Brazil's Petrobras weighs Cuba oil prospects

Brazil's Petrobras weighs Cuba oil prospects
Thu Jul 16, 2009 10:20am EDT

HAVANA, July 16 (Reuters) - Brazil's state-owned oil company Petrobras
PETR.SA PBR.SA has completed seismic work in its leased Cuban offshore
bloc and is studying whether to drill a well, the head of its Cuban
operations said on Wednesday.

Under terms of the lease, the company has until next May to make the
decision, Joao Figueira said in a press conference at Petrobras's newly
opened Havana office.

He said the bloc, located east of Havana and offshore from Cuba's most
prolific onshore oil field, has good prospects, but it remains to be
seen if it has sufficient accumulations of oil to make wells profitable.

"From a geological standpoint it's pretty well located in terms of oil
generation," he said. "The challenge and uncertainty are related to the
reserve distribution, size and production per well."

Cuba has said its offshore territory may contain 20 billion barrels of
oil, but nothing has been produced from its waters so far.

It has divided its offshore zone into 59 blocs, 21 of which have been
leased to a total of seven companies. Petrobras' bloc hugs Cuba's
northern coast

Spain's Repsol-YPF (REP.MC), part of a consortium with Norway's Statoil
Hydro (STL.OL) and ONGC Videsh (ONGC.BO) of India, drilled an
exploratory well in 2004 and said it found traces of high quality oil.

But a planned second well has been postponed repeatedly due to problems
that include difficulty getting a drilling rig that does not violate
restrictions of the United States' 47-year-old trade embargo against Cuba.

PDVSA, the national oil company of Venezuela, Cuba's socialist ally, has
said it plans to drill an exploratory well in Cuban waters next year.

Other bloc holders include Vietnam state oil and gas group Petrovietnam
and Malaysia's state-run Petronas (PETR.KL).

Figueira said Petrobras sunk a well in 2001 to probe Cuba's offshore,
but drilled it using an onshore rig based on an island.

The well, located almost 200 miles (320 km) east of the current bloc,
was a dry hole, he said.

(Reporting by Jeff Franks; Editing by Walter Bagley)

Brazil's Petrobras weighs Cuba oil prospects | Markets | Bonds News |
Reuters (16 July 2009)
http://www.reuters.com/article/bondsNews/idUSN1640388320090716