Tuesday, August 2, 2011

Russia's Gazprom Neft gains stake in four deepwater blocks offshore Cuba

With the approval from the Cuban authorities, Russian firm Gazprom Neft has gained interest in four deepwater oil and gas exploration blocks offshore Cuba.

Gazprom Neft, Cuba's national oil company Cubapetroleo (Cupet) and Malaysia's national oil company Petronas have signed a Supplementary Agreement to the Production Sharing Contract (PSC) on four blocks in the Gulf of Mexico offshore Cuba.

Through the agreement, Gazprom will now hold a 30 percent stake in deepwater Blocks 44, 45, 50 and 51 of the Exclusive Economic Zone of the Republic of Cuba. Petronas holds the remaining 70 percent interest in the project.

According to Oil & Gas Journal, the blocks are located 100 to 200 miles west of Havana.

Cuban Timeline

To date, 2D seismic has been performed across the acreage, and as of November 2010, an exploration well was scheduled for drilling in 2011.

In addition to the exploration and development of the blocks, the agreement allows for the production of oil through 2037 and the production of natural gas through 2042.

Petronas signed the PSC with the government of Cuba in 2006, and in October 2010, Gazprom Neft and Petronas signed a farm-out agreement and a Heads of Joint Operations Agreement on the leasehold.

After receiving approval from the Cuban authorities, Gazprom Neft and Petronas signed a Deed of Assignment, as well as a Joint Operating Agreement in July 2011.

“This partnership with Petronas will help Gazprom Neft to enforce its competence in the sphere of deepwater development and expand its expertise in projects outside of Russia,” said Alexander Dyukov, chairman of Gazprom Neft. “By 2020, we plan to have about 10 percent of our overall production from overseas projects.”

International Interest Offshore Cuba

While US firms are prohibited from operating in Cuba, many international oil and gas producers are eager to explore the Gulf of Mexico offshore Cuba. 

Following an oil discovery in 2004, Spanish operator Repsol has contracted the newbuild deepwater semisub Scarabeo 9 to drill for oil offshore Cuba. The rig constructor Keppel FELS reported that the rig is nearly ready.

Having drilled in Cuba before, Brazilian major Petrobras (NYSE:PBR) has also signed a joint oil and exploration production agreement for Block 37 offshore Cuba, and Venezuela's state-run firm PDVSA has also said that it will explore offshore Cuban waters for oil and gas.

By Phaedra Friend Troy

Source: PennEnergy

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