Cobalt International Energy Inc. (NYSE: CIE) said it had filed requests for arbitration seeking more than $2 billion from Angola's state-run Sonangol after the two failed to reach an agreement on license deadline extensions on two deepwater blocks, company filings showed this week.
Cobalt said it was requesting an award against Sonangol in excess of $2 billion, plus applicable interest and costs.
It filed a separate request for arbitration against Sonangol seeking more than $174 million, plus applicable interest and costs, for the joint interest receivable for operations on Block 21 offshore Angola.
Sonangol did not return a request for comment.
Cobalt said its years-long efforts to find a buyer for its 40% stakes in Blocks 20 and 21 offshore Angola were "negatively impacted by the uncertainty surrounding the extension".
A deal to sell the licenses to Sonangol in a $1.75 billion deal collapsed in 2016 because required approvals from the Angolan government did not come in time.
While Cobalt owns 40% of the blocks and Sonangol has 30%, the Angolan state company holds the rights to extend exploration deadlines for production sharing agreements.
Sonangol "appears to be leveraging those roles to control the ownership and development of Cobalt's key pre-salt oil and gas discoveries fully, despite the implications for contract sanctity," said IHS Markit analyst Roderick Bruce. "The case will likely increase investor wariness over NOC partnership risks in Angola, already elevated by the uncertainties generated by Sonangol's restructuring and financial difficulties."
Recommended Reading
Chouest Acquires ROV Company ROVOP to Expand Subsea Capabilities
2024-05-02 - With the acquisition of ROVOP, Chouest will have a fleet of more than 100 ROVs.
SLB, OneSubsea, Subsea 7 Sign Collaboration Deal with Equinor
2024-05-02 - Work is expected to begin immediately on Equinor’s Wisting and Bay Du Nord projects.
SilverBow Makes Horseshoe Lateral in Austin Chalk
2024-05-01 - SilverBow Resources’ 8,900-foot lateral was drilled in Live Oak County at the intersection of South Texas’ oil and condensate phases. It's a first in the Chalk.
Petrobras Sending Nearly Half of Oil Exports to China
2024-04-30 - Conflict in the Middle East has enabled Brazil’s state-owned Petrobras to change the flow of its oil exports, with China being the primary beneficiary, followed by Europe.
Equinor Says EQT Asset Swap Upgrades International Portfolio
2024-04-30 - Equinor CFO Torgrim Reitan says the company’s recent U.S. asset swap with EQT Corp. was an example of the European company “high-grading” its international E&P portfolio.