Report: Cuba boosts oil, gas production slightly

Cuba’s crude oil production saw an increase in 2010, rising to 52,623 b/d from the 47,517 b/d produced in 2009, according to a recent study of the Caribbean nation’s oil and gas industry.

“This new production was predominantly as a result of new record breaking 6,000 m horizontal drilling coastal prospects around the town of Camarioca, east of the beach resort of Varadero in Matanzas province,” said the report’s author, Jorge R. Pinon, a research fellow with the Cuban Research Institute at Florida International University.

State-owned Cubapetroleo SA’s (Cupet) gross working interest in 2010 was 31,419 b/d, while Canada’s Sherritt International’s gross working interest was 21,204 b/d, according to the report.

Estimates of oil in place for Cuba’s northern oil province range from 1-2 billion bbl, with recovery ratios of between 6-7% of OOIP determined by the viscosity of the oil and the permeability of the rocks.

According to Pinon, future production is expected to increase as a result of planned enhanced oil recovery projects between Cupet and Russia’s Zarubezhneft in Boca de Jaruco field.

Meanwhile, the report states that associated natural gas production seemed to be reaching a plateau of 38 bcf/year as a result of the maturity of the Varadero and Puerto Escondido oil fields.

Cuba saw its associated gas production increase by more than 40%, from 26 bcf in 2005, as a result of its Energas joint venture with Sherritt.

Demand down

Cuba’s oil demand has been on the decline over the last 5 years primarily as a result of conservation efforts and increases in fuel and electricity prices reflecting international market conditions.

In 2010, oil demand of 137,025 b/d reflected a decrease from the 2009 demand level of 139,651 b/d, the report states.

More than 65% of total demand, or 89,868 b/d, was met by high-sulfur residual fuel oil/crude oil blend, which is used as boiler fuel for the electric power industry, as well as the steel, mining, and cement industries.

At 26,453 b/d, diesel represented the second-largest petroleum demand product, used by the commercial land transport and rail industries.

Motor gasoline consumption stood at just 6,184 b/d, representing the lack of a private-sector vehicle fleet.

Cuba’s Havana and Santiago de Cuba refineries continue to run intermittently, each averaging about 22,000 b/d, well down from their respective boiler plate capacities of 100,000 b/d.

The revamped, Russian-built 65,000 b/d Cienfuegos refinery, today a nearly equal joint venture of Cupet and Venezuela’s Petroleos de Venezuela SA, ran 55,295 b/d in 2010 compared with 57,316 b/d in 2009.

The Cienfuegos refinery is in a hydroskimming configuration with a reformer, but with two naphta and distillate hydrotreating units, which have not been revamped and are not operating—rendering substandard diesel and gasoline, according to regional specifications.

Cuba imported a total of 113,000 b/d of refined products and oil from Venezuela in 2010 compared with 112,000 b/d in 2009, according to the 2010 financial reports of PDVSA.

Imports of Venezuela’s refined products—including aviation fuel, LPG, lubricant base stock, diesel, and fuel oil—amounted to about 14,000 b/d in 2010 up nearly 60% from about 9,000 b/d in 2009. Venezuela’s Mesa 30 crude oil imports amounted to 99,000 b/d in 2010 from 103,000 b/d in 2009.

Most of Cuba’s Venezuelan petroleum import volumes of 93,000 b/d arrive under terms of the Convenio Integral de Cooperacion Economica (Caribe)—a barter agreement with subsidized payment terms signed by both countries in October 2000.

The report states that 20,000 b/d of Cuba’s total imports of Venezuela’s oil represent PDVSA-Caribe equity tolling volumes which are exported to regional and West African markets via tenders to international oil trading companies.

Two years ago, Venezuela asserted plans to invest $10 billion in downstream projects in Cuba by 2015 through a unit of PDVSA working with Cupet. But with oil prices low, however, there were questions whether all or any of the projects would be funded (OGJ Online, May 4, 2009).

Contact Eric Watkins at hippalus@yahoo.com.

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