Sherritt resumes Block 10 drilling in Cuba

Sherritt International Corp., Toronto, has resumed drilling of its second exploration well on Block 10 in Cuba after suspending work last year to study wellbore targeting.

It’s drilling the well directionally from land to test Upper Jurassic-Lower Cretaceous Lower Veloz carbonate in the Bay of Cardenas (OGJ Online, Sept. 21, 2017).

In its financial report for this year’s second quarter, Sherritt said it sidetracked the well and is using “additional technology specifically designed for drilling wells in lost circulation zones.”

It’s working under a production-sharing contract it entered in 2014 with state-owned Cubapetroleo SA. In an earlier financial report it said results of the first two Block 10 wells will help “determine future capital allocation.”

Sherritt produces oil from the Puerto Escondido and Yumuri blocks, which are adjacent to each other on the coast west of Block 10 and covered by a PSC extended by 3 years earlier this year to 2021. The PSC for another coastal block, Varadero West between Block 10 and Puerto Escondido-Yumuri, expired last November.

Sherritt also has onshore exploration acreage in Block 8A southeast of Havana.

In the second quarter, gross working interest production from Sherritt’s holdings averaged 4,689 b/d of oil, down 68% from second-quarter 2017 because of expiration of the Varadero West PSC, natural declines, and the absence of development drilling.

Oil and gas production net to Sherritt’s interests dropped to 1,821 boe/d from 8,805 boe/d over the same period because of the Varadero West expiration, a decrease in the company’s profit-oil percentage on renewal of the Puerto Escondido and Yumuri PSCs, and higher oil prices.