Cuba is seeking foreign investments in its oil industry, with a particular focus on offshore drilling, a senior government official said this week. At the moment, about 50 percent of the islands demand is being satisfied by local production, but plans are to raise this substantially in the near term, the deputy general director of state-owned company Cuba Petrol Union (CUPET), Roberto Suarez, said.

Currently, CUPET pumps around 4 million barrels of oil equivalent a year, with the oil used for power generation. Almost all of Cubas natural gas output, 97 percent, is utilized as heating fuel and power generation.

After the U.S. lifted its trade embargo on the island, Cubas government has wasted no time in trying to attract foreign investments that are vital for the development of its energy industry, among all others.

What the island has to offer is total undiscovered technically recoverable reserves of 4.6 billion barrels of crude oil, 9.8 trillion cubic feet of natural gas and 900 million barrels of natural gas liquids, based on 2004 estimates by the United States Geological Survey (USGS). The country has, almost like clockwork, produced about 50,000 barrels of liquids per day, most from the coastal reserve areas east of Havana.

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One of the few oil companies exploring for oil in Cuba, Australian Melbana Energy, earlier this month said it has revised up its estimates for onshore oil reserves on the island, and substantially. Now Melbana believes there are 612 million barrels of oil in its Block 9, almost double the earlier estimates.

Other foreign companies, including Russias Zarubezhneft and Spanish Repsol, have drilled in Cubas portion of the Gulf of Mexico but so far, no commercially viable finds have been made.

Recent discoveries in Cubas shelf were made, according to Suarez, in the North Belt: a 200-km-long offshore area east of Havana, which is divided into 45 blocks. CUPET is looking for bidders for these blocks as well as partners that will bring in new technologies to its oil industry.

By Irina Slav for Oilprice.com

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