The new blocks, 8A and 10, are located in Central and Northern Cuba and encompass areas of 967 square kilometres and 261 square kilometres respectively.
Sherritt International Corporation (Sherritt) announce that it has signed two new Production Sharing Contracts (PSCs) with the Government of Cuba.
The new blocks, 8A and 10, are located in Central and Northern Cuba and encompass areas of 967 square kilometres and 261 square kilometres respectively. The PSCs have a 25-year-term and include commitments which primarily include reprocessing existing seismic data and acquiring new seismic data within a two-year period. After the completion and evaluation of the seismic work, Sherritt has the option to continue its exploration work or relinquish the PSCs.
"We are very pleased with the addition of these two Production Sharing Contracts as they are a significant part of our strategy to extend the production life of our energy business in Cuba," said David Pathe, President and CEO of Sherritt. "We are also awaiting final approval on two additional PSCs on the west side of the City of Havana."
The main zone of interest in the two new exploration blocks is the Upper Jurassic-Lower Cretaceous Veloz Group. The Veloz Group currently contains the most important oil-producing reservoirs in Cuba where Sherritt produces approximately 20,000 barrels of oil per day from the Varadero, Puerto Escondido and Yumur? oil fields. Sherritt has both the technical and operational expertise for exploring and developing oil and gas pools in this geological setting which is characterized by complex folded and thrusted carbonate reservoirs.
In June 2014, Sherritt also announced the extension of an existing PSC in the Puerto Escondido/Yumur? area for an additional 10 years to March 2028. The extension applies to all new wells drilled on the lands described in the amended PSC. With respect to existing wells drilled on the PSC, they will revert back to the Cuban state on the original date of March 2018.
