Cuba Opens to Brazil’s Petrobras
HAVANA CUBA INVESTMENTS – Brazilian state-controlled energy giant Petrobras has opened an office in Cuba to “accompany” its effort to explore for oil in the communist-ruled island’s territorial waters, the company’s new representative in Havana said.
Joao Figueras, who also is CEO of Petrobras’ Venezuelan unit, told a press conference that the office will be “a point of reference” during the first exploratory phase, but that if a decision is made to advance to the drilling stage the company will expand its representation in Cuba.
For the moment, Petrobras has decided that its Caracas team will carry out the technical work in Cuba “with a view to cost management and efficiency.”
The Brazilian company currently is analyzing the results of seismic surveys carried out within the block it acquired last October in deep Cuban waters of the Gulf of Mexico.
Following geological and geophysical studies in the area, Petrobras will have until May 2010 to decide whether to begin drilling, according to the terms of its contract with state-owned Cuba Petroleo, or Cupet.
“This block represents the company’s return to Cuba. For now we’re going to manage that, but we’re open to evaluating other opportunities in the country,” Figueras said, noting that Petrobras searched for oil in the island’s territorial waters between 1998 and 2001.
“It was a perfect operation, but unfortunately the well was dry,” he said.
The Brazilian company currently has a 32-year exploration and production agreement with the Cuban government, allowing it to operate in a 1,600 square-kilometer (617-square-mile) block that Figueras said is “very well located from a geological point of view.”
Figueras said the trade and financial embargo the United States has imposed on Cuba since 1962 creates “a series of difficulties” but does not impede Petrobras’ work, adding that the company has found “solutions and paths” to drilling in Cuba in the past using contracted platforms.
“If we make the decision to drill, the company will have the means to carry out the drilling. That’s why our job now is to be very focused on the geophysical-geological work so that we make the best decision,” he added.
Also operating in Cuba’s portion of the Gulf of Mexico, an area known as the Exclusive Economic Zone that measures some 112,000 square kilometers (43,245 square miles), are Spain’s Repsol-YPF, Norway’s Statoil-Hydro, India’s Oil and Natural Gas Corporation, Malaysia’s Petronas, Venezuela’s PDVSA and Vietnam’s PetroVietnam.
Petrobras was the most recent company to acquire a block in the EEZ, bringing to 21 the number currently under contract.
Petrobras, an integrated energy company and a global leader in deepwater oil exploration and production, operates in 27 countries in the Americas, Africa, Asia and Europe.
Shares of Petrobras, Brazil’s largest corporation, trade on the Sao Paulo, New York, Madrid and Buenos Aires stock exchanges, but the Brazilian government retains control through a golden share.
Cupet’s exploration manager, Rafael Tenreyro, said last November that – based on “very modest” estimates – about 20 billion barrels could lie in the island’s offshore fields, while the U.S. Geological Survey has estimated a more modest total of between 4.6 billion and 9.3 billion barrels of recoverable crude.
Cuba currently imports from close ally Venezuela more than 90,000 barrels per day of crude oil – or about half the island’s needs – under preferential terms that allow the island to pay with medical, educational and sports services.
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