Sonangol to Offload Interest in Cobalt’s Blocks

Angola’s state-owned oil company, Sonangol, is accepting bids for its share in two offshore oil blocks, Blocks 21/09 and 20/11. Development of the blocks has stagnated, however, due to a dispute between Sonangol and Cobalt International Energy.

Sonangol holds a 30 percent stake in Block 20/11, BP holds a 30 percent stake and Cobalt International Energy holds 40 percent; in Block 21/09, Sonangol holds a 40 percent stake and Cobalt holds 60 percent.

An agreement for Cobalt to sell the licenses to Sonangol for $1.75 billion in 2016 fell through, and Sonangol declined to extend the licenses. Cobalt, which has filed for bankruptcy, took Sonangol to international arbitration over the dispute and announced it would not continue development on the block until the dispute was resolved. In December 2017, Sonangol announced it was settling with Cobalt for $500 million, according to Oil & Gas Investor.

Despite the dispute over the blocks, they have shown potential. In 2016, Cobalt announced it had made seven discoveries and found 750 million barrels of oil equivalent.