Angola opens bids for Cobalt’s former oil blocks

Angola’s Oil Giant, Sonango [File-Photo]
Angola’s state-run oil firm Sonangol is inviting bids for stakes in two offshore oil blocks in Africa’s second-largest crude producer, Sonangol said on Friday.

Angola is facing a gradual decline in oil output as aging fields become less productive, pressing its provisional June oil exports to a seven-year low.

Sonangol said in a statement that it was inviting bids for part of its stakes in blocks 21/09 and 20/11.

It said it would share information on those blocks with investors via “data showrooms” in Luanda and Houston.

Development on the blocks had been complicated by a dispute between Sonangol and U.S. oil company Cobalt International Energy, which until recently was the operator of the blocks and owned a 40 percent stake in them.

After a deal to sell the licences to Sonangol for $1.75 billion collapsed in 2016, Cobalt last year took the company to international arbitration over its failure to extend licence deadlines, which Cobalt said “negatively impacted” its search for another buyer.

Cobalt, which filed for bankruptcy protection last year, at the time said it did not plan any “material investment” in the blocks until the dispute was resolved, effectively putting a hold on development.

Sonangol announced in December 2017 that it had reached a settlement with Cobalt in which it would pay $150 million by Feb. 23 and a further $350 million by July 1.

In its 2016 results, Cobalt said it had made seven discoveries in the blocks with a total of 750 million gross barrels of oil equivalent.