North America: Cuba

NORTH AMERICA

Cuba

Mexico and Venezuela renewed the 20-year-old San Jose accord, which calls for the two oil-rich nations to loan oil to poorer Caribbean / Central American nations under generous terms. Despite Venezuelan President Victor Chavés’ friendship with Fidel Castro, Cuba was excluded from the accord. Nevertheless, according to reports in September 1999, Venezuela is unilaterally selling 40,000 to 60,000 bopd to Cuba under undisclosed terms. In November, Cuba announced that the two countries would upgrade and jointly operate an outdated Cuban oil refinery.

Exploration. Cuba will offer production-sharing agreements to foreign companies in 59 deepwater Gulf of Mexico blocks covering 42,500 sq mi. CGG is acquiring 4,000 mi of 2-D seismic, and data packages should be ready in November 2000. No bidding will be allowed, as each contract must be negotiated separately with state oil firm Cubapetroleo.

Canadian-based Sherritt followed last year’s Canasi 1 discovery with its Canasi 2 appraisal in July 1999. The shore-based, deviated well was drilled to 9,292-ft MD and found pay at 6,414-ft TVD. The well, offshore Varadero in Block 7, was last reported flowing 2,500 bopd. Another discovery in the same block, Seboruco 1, also tested 2,500 bopd in January 2000.

Tiny and debt-plagued, Canadian-based Genoil drilled Angeleto-IX in December – its second dry hole in Cuba. Beau Canada Exploration rescued the company from receivership in March 1998 and now holds a majority interest. Genoil holds most of Blocks 19, 20 and 22, and is weighing its options for continuing Cuban exploration.

Brazil’s Petrobrás shot seismic last year on Block 50 and Block L offshore the north central coast. It plans to spud a deviated wildcat from Felipe El Grande Island late this fall.

Drilling/development. In 1999, Sherritt invested $40.2 million in Cuban operations and drilled six development wells, one appraisal and three successful exploration wells. Sherritt’s Cuban production increased for a third consecutive year in 1999, averaging 13,143 bopd, up 69% from 1998. About two-thirds of the increase came from a full year’s production from new wells on Puerto Escondido and Varadero West Blocks. Contributed to the remaining increase were new wells in Yumuri, Casani and Seboruco on the northern coast that went onstream during 1999.

Sherritt and partners, Pebercan and Maurel & Prom, drilled Seboruco 2 and Seboruco 3 appraisal wells in spring 2000; both are producers. Total Block 7 output now exceeds 6,000 bopd. Production bottlenecks at oil-treatment facilities and pipelines will be alleviated when these facilities are upgraded this year. This will allow further field development and production increases. About 20 wells will be drilled in Cuba this year, on par with last year.