October 16, 2008 / 9:42 PM / 10 years ago

Cuba says may have 20 billion barrels of oil offshore

HAVANA (Reuters) - Cuban oil officials said on Thursday that Cuba may have more than 20 billion barrels of recoverable oil in its offshore fields, more than twice the maximum estimate of the U.S. Geological Survey.

Such a large oil find would likely make Cuba an oil exporter and bring prosperity to the communist-run island that now imports half its energy needs. Officials said they hoped to drill the first production wells next year.

The estimate, unveiled at a Cubapetroleo, or Cupet, news briefing, is sharply higher than the maximum of 9 billion barrels the U.S. Geological Survey has said may lie beneath Cuban waters.

Cupet exploration manager Rafael Tenreyro Perez said Cuba’s estimate was higher because the Cubans had better information about their offshore geology.

“We have more data. I’m almost certain that if they (U.S. Geological Survey) ask for all the data we have, (their estimate) is going to grow considerably.”

The U.S. agency has also said Cuba could have as much as 21 trillion cubic feet of gas, but Tenreyro said Cupet did not have an estimate for offshore gas reserves because they were too difficult to figure out.

Cuba’s oil estimates are based mostly on comparisons to how much oil is being produced from similar geological structures off the coasts of Mexico and the United States, Tenreyro said.

Cuba has undersea geology “very similar” to that in Mexico’s giant Cantarell oil field in the Bay of Campeche, he said.

Tenreyro said he expected the first production well to be drilled in mid-2009 and that several more wells could be started before next year is through.

A consortium of companies led by Spanish firm Repsol did earlier test wells and is expected to drill the first production well, which had been postponed from this year because of the difficulty of getting a drilling rig, Tenreyro said.

PRODUCTION-SHARING

High oil prices have prompted more drilling activity worldwide and made rigs very expensive and hard to find, he said.

Even if drilling begins next year as planned, Tenreyro said it would be two to three years before oil actually began to flow into the market.

Cuba has signed production-sharing contracts with oil companies from around the world to drill its offshore fields.

There are no U.S. companies involved because of the U.S. trade embargo imposed on Cuba since 1962 that prevents them from doing business with the island.

Brazil’s Petrobras, which has years of deepwater-drilling experience, has been negotiating with Cuba for rights to exploit one of its offshore blocks, but Tenreyro said a deal had not been struck.

“We hope to have good news soon,” he said.

Tenreyro said Cuba was currently producing about 60,000 barrels of oil and 20,000 barrels equivalent of natural gas daily from onshore wells scattered mostly along its northern coast.

He said that production covered almost 50 percent of Cuba’s daily energy needs. The island imports about 90,000 barrels a day from oil-rich socialist ally Venezuela in exchange for the services of thousands of Cuban doctors.

Cuba is stepping up the pace of onshore drilling and is conducting a pilot project to increase secondary recovery from the aging Varadero field that has been Cuba’s primary field since the 1970s, he said. Secondary recovery involves pumping gas into old wells to force out what is left of the oil.

Editing by Michael Christie and Peter Cooney

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