Sonangol to revive oil exploration off Cuba

OREANDA-NEWS. July 21, 2015. Angola's state-run Sonangol and its Cuban counterpart Cupet are concluding arrangements to restart Cuba's stalled deepwater exploration campaign, a Cupet official told Argus today.

But there continues to be "little interest" from US firms despite "an open invitation" from Cuba, the official said. "We want to ensure all is in place for interested companies if and when the US lifts its damaging economic embargo on our country."

Cuba and the US today reopened embassies in Havana and Washington, after over 50 years of broken relations.

Sonangol and Cupet plan to start work in 2016 on two of four blocks in Cuban waters of the Gulf of Mexico for which the firms signed contracts in 2010.

Cuba's deepwater exploration program was suspended in 2012 after several foreign companies struck dry holes.

The Sonangol-Cupet agreement was concluded in Luanda last week during a visit by Cuba's vice president Ricardo Cabrisas Ruiz, the Cupet official said.

"The matters to be determined include which of the blocks contracted by Sonangol will be drilled, the sourcing of a rig and the timing of the start of the work," the official said.

Sonangol contracted four blocks - N16, N23, N24 and N33 – off the northwestern coast, close to the maritime border with the US.

Sonangol could not be reached for comment, but the company?s prospects for a commercial strike in Cuban waters "appear to be good," Angola's ambassador to Havana Jose Cesar Augusto Kiluanje said.

Spain's Repsol, Venezuela's PdV, Malaysia's Petronas and Russia's Gazpromneft were among the foreign companies that failed to find commercial quantities of oil under the previous campaign.

The US Geological Survey estimates that the Cuban side of the Gulf of Mexico could hold around 9bn bl of oil equivalent of technically recoverable resources.

Cuba produces around 50,000 b/d of liquids and 20,000 boe/d of natural gas from onshore and shallow water reservoirs, according to the USGS.

The island imports around 80,000 b/d of oil from Venezuela on preferential terms.

Oil companies from Russia, Canada and Australia are currently exploring and producing oil and gas from onshore and shallow water blocks.

Cuba courted several US oil companies in May at a meeting of foreign geologists in Havana.

There will be heightened US upstream interest in Cuba "if the US lifts its economic embargo and if oil prices increase," Cupet chief executive Pedro Sorzano told the meeting.

Cupet did not disclose the names of the companies that attended.