cuba looking good

What seemed ugly at the time looks like being swan...

MEO gets a mention at the end of the article !

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Cuba's new era could extend to oil



US-Cuba relations: Entering new period of diplomatic normalisation
Franklin Reyes
Kathrine Schmidt
19 December 2014 23:14 GMT
A historic rapprochement between the presidents of US and Cuba this week could help pave the way for renewed interest in the island nation’s nascent oil sector, sources tell Upstream.
While the US Congress would have to lift existing trade embargo to usher in major new partnerships, less-restricted travel and the beginnings of trade activity are expected to create new openness between Cubans and potential partners as well as new meetings to explore opportunities.
“I know firms, both upstream and downstream, that can’t wait to start working in Cuba,” said Jonathan Benjamin-Alvarado, professor of political science at the University of Nebraska who has long studied Cuba and its energy sector.
"...It's a great opportunity to get into the weeds and figure out what exactly is available for US companies. There will be no lack of interest, I guarantee you.
"...The game will be different with broader opportunities and not as many restrictions."
Presidents Barack Obama and Raul Castro on Wednesday announced the two countries would resume diplomatic relations after half a century, following 18 months of negotiations assisted by Pope Francis and Canadian officials.
Cuba is in the increasingly precarious situation of heavy dependence on oil imports by fellow leftist regime Venezuela, which has struggled to keep up production as it economy has increasingly floundered under Hugo Chavez successor Nicolas Maduro.
A crash in oil prices has matters worse, with reports indicating the Petrocaribe supply programme to the Caribbean may be on shaky ground.
About a decade ago then-leader Fidel Castro began a push for Cuba to tap more of its own reserves, leading to lease offerings for 59 blocks that attracted players including Spain's Repsol, Norway's Statoil, India's ONGC and Petrovietnam.
But the sector has largely struck out on high-profile exploration offshore while also struggling with a lack of investment and technology.
A 2012 Repsol-led deep-water wildcatting drive resulted in three dry holes, the second and third drilled by Petronas and PDVSA. It also caused a kerfuffle with US officials worried about environmental management in the event of a spill. An earlier 2004 well by Repsol was also non-commercial.
Russia's Zarubezhneft tried again in 2013 but delayed its plan after the semi-submersible Songa Mercur rig was hit by a blowout preventer problem.
Brazil's Petrobras in 2011 ditched a 2008-acquired Cuba block citing what it called poor prospectivity.
That is not for lack of geological potential. Cuba is estimated by the US Energy Information Administration to have proven reserves of 124 million barrels of oil, while the US Geological Survey in 2004 estimated 4.6 billion barrels of undiscovered resource.
Cuba's own estimates have been higher at around 20 billion barrels.
Gulf Coast entities including ports and service companies from Alabama to Texas are keen for new markets nearby, such as the development of an oil-service port in the town of Matanzas, Benjamin-Alvarado said. That trade relationship in some cases predates the 50-year embargo.
There was also international oil major interest but companies feared running afoul of US laws.
“There’s ample opportunity for the big oil companies to come in… and then all the auxiliary services, port services, emergency services," Benjamin-Alvarado added. "It becomes a big ticket issue when you put all that together."
State explorer Cupet has favoured multiple long wells from onshore tapping into near-shore offshore reserves, an opportunity where some believe significant oil deposits could still lie, says Jim Flanagan, a regional research manager for the Carribbean with the IHS consultancy.
Cuba has also been keen to explore the its shale potential, forming an alliance with Zarubezhneft to help with a pilot project in the Boca de Jaruco field east of Havana.
Outside companies who have found a niche in the market include Canada’s Sherritt, the largest producer in the island nation, as well as MEO Australia, which earlier this month signed a production-sharing contract for an onshore drive.
Cuba produces about 51,000 barrels per day of its own oil with consumption of about 171,000 bpd, according to the US Energy Information Administration.
It still remains unclear what aspects of trade will or will not be possible under the new agreement, as that will come down to the specifics of regulations hammered out by the US Department of Commerce, Benjamin-Alvarado said.