The island of Cuba has a rich history of oil and gas exploration, dating back as far as the 1860s when commercial discoveries of heavy oil were found. The first significant discovery in Cuba was light oil in the Motembo oil field in 1881. The 1950s saw a boom following the discovery of the Jatibonico field in the Central Basin by a group of local businessmen under the company name of Grupo Jarueca, and other operators onshore at the time included Atlantic Refining, Gulf Oil, Shell, Standard Oil and Union Oil.
The state oil company Unión Cuba Petróleo (CUPET) was established in 1959. There was a further rush for acreage in the 1990s and those signing blocks included Alturas, British Borneo, Geopetrol, Premier and Sherritt. More recently, offshore blocks were awarded to CNPC, Petronas, PetroVietnam, PDVSA, ONGC, Repsol, Sonangol and Zarubezhneft. Interesting to note is the number of state oil companies that signed offshore blocks.
Calgary-based Sherritt International has the longest history of foreign companies in Cuba having been active in the country for over 30 years. During this period, Sherritt produced over 230 million barrels. It currently holds three exploration blocks. Sherritt has plans to drill exploration wells in Block 6A, aiming at extending the north coast oil trend, and Block 10, a prospect offsetting the Varadero Field.
Big plans
ASX-Listed Melbana Energy pre-qualified as an operator in Cuba in 2013 and identified Block 9 on the north coast as a preferred opportunity due to its location along the same structural trend as the massive Varadero Field. Melbana were subsequently awarded the Block 9 PSC in 2015, and Angolan-state oil company, Sonangol, farmed in to a two-well drilling campaign in 2020.
In 2021 and 2022, Melbana drilled two wells, designated Alameda-1 and Zapato-1. Alameda-1 is reported to have intersected three separate reservoirs that have been independently assessed to contain an impressive 5 billion barrels of oil in place, significantly exceeding initial expectations. Zapato-1 was reported to have encountered a thicker than expected volcanic sequence and with slow drilling the wildcat was suspended with the possibility of re-entering in the future.
Melbana started an appraisal programme on Alameda in June 2023 aimed at testing all three units of the Amistad Formation, targeting 88 million barrels of gross and unrisked prospective resources. A second well, targeting the deeper Alameda and Marti formations, will be drilled following the first well and is targeting 179 million barrels of gross prospective resources. Melbana hope that successful flow tests will allow the booking of reserves and the movement towards a development plan and production of oil.
Another Australian-based company, Petro Australis Energy Limited (PAE) has big plans in Cuba. PAE holds three onshore PSCs, two awarded in 2018 and the third in 2020. Its main activity is focused on Block 21A-IOR (Incremental Oil Recovery), which contains the Pina oil field, and the underlying and surrounding exploration Block 21A-P. Pina was discovered by Cupet in 1989 and only half the field is considered as exploited with no new wells drilled since 2001. PAE is planning a series of production wells with a target of an initial ramp-up to 5,000 BOPD. Meanwhile, Block 21A-P contains the carbonate Pina Deep Prospect, which is analogous to the 11 billion oil in place Varadero shallow water field in Cuba. Block 14-13NE is an exploration block on the north coast with a low commitment of reprocessing 2D seismic data.
In summary, the activities of Sherritt, Melbana and PAE are worth being closely watched, introducing a return of interest and exploration to the underexplored Cuban sector of the Gulf of Mexico.
