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Wednesday, March 18, 2009

Russians eye Cuba offshore oil deal

03-17-2009 - Upstream OnLine - A Russian consortium is looking at leasing up to 15 blocks covering a total of 15,440 square miles (40,000 square kilometres) for oil exploration in Cuba's part of the Gulf of Mexico, a Cuban oil official said today. Companies from China and Angola are negotiating deals for oil blocks in Cuban waters, which abut those of Mexico and the US, said Manuel Marrero Faz of Cuba's Ministry of Basic Industry. He said the Russians are studying the region off the communist island's northwest coast for oil potential before deciding which of the blocks they would like to lease, said a Reuters report. "Soon we'll meet to negotiate the contract terms," he told reporters at an international geology conference in the Cuban capital. He did not name the companies but said the Russian government had put together a consortium of the country's five biggest energy companies. Marrero said the China National Petroleum Corporation and Angola's national oil company also were taking a look at blocks for possible lease, but he said their plans were less expansive than the Russians. The US has vast oil and gas fields in the Gulf of Mexico, but its energy companies cannot do business in Cuba because of the 47-year-old US trade embargo against the island. Cuba is just 90 miles from Florida's Key West. Cuba has divided its share of the gulf into 59 blocks, 21 of which are already under lease to seven companies. Marrero said Cuba was in negotiations to lease another 23, including the 15 for the Russians, and had another 15 still available. Cuba produces about 60,000 barrels of oil per day, from wells drilled onshore, but says it may have 20 billion barrels of oil in its offshore fields. So far only one test well has been drilled, that in 2004 by a consortium led by Repsol YPF. Repsol has said it will drill a second well this year, which Marrero said must happen by June or July under the terms of its contract with Cuba. He also said PDVSA plans to sink its first exploratory well in Cuba's offshore fields next year. An official for Brazil's Petrobras told the conference that the company plans to begin seismic surveys soon of the single block it has leased off Cuba's northern coast.

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