Little-known Sydney-based company Melbana began production on Wednesday at what could be a large oil field on the north coast of the Caribbean country.
Andrew Purcell, a former junior Macquarie investment banker, said that the energy company he chairs began pumping oil from a well in Cuba this week, a step towards obtaining the 267 million barrels his geologists estimate could be extracted from the field.
But Melbana is only valued at $250 million on the ASX because it owns 30 per cent of the field, and investors are uncertain it will ever extract the oil and sell it. Angola’s national oil company, Sonangol, owns the rest. Melbana began production in Cuba on Wednesday, according to Mr Purcell, whose stake is worth $17 million. He said the company intended to initially pump small amounts of oil out to test its equipment, storage tanks and procedures.Until Melbana declares the oil field “commercial,” it won’t get paid for the oil, which will be held by the Cuban government.
In 2014, the National People’s Power Assembly introduced a law allowing, “on an exceptional basis”, foreign corporate ownership of Cuban property. The law led to an influx of investment.
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