One of the few foreign energy companies with a presence in Cuba is now seeking funding for a 2018 exploration drilling campaign for Block 9, which is expected to hold over 44 billion barrels of in-place potential oil reserves.
Melbana Energy, an Australia-based oil and gas explorer, has announced a funding round to finance its 2018 exploration program for Block 9 – an onshore deposit in Cuba that the company fully owns on a production-sharing basis with the government.
Melbana is one of few energy companies with a presence in Cuba, and the ASX-listed company said it already has commitments for US$1.41 million (A$1.8 million) from a placement of 178 million fully paid ordinary stock. It has also offered its existing shareholders a 1 for 2 pro-rata entitlement to the tune of US$3.76 million (A$4.8 million).
Melbana will use the proceeds to fund the preliminaries around its drilling program in Cuba but will not go into drilling itself, the company said.
Block 9, according to Melbana’s website, has in-place potential oil reserves of between 1.18 and 44.15 billion barrels, with the chance of discovery in the various leads and prospects that comprise the block standing between 14 and 32 percent. The best-case reserve scenario estimates the in-place resources of the deposit at 12.7 billion barrels.
Recoverable resources at the deposit are seen at 637 million barrels of crude, with the initial drilling targets, the Alameda-1 and Zapato prospects, accounting for 200 million barrels. Alameda-1 alone contains three prospective drilling targets with estimates potential resources of more than 2.5 billion barrels and recoverable reserves of some 130 million barrels.
Cuba has been eager to develop its oil and gas industry in recent years. Three years ago, the country passed a Foreign Investment Act that set a corporate tax rate of 15-22.5 percent, featuring a tax holiday for the first eight years of operation.
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Currently, the only foreign company developing oil resources on the island is Canadian Sherritt International, alongside the state-owned energy entity, CUPET.
Cuba’s oil output to date averages 45,000 bpd, according to Melbana, which is enough to satisfy half of domestic consumption.
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By Irina Slav for Oilprice.com
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