HAVANA._ Due to the high cost of investment in production and extraction infrastructure, the oil industry is by necessity included on the list of opportunities that Cuba is offering to investors who might be interested in sharing both risk and dividend, in an area of vast potential as verified by land and marine geological studies.

Officials from the Ministry for Energy and Mining have said that in the case of the oil industry, opportunities are concentrated on risk exploration and shared production on areas of land, shallow, deep and ultra-deep waters, including Cuba’s Exclusive Economic Zone in the Gulf of Mexico which has been divided into 52 blocks for negotiating purposes.

Due to the high cost of investment in production and extraction infrastructure, the oil industry is by necessity included on the list of opportunities that Cuba is offering to investors who might be interested in sharing both risk and dividend, in an area of vast potential as verified by land and marine geological studies.The investment offer also contemplates secondary exploitation deposit recovery with a view to internal market supply without excluding the possibility for export.

To these ends Cuba recently published the requisites for foreign companies to invest in the national oil and gas industry, including certified compliance with prescribed conditions by the National Office of Mineral Resources.

The bidding companies must inform of their oil and gas exploration and exploitation activity undertaken over the previous three years and provide a detailed account of their exploration works, the number and type of wells drilled and investments, among other issues. This resolution and the implementation of the Rules for the Investment Process alongside complementary legal regulations nullify previous legislation in this regard and open the way for expressions of interest and investment by foreign capital. Attractive renewable-energy source investment opportunities also feature in the portfolio of the Ministry for Energy and Mining in line with Cuba´s goal of changing its energy matrix by 2030. The country has prepared two projects to build wind farms under the modality for companies fully funded by foreign capital. Cuba is also promoting joint venture companies to build 10 sugar cane biomass power stations and another two that will use forestry waste.

Cubaníquel has readied three nickeliferous geological surveys while Geominsal has similar proposals for precious metals, copper, lead and zinc.

AN EXAMPLE OF BEST INVESTOR PRACTICE

Having entered the Cuban market in 1991 as a purchaser of concentrated nickel, the Canadian Sheritt International Corporation company is now involved in various branches of the national economy, such as electrical energy, gas and oil, agriculture, tourism, transport, communications and real estate.

As a result of this positive and progressive alliance, last year the company extended its oil and gas production contracts with Cuba for a further 10 years.

This extension, which relates to contracts that were to expire in 2018, means that their alliance with Cubapetroleo (CUPET) will run until 2028, during which time Sherritt International is committed to drilling a minimum of 7 additional wells in the first two years immediately after the new contract comes into effect. There are also additional joint exploratory production contracts.

Senior company executives have expressed their satisfaction with the alliance with Cuba, which they have described as an important milestone for continued joint long -term oil production here.

Sherritt International more recently opened the eighth phase of the combined cycle in the Boca de Jucaro Joint Enterprise east of Havana; a 349 million dollar project undertaken in partnership with CUPET.

The project will enhance efficiency in using accompanying gas from 29 to 46 percent, allowing for an additional 150 megawatt/hour to enter the national electrical grid. Sherritt, the largest independent oil producer in Cuba, is currently operating three fields, which offer a model for future foreign investment in this and other sectors of the Cuban economy.

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