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Cuba First Licensing Round

NEW FOR 2019 | CUBA ENERGY, OIL AND GAS will mark the end of CUPET's Licensing round roadshow

Following the recent official announcement of the 2019 Licensing Round for Offshore Blocks in the Cuban Economic Exclusive Zone of Gulf of Mexico on 3rd June, CUPET has confirmed that the last stop of the roadshow will take place in Havana 27th on November as part of the Cuba Energy, Oil and Gas Conference 2019. Request a copy of CUPET's London Roadshow Presentation

 

 

CUPET made the official announcement for the launch and process of Cuba's first licensing round on 3rd June 2019 at the Institute of Directors. 

Cuba's First Licensing Round - Overview
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Introduction
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Unión Cuba-Petróleo (CUPET) has the mandate to carry out all kind of operations within the oil and gas chain of value in the national territory of the Republic of Cuba. Therefore, CUPET is entitled to join with foreign partners and investors, according to Foreign Investment Law 118, in every possible kind of association authorized by the Law.

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Purpose
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CUPET is calling Oil Companies, interested in carrying out exploration and exploitation of Hydrocarbon activities in the Economic Exclusive Zone (EEZ) of the Cuban sector in the Gulf of Mexico to present offers for one or more blocks, under Production Sharing Agreements (PSA).

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AVAILABLE BLOCKS AND DATA
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Offered blocks for the first License Round include 24 blocks associated to highest exploratory potential geological scenarios. Classification criteria are based on available information, mapped leads, sea depths and estimated risks.

All existing information and data packages will be available for registered and qualified companies for the license round. Additionally, the offered area is widely covered by a recent BGP 2D multiclient high resolution seismic. Data packages are available from BGP upon request, as well as the possibility to access Data Rooms in specialized events or online.

Additionally, the possibility to participate in existing Farm-out projects remains open by direct negotiation with operating companies PDVSA and Sonangol, and with CUPET support.

Companies may participate independently or associated in trusts of two or more companies.

 

Available Blocks for First Licensing Round

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PROSPECTIVITY
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The Gulf of Mexico is one of the most prolific and prospective offshore areas in the world. Cuba produces around 60000 BOE/day from the western offshore by drilling extended-reach wells through duplex structures in the Folded and Thrusted Belt.

Reservoirs are basically fractured and lixiviated carbonates from Late Jurassic. The seals are lithologically composed by Tertiary shale, while source rocks are Jurassic deep water clayey carbonate facies.

In 2012, three exploration wells were drilled in this area, targets were focused on Cretaceous carbonates and no commercial oil was discovered; however, all wells had oil shows which according to biomarkers were originated in Late Jurassic source rocks. Thus proving the extension of this unit in the offshore.

New 2017 2D BGP multiclient seismic provided valuable information concerning basement depth, and sedimentary thickness. Besides, useful data was obtained as deep as 7-9 sec (~10-12 km) to determine with high accuracy the boundaries between different exploration scenarios and the seismic stratigraphic sketch for regional interpretation, exploratory play types could be re-defined.

In addition, new areas with huge potential for petroleum systems occurrence were determined.

By mapping several leads in a first interpretation stage resources are estimated in more than 10 billion barrels of recoverable oil, with expected qualities of 25-35° API.

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LEGAL FRAMEWORK SUMMARY
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  • Interested companies must qualify with the national regulation authority, The National Office of Mineral Resources (ONRM), prior to presenting their formal offer for the Licensing Round
  • Terms and Conditions under provision of the Foreign Investment Law 118 and its implementation norms and resolutions
  • Main features of contract model are typical Production Sharing Agreements for which Contractor assumes all risks, costs and responsibilities of the activity
  • Progressive fiscal system. Main terms are 30 to 35-year contract, No Signature Bonus, Nor Royalties, No taxes or levies of any kind during exploration phase. Up to 70% cost recovery
  • Income tax on profit oil 15%, at the 9th year of the project. No taxes for repatriation of profits