Melbana Energy has deferred drilling the Amistad-11 well in its onshore Cuban Block 9 PSC after its partner, Angola's national oil company Sonangol, failed to meet agreed cash call payments for 2025 activities. Despite having a revised budget approved and confirming it would pay, Sonangol informed Melbana it could not remit more funds in 2025 and requested the well be deferred to 2026.

Operational and Contractual Consequences

Mobilisation of the rig was completed and final permits received in late November, with drilling originally scheduled for completion by year-end. In response to the delay, Melbana has initiated demobilisation of contractor personnel and equipment, deeming it more economical than standby costs. A revised spud date is pending. Furthermore, Melbana issued a formal Notice of Default to Sonangol for the non-payment. If Sonangol fails to cure this default within 60 days, it may be required to assign its 70% interest in Block 9 to Melbana.

Context of Block 9 and Sonangol's Financial Position

Block 9 is a significant asset, covering over 2,344 square kilometres in a proven hydrocarbon system near the multibillion-barrel Varadero field, with an estimated 676 million barrels of prospective oil resources. Concurrently, Melbana is finalising a joint marketing agreement to export all production from the block and recently spudded the Amistad-2 well after earlier hurricane-related delays.

Sonangol's financial challenges are a backdrop to this dispute. The company has undertaken restructuring efforts following alleged mismanagement in the late 2010s. Its 2024 financial statements show current liabilities of $7.9 billion against cash and equivalents of $2.5 billion. Recent strategies to raise capital include plans for a partial IPO, the 2021 sale of stakes in eight offshore blocks to address $36 billion in liabilities, and, in 2024, offering interests in ten discoveries across several blocks to international investors.