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During the Cold War, Cuba traded sugar for oil with the USSR. Since the dissolution of the USSR and the repudiation of Marxism by Eastern Europe and Russia, Cuba has looked towards Venezuela for its energy supplies. Exploration by Canadian companies for oil and gasl, especially in the Gulf of Mexico and Bay of Cardenas, continues actively today. The following information was recently released by Cuba concerning the oil and gas sector in Cuba.
Oil extraction up by 20%-plus in 2002 (August 6, 2002)
• Close to $1 billion invested in Cuban oil industry since 1991 • Contracts for first six blocks in the Cuban sector of the Gulf of Mexico
BY JOAQUIN ORAMAS
Those volumes indicate that oil and gas production this year is set to reach 4.1 million tons, over 20% up on last year’s total of 3.420 million tons.
Without a doubt, the development of this important industry is moving along at a healthy pace. Close to $1 billion USD has been invested in the sector since 1991, bringing about a six-fold increase in oil production in this period alone.
The greater part of investment comes from foreign companies using cutting-edge technology, although in recent years the island’s national oil company Cubapetróleo has also been investing in this strategic and profitable industry. Investment has targeted the creation of an industry infrastructure for the extraction, treatment and transportation of crude and gas from the oilfields; the construction of oil and gas pipelines; and the technical means for horizontal drilling, which reduces the duration of those operations four- to five-fold. This has been combined with improved pumping systems that have increased productivity per well, the use of crude oil treatment plants capable of reducing the percentage of water and salts, resulting in significant savings of time and energy.
Foreign investment participation in the development of the oil industry is undertaken through risk exploration contracts, the increased production of wells in use, and a guarantee of high technology and capital support. There are currently more than 10 contracts for land and offshore blocks in different operational phases, which take into account the favorable conditions in Cuba’s subsoil for the formation of deposits. According to both national and foreign geologists, the Cuban archipelago has considerable hydrocarbon reserves in its subsoil.
Currently, and in cooperation with foreign companies, intensive oil prospecting is underway both on land and the island’s maritime platform, mainly in the so-called northern belt of heavy crude located east of Havana.
In parallel, contracts for intensified oil production covering existing deposits via cutting-edge technology are producing satisfactory results, including the utilization of natural gas associated with the crude extracted from the wells. Since 1997, the industry has initiated a process designed to eliminate environmental pollution derived from associated gas production (with a high content of sulfide) and using it for economic ends. As such, Energas, a joint venture currently producing 160 megawatts of electricity in gas turbines, is to complete the execution of its “combined cycle” in Varadero’s oil zone in September, which will add 80 megawatts to make a total of 240 megawatts. Likewise, 220,000 cubic meters of clean gas will be distributed to the capital on a daily basis for domestic use, benefiting close to one million Cubans.
According to expert research, the so-called North Cuban oil producing province maintains the best outlook, with an extension of more than 1000 kilometers and 80% of its oil bearing territory under water. Equally as encouraging, in light of present predictions, is Cuba’s exclusive economic area in the Gulf of Mexico, with an 112,000-square-kilometer extension that the island’s government has divided into 59 blocks currently up for bid.
The offer is based on proven scientific facts. Research has revealed that the Cuban sector is situated within the prolific oil basin in the Gulf of Mexico, close to mature hydrocarbon zones. Evidence points to the possible existence of large, if not giant reserves.
Current technology can reach the depth of those seabed deposits.
Those prospects are guaranteed by contractual conditions for shared production in the Gulf area. The project has the total support of the Cuban government and is in compliance with international agreements on both maritime rights and the Sea Law. Equally as important are the accords between Cuba, Mexico and the United States concerning the demarcation of maritime borders.
In the Cuban sector of the Gulf of Mexico, the first six blocks are under contract, while new contracts are in the pipeline. Granma International, 2002.
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