Cuba to Drill 5 New Oil Wells by 2013!!

Cuba announced plans to drill five deepwater oil wells in the Gulf of Mexico beginning this summer, expressing confidence that its efforts will be rewarded with major new energy finds. We're about to move to the drilling phase," said Manuel Marrero, an official with the government authority tasked with overseeing Cuba's oil sector. "We're all really hopeful that we will be able to discover large reserves of oil and gas," said Marrero, who added that the ventures would be undertaken with the help of unspecified foreign companies. He said the deepwater wells were to be drilled between 2011 and 2013, and would be in waters ranging in depth between 400 meters and 1,500 meters. He did not specify which countries would be among the foreign partners working with Havana on the project.


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Studies estimate Cuba has probable reserves of between 5 and 9 billion barrels of oil in its economic zone in the Gulf of Mexico. In 2010, Cuba produced 21 million barrels of oil, about the same as it had extracted the previous year, representing a little less than half of its annual energy needs. Cuba imports that rest of its oil -- about 100,000 barrels per day -- from Venezuela.

In November 2010, Gazprom Neft acquired 30% stake in four offshore Cuba blocks from Petronas. Following is the snap shot this deal.

Source: Derrick Petroleum E&P Transactions Database

Eni 2010-2014 business plan clouded by Africa unrest

Eni is planning to achieve 3% annual production growth by 2014, higher compared to the previous plan of 2.5%. About 80% of the production due to come on-stream over the plan period will be from giant projects, in particular from those in Venezuela, Russia, the Arctic region and Angola.

The company’s strategy of quickly developing oil and gas resources could work but depends a lot on Africa — this now looks challenged given the unrest in North Africa. ENI is one of the biggest foreign operators in Libya which gets more than half its oil and gas from Africa and which is one of the fattest dividend yields among European oil majors.

The production target is clearly at risk if the unrest goes on and if that happens, Eni have to cut the dividend. In any case the troubles remove potential upside to the 2011 dividend. Before the North Africa crisis erupted Eni had succeeded in renegotiating its gas supply contracts with Libya. But that is now on hold given the suspension of Libyan flows. Italy has increased Russian gas imports. Gazprom will now be strengthened in renegotiations with Eni as Italy, and Europe, once again relies on Russian gas.