Cuba plans to attract foreign investment to increase oil production, reserves

Source: Xinhua| 2019-04-06 16:49:47|Editor: Xiaoxia
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by Raimundo Urrechaga

HAVANA, April 5 (Xinhua) -- Cuba seeks to expand foreign investment in the sector to increase exploration, production and refining projects across the island, a senior industry official told Xinhua in a recent interview.

Osvaldo Lopez, head of exploration at the state-owned oil firm Cuba Oil Union (CUPET), Cuba's largest oil company, said the country expects to sign at least five new contracts with foreign companies in the next three years and start a new drilling campaign in the island's Exclusive Economic Zone (EEZ), whose estimates exceed 15 billion barrels of oil.

"We hope that during this period we will have the first oil discovery in deep waters in Cuba that will allow a greater opening for foreign investment because it reduces the exploratory risk and would change the whole scenario for the country," he said.

Currently, two foreign companies, Venezuela's state-owned oil company PDVSA and Angola's Sonangol, have contracts with CUPET in this area and in the coming weeks will begin the bidding process for 24 of the 59 blocks that make up the EEZ in the Gulf of Mexico.

Lopez said that in the field of offshore and land exploration, there have been positive experiences with foreign companies like Canada's Sherritt International, which recently signed a contract to explore five blocks of the island's northern oil belt, while Australia's Melbana Energy Limited opted for an extensive zone in western Cuba.

"Cuba has great potential in the exploration of oil and gas and from our perspective it has been an attractive return over the years and we see that our investments not only benefit the development of the country, but also us as a company," said Curtis Evert, Sherritt's vice president of exploration.

The Canadian company has been operating in the Caribbean nation in the last 27 years and has produced more than 227 million barrels of oil in the wells it explores and drills on the north coast of eastern Havana, he told Xinhua.

Australian public company Melbana Energy has had agreements with its Cuban counterpart since 2015 and is currently in the first phase of exploratory studies at block number nine in Cuba's western provinces of Matanzas and Villa Clara.

A block refers to an area of 2,380 square km that has a very high likelihood of containing good quality oil.

"The total volume of probable reserves in this area is more than 700 million recoverable barrels of oil, a figure which has been certified by international companies," Rafael Tenreyro, Melbana's office manager in Cuba, told Xinhua.

Lopez said CUPET has also signed contracts with Russian companies Zarubezhneft and Rosneft, as well as Australia's Petro Australis Limited, aimed at increasing oil production in the Caribbean nation.

Foreign participation, according to the CUPET official, is vital for Cuba's goal to achieve energy self-sufficiency in the coming years.

In that regard, last December, Jesus Marrero, head of business at CUPET's exploration and production department, disclosed new opportunities for foreign investment in the sector. New land and exploration contracts, production improvement and non-conventional oil projects will be available in the Cuban oil industry.

According to official figures, Cuba has a production potential of 16 million barrels of oil per year, as well as a significant amount of gas production to generate electricity and domestic consumption.

Cuba currently produces 57,500 barrels of oil equivalent per day and this volume covers 60 percent of the national demand.