More information has come to light on Cuba's first offering of exploration and production rights.
Eleven blocks on offer range in size from 1,400 to 6,000 sq km.
State oil company Cubapetroleo SA (Cupet) said applications for any number of the blocks can be submitted by single companies or groups in what is planned as the kickoff event in a series of acreage offerings (OGJ, Feb. 22, Newsletter).
Deadline for receipt of bids at Cupet's Havana headquarters is 5 p.m. Aug. 2. Successful bidders will sign production sharing contracts (PSCs) with Cupet. PCSs will be for no more than 25 years, with 4 years allotted for exploration.
The state will receive 11% of all hydrocarbons produced from the blocks, and a tax of 30% will be levied on yearly net profits.
THE SETTING
Cuba can be divided into two major hydrocarbon provinces, Cupet said. The North Cuban province involves mainly pre-Campanian deposits, while the South Cuban province forms part of the Caribbean plate.
Most fields and discoveries to date lie in the northern sector. Produced oil gravities vary considerably, from 10 in Varadero field to 60.5 in Motembo field.
"Only a small portion of the prospective sedimentary area has been adequately explored," Cupet said, "but with application of modern technology it is anticipated that substantial additional reserves can be found."
Cuba's complex geology presents "a number of exploration challenges."
The state company has been restrained to date by limited funds and technology.
Technical data are available from Simon Petroleum Technology Ltd. (SPT), Llandudno, U.K. SPT is marketing a report on Cuba's geology and hydrocarbon potential, along with data packages for each block. The packages contain seismic sections, well logs, and geochemical and core analyses.
Purchase of the report and data packs is a requirement for bidding.
Details of bidding application requirements are available from Cupet or SPT.
INFRASTRUCTURE
Jesus Perez Othon, Cuba's first deputy minister of basic industry, told delegates at presentations in London and Calgary that Cuban oil production is modest but increasing.
"In the last few years more than 20 oil fields have been discovered," Perez said. "The largest, Varadero, has in-situ reserves of 1.1 billion bbl. Production in Cuba is about 20,000 b/d, and it is foreseen that this figure will be doubled by the end of the year.
"Oil production for 1993 was estimated at 9.5 million bbl minimum. This will be used to generate 40% of Cuba's electrical power requirements. Cuban industry has the potential to assimilate up to 22 million bbl/year of oil."
Cuba has four refineries with combined capacity of more than 220,000 b/d. Plant sites are in Havana, Santiago de Cuba, Cienfuegos, and Cabaiguan. A tanker terminal for vessels as large as 150,000 dwt was recently built. There are a further 11 marine terminals and 18 onshore storage sites.
"The installed industrial capacity enables an annual production of 180,000 tons of lubricating oil, rerefining of 50,000 tons of used oil, and 6,000 tons of greases," Perez said.
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