Sonangol, Angola's state-owned oil company, has forfeited its 70% stake in Cuba's Block 9 after failing to meet payment obligations of $23.5 million, as reported by Melbana Energy on April 21.
The Australian firm Melbana, headquartered in Sydney and operating the project, invoked the Joint Operating Agreement (JOA) clause that deems Sonangol as withdrawn from the project, which could lead to the transfer of its stake to the Australian company.
Background on the Financial Dispute
The issue dates back to November 2025 when Sonangol informed that it was unable to provide funds that year and requested to delay drilling the Amistad-11 well until 2026. In response, Melbana issued an initial default notice and halted contractor activities. On January 22, 2026, the notice was formally reissued, restarting the 60-day period stipulated in the contract. Sonangol failed to resolve the debt within this timeframe, which expired in early April.
Consequently, Melbana considers Sonangol's exit from the project complete, claiming that the 70% stake now belongs to them, potentially giving them full ownership of the production-sharing agreement with the Cuban state oil company CUPET.
Current Status and Challenges
However, the stake transfer is not finalized; it requires approval from the Cuban regulator to be effective. Despite Sonangol's exit, the $23.5 million debt remains its responsibility, and Melbana is exploring legal avenues for recovery.
The Block 9 region spans 2,344 square kilometers in Cuba's northwest oil belt, between Havana and Varadero, accounting for 99% of Cuba's national reserves. Sonangol had joined as the majority partner in 2020, agreeing to finance 85% of the costs for two exploratory wells in exchange for its stake.
Technical and Operational Insights
The project's technical outcomes have been mixed. The Amistad-1 well once produced up to 1,235 barrels per day during testing, though it currently yields around 20 barrels daily. In contrast, the Amistad-2 well did not generate significant oil quantities due to a geological misinterpretation based on outdated seismic data; it was drilled in an area where the oil had already migrated.
Prior to this incident, the company faced hurdles exporting over 30,000 stored barrels due to port issues, blackouts, and adverse logistical conditions in Cuba. The electrical crisis in Cuba even necessitated the diversion of the main drilling rig to a gas well to support power generation.
Future Plans and Regional Context
Following Sonangol's departure, Melbana intends to employ new 2D and 3D seismic studies to enhance geological accuracy and mitigate risks before further drilling. The company is maintaining minimal site supervision and basic production operations while awaiting regulatory confirmation of their 100% ownership.
Melbana's report also acknowledges the potential benefits for the project once regional political issues are resolved, highlighting that Cuba's environment remains challenging for energy investments, hindered by decades of mismanagement by the regime and a collapsing infrastructure.
A report by McDaniel & Associates estimated Block 9's potential at nearly 15.7 billion barrels of oil in place and 676 million barrels of prospective resources, figures that starkly contrast the project's current operational reality and the historical challenges of Cuba's oil sector in turning potential into actual production.
FAQs on Sonangol's Loss of Stake in Cuban Oil Project
Why did Sonangol lose its stake in the Cuban oil project?
Sonangol lost its 70% stake in the Block 9 project in Cuba due to failing to meet its payment obligations of $23.5 million, as stipulated in the Joint Operating Agreement with Melbana Energy.
What are Melbana Energy's future plans for Block 9?
Melbana Energy plans to utilize new 2D and 3D seismic studies to improve geological understanding and reduce risks before future drilling operations in Block 9.
Is the transfer of Sonangol's stake to Melbana finalized?
The transfer of Sonangol's stake to Melbana is not yet finalized. It requires approval from the Cuban regulator before it becomes effective.