HAVANA, 31 Mar. (argusmedia) Cuba is seeking to revive an offshore drilling campaign through a roadshow to be held during a high-level western hemisphere conference in Panama on 10-11 April.
The move coincides with a thaw in diplomatic relations between Havana and Washington, and the prospect of an end to a longstanding US economic embargo on Cuba that has forestalled US investment.
Havana´s bid to rekindle interest in offshore acreage also runs parallel to the opening of Mexico´s oil sector. A first-ever licensing round featuring Gulf of Mexico blocks in Mexican waters kicked off in December 2014.The Summit of the Americas will be attended by US President Barack Obama and Cuban President Raul Castro. Leaders of several major firms will attend the summit’s business session when the roadshow will be held.
“We will explain our results in deepwater exploration in recent years,” says Rafael Tenreyro, exploration director of Cuba´s state-run Cupet. “We will also explain our onshore and shallow water hydrocarbon potential, and new incentives for foreign investors.”Cuba previously offered 59 Gulf of Mexico blocks, but exploration stalled in 2012 after several foreign companies encountered dry holes.
Among the firms that failed to find commercial deposits in earlier exploration efforts were Spain’s Repsol in a consortium with India’s state-controlled ONGC and Norway’s Statoil; Malaysia’s state-owned Petronas and Venezuela’s state-owned PdV.Cuba’s national assembly approved a new investment code for the energy sector in March 2014 that allows foreign investors to negotiate tax rates with state agencies, with a levy of up to 22.5pc on profits, compared with a previous 25-50pc.
Oil companies from Russia, Canada and Australia are currently exploring and producing oil and gas from onshore and shallow water blocks.Cuba produces around 50,000 b/d of liquids and 20,000 boe/d of gas from onshore and shallow water reservoirs, according to the US Geological Survey (USGS).
A 2004 USGS assessment of the North Cuba basin and its three sub-basins estimated the total amount of undiscovered technically recoverable resources at 9.8 trillion ft3 of undiscovered gas, 4.6bn bl of crude oil, and 0.9bn bl of NGLs.
The island imports around 77,000 b/d of oil from close ally Venezuela on preferential terms.