TORONTO (miningweekly.com) – TSX-listed Sherritt International Corp on Friday announced that it had inked two more production sharing contracts (PSCs) with Cuba, where it has oil and gas assets.
The new blocks, 8A and 10, are located in Central and Northern Cuba and cover areas of 967 km2 and 261 km2, respectively.
The PSCs had a 25-year-term and include commitments that mainly included reprocessing existing seismic data and acquiring new seismic data within a two-year period. After completing and evaluating seismic work, Sherritt had the option to continue its exploration work or relinquish the PSCs.
"We are very pleased with the addition of these two PSCs as they are a significant part of our strategy to extend the production life of our energy business in Cuba. We are also awaiting final approval on two additional PSCs on the west side of the City of Havana,” Sherritt president and CEO David Pathe said.
The main zone of interest in the two new exploration blocks was the Upper Jurassic-Lower Cretaceous Veloz Group. The Veloz Group currently contained the most important oil-producing reservoirs in Cuba, where Sherritt was producing about 20 000 bbl/d from the Varadero, Puerto Escondido and Yumurí oil fields.
Sherritt said that it had both the technical and operational expertise for exploring and developing oil and gas pools in this geological setting that was characterised by complex folded and thrusted carbonate reservoirs.
In June, Sherritt also announced an extension of an existing PSC in the Puerto Escondido/Yumurí area, for another ten years to March 2028. The extension applied to all new wells drilled on the lands described in the amended PSC. The existing wells drilled on the PSC would revert back to the Cuban State on the original date of March 2018.
Sherritt is the largest independent oil producer in Cuba and currently operated three commercial fields within its two existing PSCs. Sherritt produced an average of 19 710 bbl/d of gross working-interest oil during the nine-month period ending September 30.
Sherritt also held a 15.79% working interest in the gas-producing Badar mining lease, located in the central Indus basin, in Pakistan, and several working interests in Spain.