Cuba's oil, gas production rising, Politburo member says

Cuba is producing nearly 50% of the oil and gas it consumes, according to Carlos Lage Davila, a member of the country's Politburo and secretary of the Council of Ministers' Executive Committee.

Eric Watkins
Senior Correspondent

LOS ANGELES, July 26 -- Cuba is producing nearly 50% of the oil and gas it consumes, according to Carlos Lage Davila, a member of the country's Politburo and secretary of the Council of Ministers' Executive Committee.

Lage made the claim July 21 in the Havana municipality of Santa Cruz del Norte at the end of a tour through facilities belonging to Western Petroleum Drilling & Extracting Enterprise (EPEP).

He said EPEP operations in 2007 produced an additional 85,000 tonnes of oil and 98 million cu m of gas compared with 2006, surpassing the government's production plans and guaranteeing gas delivery for electric power production and residential use.

Earlier this year, officials said the country produced about 65,000 b/d of oil, much of it for electric power production, and 3.45 billion cu m/day of gas—of which about 335,000 cu m/day go directly to Havana for home use by almost 1 million people.

On his visit to EPEP, Lage said new exploration wells are being completed, which will increase the country's reserves and maintain current production levels.

Lage also stressed that Cubans are increasingly able to service their own oil and gas industry. Until now, he said, Cuba depended on foreign companies for drilling rigs, repairs, and cement and other supplies. The country currently has 12 rigs, he said, which allows it to assume control of wells belonging to Cuba's state-owned Cuban Petroleum (Cupet) and to lease rigs to foreign companies.

Lage said, "We have five machines to repair wells [and] another two for the cementing processes. All this shores up our own capacities, and it is something that we must continue to make progress on."

Still, foreign companies are responsible for most of Cuba's production, and Cuban officials are seeking additional foreign investment of some $300-400 million to raise oil and gas production to 100,000 boe/d from 85,000 boe/d by 2009.

Cuba's largest producer is Sherritt International Corp, Toronto, which holds 40-100% indirect working interest in 10 production-sharing contracts. Most of Sherritt's Cuban oil production is derived from near-shore oil fields at Yumuri, Varadero, Canasi, and Puerto Escondido. Average net production in 2006 was 30,000 b/d.

Another 19,500 b/d of oil comes from operations on Block 7 run by Pebercan, Montreal, which specializes in exploration and production in Cuba.

In June, while announcing further investments by Sherritt, Lage said about 39 oil wells would be drilled this year—13 by Cupet and 26 by foreign firms.

Repsol-YPF SA, India's ONGC Videsh, and Norsk Hydro AS have plans to explore for oil beginning in 2008, while Vietnam's state-owned Petrovietnam is expected to sign in the near future, following a cooperation agreement inked last October with Cupet.

Last year, Venezuelan state-owned Petroleos de Venezuela SA formed a joint venture with Cupet to revamp the unfinished Cienfuegos refinery (OGJ, Apr. 17, 2006, p. 28). Current reports say the project is on schedule to start by yearend 2007 or early 2008. Initial production, according to officials, will be around 65,000 b/d.

Contact Eric Watkins at hippalus@yahoo.com.

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