the agreements between us,” Melbana Executive Chairman Andrew Purcell said in a press release Tuesday.
“ This flexibility demonstrates that we are both keen to test the significant potential offered by Block 9 as soon as possible,” he continued.
In December last year, Melbana announced that it signed a farm-out agreement with Sonangol in relation Block 9 in Cuba. The agreement would be subject to the approval of Cuban regulator CUPET.
As part of the terms of the deal, the Angolan company would acquire a 70 per cent stake in the oil field. In return, it would fund 85 per cent of all costs associated with the completion of two wells — Alameda and Zapato.
In addition, Sonangol would pay Melbana AU$5 million for past costs, once CUPET had given its approval of the agreement.
“We appreciate the commitment Sonangol continues to show towards this drilling programme and for making this initial payment ahead of formal completion of the agreements between us.”— Melbana Executive Chairman Andrew Purcell
Sonangal’s part payment comes at a time when CUPET has indicated that it has approved the transaction but is in the process of completing formal paperwork. The Angolan company will, therefore, pay the remainder of the AU$ million when it receives the official go-ahead from CUPET.
With this initial deposit, Melbana expects to commence the construction of the first well pad at Alameda-1 in late August. The Australian oil explorer and producer is also looking forward to signing contracts with oil service firms and ordering items that will support its operation.
Given this situation, Melbana said plans to drill are at an advanced stage Melbana and indicated that its team is ready to go. However, it awaits “Senior members of the project management team [who] will need to travel to Cuba prior to the commencement of drilling operations.”
In the meantime, Melbana, which will still be the operator in Block 9, will have until the year’s end to begin drilling, based on its agreement with CUPET.