Sonangol Group (Grupo Sonangol), the state-owned company tasked with overseeing the affairs of petroleum and natural gas production in Angola, has executed a farm-in agreement with Australian oil and gas company, Melbana Energy Ltd (formerly MEO Australia) for interest in the Production Sharing Contract (PSC) of Block 9, onshore Cuba.

The Angolan company confirmed that it had completed its Confirmatory Due Diligence. In a statement on May 27, 2020, Melbana said the remaining condition left in the agreement is the Cuban regulatory approvals which have already been received and are currently being formally documented.

Under the terms of the agreement, for a 70% participating interest, Sonangol will fund 85% of all the costs to be incurred during the completion of drilling ‘Alamde and Zapato (The two highest Melbana ranked high impact target).’

The drilling operations are projected to begin in the fourth quarter of this year, to test an estimated two hundred and thirty-five million barrels of prospective resource. Melbana has also been reportedly working with drilling contractors and service providers to come up with up-to-date proposals to support the drilling of the wells. The needed permit is either already obtained, being renewed or extended, or only necessary after all the arrangements for the oil rigs and services have been made and the project is ready to kick off. The scheduling depends on movement restrictions due to the containment of the COVID-19 outbreak.

The South African OPEC and APPO member country is the second-largest oil-producing country in sub-Saharan Africa, with oil being one of its major exports. It is one of the countries affected by the COVID-19 pandemic and had to cut its daily production to play its part in the OPEC+ agreement that took effect on the 1^stof May. The execution of this deal is a step in the right direction for Angola; collaborating with a country on the Australian continent to invest in the Caribbean will boost the productivity of the Angolan oil industry.