Gazprom Neft takes 30 pct in Cuban shelf oil project

With the approval from the Cuban authorities, Russian firm Gazprom Neft has gained interest in four deepwater oil and gas exploration blocks offshore Cuba.

Gazprom Neft, Cuba's national oil company Cubapetroleo (Cupet) and Malaysia's national oil company Petronas have signed a Supplementary Agreement to the Production Sharing Contract (PSC) on four blocks in the Gulf of Mexico offshore Cuba.

Through the agreement, Gazprom will now hold a 30 percent stake in deepwater Blocks 44, 45, 50 and 51 of the Exclusive Economic Zone of the Republic of Cuba. Petronas holds the remaining 70 percent interest in the project.

According to Oil & Gas Journal, the blocks are located 100 to 200 miles west of Havana.

To date, 2D seismic has been performed across the acreage, and as of November 2010, an exploration well was scheduled for drilling in 2011.

In addition to the exploration and development of the blocks, the agreement allows for the production of oil through 2037 and the production of natural gas through 2042.

Petronas signed the PSC with the government of Cuba in 2006, and in October 2010, Gazprom Neft and Petronas signed a farm-out agreement and a Heads of Joint Operations Agreement on the leasehold.

After receiving approval from the Cuban authorities, Gazprom Neft and Petronas signed a Deed of Assignment, as well as a Joint Operating Agreement in July 2011.

Gazprom Neft, Cuba's national oil company Cubapetroleo and Malaysia's oil and gas company Petronas signed a production sharing agreement for the project on July 29. Petronas owns 70 percent in the project, Gazprom Neft said in a statement.

The project will be financed by the participants in proportion to their stakes.

Manuel Marrero, a member of the Cuba Commission for the Exclusive Economic Zone in the Gulf of Mexico, said he hoped Gazprom Neft would increase its participation in the project after the discovery of the first oil, which may be drilled at the beginning of 2012.

Gazprom Neft plans to produce about 10 percent of its overall hydrocarbon output abroad by 2020.