Melbana Energy Provides Update on Cuban Operations
Key points
- CUPET designated as Specially Designated National by U.S.
- Melbana suspends direct participation in PSC
- Company seeks external legal advice on implications
Full summary
Melbana Energy Limited has suspended its direct participation in its Cuban Production Sharing Contract (PSC) following the U.S. Department of State's designation of Cuba's state-owned oil and gas company, Union Cuba-Petroleo (CUPET), as a Specially Designated National (SDN). This designation generally prohibits U.S. entities from transacting with CUPET and may result in secondary sanctions. Melbana, which holds a 30% interest in the PSC, is currently reviewing the implications of this designation and has engaged external legal counsel and sanctions experts to assess the potential impact on its operations and contractual obligations. Operations under the PSC have already ceased due to non-payment of cash calls by a joint operations partner, and Melbana has instructed its expatriate personnel and contractors to leave Cuba.
Outlook
Melbana is seeking further guidance from its advisers and will update the market as appropriate.
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