According to World Oil, MEO Australia has concluded terms and executed the Cuba Block 9 Production Sharing Contract (PSC) with the national oil company Cuba Petróleo Union (CUPET). The block 9 onshore contract contains the large Veradero oil field and other discoveries.
Specific terms of the contract are unknown, but the timing appears to symbolic of Cuba’s willingness to attract foreign investment. With the recent decline in the price of crude, MEO Australia must have been incentivized to accept price and political risk. According to Jorge Piñon, Director of Latin America and Caribbean Program at the Center for International Energy and Environmental Policy at The University of Texas at Austin, oil needs to be at $70-$75 a barrel for economic feasibility in Cuba.
According to MEO’s Managing Director and CEO Peter Stickland, “We are delighted to complete the execution of MEO’s first oil and gas block in Cuba. As an early mover into Cuba, MEO is now one of the few western companies with a footprint in the expanding Cuban hydrocarbon sector. The geology of the block has analogies to petroleum systems in which MEO’s technical personnel have significant experience, and we see substantial potential in Cuba overall and Block 9 in particular.”
In 2004, the USGS released an assessment of the North Cuba basin and its three sub-basins. The assessment area covered the northern one-half of the island and the portion of Cuba’s maritime Exclusive Economic Zone (EEZ) that extends into the Gulf of Mexico to the north, northwest, and west of the island. The total amount of undiscovered technically recoverable hydrocarbon resources was estimated to be 9.8 trillion cubic feet of natural gas, 4.6 billion barrels of crude oil, and 0.9 billion barrels of natural gas liquids (U.S. Geological Survey, 2004).
The Safe Seas — Clean Seas symposium, will be held in Havana from October 18-21. While the symposium will not address wider issues of investment in the production side of the equation, the agenda calls for multinational oil spill response protocols, blowout prevention technology and environmental preservation. One of the key symposium partners is CubaPetroleo (CUPET), the national oil company responsible for upstream and downstream operations in Cuba.