Sherritt to renew exploration, eyes gas sales in northern
Cuba
By OGJ editors
HOUSTON, Aug. 5 -- Sherritt International Corp., Toronto, plans to
resume exploratory drilling in northern Cuba in the third quarter and is
considering an increase in its $90 million capital spending plan in light
of the current oil price.
Capital spending was $46.2 million in the first half of 2004, and first
half gross working interest oil production in Cuba fell 13% to 37,444 b/d
(19,811 b/d net).
The production dip was due to natural declines in Canasi and Puerto
Escondido fields and delays in drilling several development wells in the
last half of 2003.
Exploratory drilling will start with the Santa Cruz prospect on Block
7. Sherritt said it has work commitments for several exploration wells
on blocks 7, 9, and 10 in the next 12 months.
With three rigs running, the company will refocus development drilling
on the Seboruco area, where recent drilling has resulted in higher than
anticipated initial production rates (see map, OGJ, Oct. 9, 2000, p. 38).
It will undertake a 50% capacity expansion of the Yumuri oil treatment
facility in late 2004 to process production expected from new wells at
Seboruco and Yumuri.
Construction was completed in the 2004 second quarter on a pipeline
to ship gas from the Canasi facility to the Cuban gathering system at Puerto
Escondido.
"This pipeline project reaffirms the corporation's commitment to assist
the Cuban government in developing the infrastructure necessary to utilize
the large volumes of gas produced at Canasi in an efficient and environmentally
responsible manner," Sherritt said.