9 November 2015: “Cuba is organising a new search for oil in the Gulf of Mexico after four earlier exploratory wells failed to make commercially viable finds, a state official said Monday.
The new round of drilling in Cuba's exclusive economic zone in the Gulf of Mexico is set to begin in late 2016 or early 2017, said Osvaldo Lopez, head of offshore exploration at state oil company Cupet.
He told state television that Venezuela's PDVSA and Angola's Sonangol will drill for oil at depths of 1,500 meters (4,900 feet). "We have evidence there are deeper areas generating that oil. What we're trying to do is find a way to get to it," he said.
International experts say the area probably holds five to nine billion barrels, while the government estimates there are as many as 15 billion barrels in untapped reserves. Cuba's exclusive economic zone in the Gulf of Mexico covers 112,000 square kilometers (43,250 square miles).
PDVSA, Spain's Repsol, Russia's Gazprom Neft and Malaysia's PC Gulf have previously drilled offshore wells, but concluded they were not commercially viable.
Cuba produces about 25 million barrels of oil a year from wells on land and offshore, but that covers less than half the island's consumption. The rest it imports from Venezuela on favourable terms of payment.
Cuban crude is for the most part extra-heavy and used only for electric power generation and the production of cement, lubricants and asphalt. Last month, Cupet said it was open to negotiating exploration deals with US oil companies.”
From The Wall Street Journal
16 November 2015: “Oil prices are currently trading slightly above $40 a barrel- their lowest levels since August- and more investment banks, energy companies and analysts don’t see the price rising above $60 a barrel until 2017. The International Energy Agency said Tuesday oil prices would slowly rise to $80 a barrel by 2020, but also outlined a scenario in which they stayed at $50 a barrel.”
From an oil industry observer:
“The dependency for oil by the Republic of Cuba on Venezuela (US$1.8 billion cash flow) continues to be a concern on both sides of the Florida Strait. Regrettably, after four failed attempts in 2012, deep-water oil exploration is not going to be the solution.
There remain “expectations” that Angola’s Sonangol will drill sometime in 2016-2017. However, Sonangol is not a deep-water operator- they own 40% of Angola’s deep-water production, but are not the operators. Chevron, Total, Exxon ENI and others are the IOC (international oil company) operators and they each have deep-water drilling expertise.
The Republic of Cuba also faces the challenge of low oil prices as deep-water (1,500 meters or more) generally requires a breakeven per barrel price of approximately US$72.00 and competition from Mexico, where their Gulf of Mexico geology is well-known and costs can be shared by IOC’s operations in the U.S. Gulf of Mexico.”