Cobalt International Energy Inc. announced that the proposed offshore block sale in two assets in Angola to Sonangol was terminated as it did not get the necessary approvals from the Angolan government.
Cobalt was expected to sell a 40% stake in two offshore oil blocks for US$1.75 billion (£1.32 billion) to the Angolan state-owned oil and gas company, following a Purchase and Sale Agreement signed in August 2015.
“As the requisite Angolan government approvals were not received within one year, the Purchase and Sale Agreement automatically terminated,” Cobalt informed in a statement.
Offshore Block Sale Terminated in Angola
The deal was automatically terminated after the Angolan government did not give an approval within one year, Cobalt explained.
“If the requisite Angolan government approvals were not received within one year from the execution date of the Purchase and Sale Agreement, the Purchase and Sale Agreement provides that it is to automatically terminate,” Cobalt explained further.
Map of Cobalt’s Offshore Assets in West Africa
“Any obligations executed by the parties thereto shall be restituted in order to put such parties in their original positions as if no agreement had been executed,” the company said.
The closing of the sale was subject to the approval of the Angolan government and Sonangol had already paid Cobalt US$250 million (£189.5 million).
Cobalt Block Sale Falls Through
Meanwhile, Cobalt plans to work with Sonangol “to understand and agree on the financial and operational implications of the termination”.
“The company has begun the marketing and sale process of its Angolan assets,” Cobalt stated further.
The purchase and sale agreement was executed on August 22, 2015 by Cobalt Angola and Sonangol.
Under the agreement, Cobalt Angola would sell the entire issued and outstanding capital of CIE Angola Block 20 Ltd. and CIE Angola Block 21 Ltd. to Sonangol.
Respectively, they own Cobalt’s 40% working interest in each of the blocks.
Sonangol affiliate Sonangol Pesquisa e Produção currently holds a 30% working interest in block 20 and a 60% working interest in block 21.