Categories: Energy & Environment

Binding Agreement Finalized in the Santa Cruz Oil Field

Melbana Energy (ASX:MAY) has provided an update via press release on its activities within the Santa Cruz oil field in Cuba.  Since 2006, this oil field has been in production.

The Santa Cruz oil field was originally estimated to have a resource of a potential 100 million barrels of recoverable oil.  The finalized agreement provides Melbana with an accelerated pathway to becoming an oil producer and booking reserves in Cuba.

Melbana secured the exclusive rights to assess the Santa Cruz oil field in of March this year in a long term binding Incremental Oil Recovery
(“IOR”) Production Sharing Contract (“PSC”) from the national oil company of Cuba, CubaPetroleo (CUPET).

Melbana has completed its initial assessment yielding a number of promising opportunities to enhance production from the designated area.

Advertisement. Scroll to continue reading.

In addition, Melbana has finalized the binding contract with CUPET, subject to standard Cuban regulatory approvals. This provides the Company with a long-term right to share in any enhanced production from the Santa Cruz oil field.

Under an IOR contract, additional production above an agreed base production rate is shared, as show in the image above.

Generally speaking, the commercial terms are consistent with exploration PSC terms, like those that apply to Melbana’s Block 9 PSC, with provisions in place for cost recover and sharing profit oil.

The Santa Cruz IOR PSC is split into multiple phases, with an initial desk-based technical study followed by an implementation phase.

Advertisement. Scroll to continue reading.

The initial study phase will last no longer than eight months, at which point MAY may elect to proceed to the next implementation phase, which includes a minimum program of two side-track wells from existing well bores to fresh geological targets.

To expedite oil production as soon as possible, the company has engaged a Canadian consultant with extensive Cuban IOR experience to identify possible streamlining opportunities.

Melbana CEO, Robert Zammit, said of the announcement:: “Securing the Santa Cruz IOR opportunity is a key plank in our strategy to become a producer in the near term.

“I am pleased that we have identified potential opportunities to enhance production at Santa Cruz and that we have had CubaPetroleo’s support to complete our commercial negotiations promptly and lock in the opportunity.

Advertisement. Scroll to continue reading.

“Our ability to identify the enhanced oil opportunities in Santa Cruz was greatly accelerated given our learnings from Block 9.”

This update comes just days since the last positive development on MAY’s radar. Earlier this week, the ASX small cap clinched an agreement with its farm-in-partners — French oil and gas major, Total, and Australia’s Santos — to accelerate planning for the Beehive-1 exploration well in offshore Australia, to ensure that it’s ready to drill in the September quarter of 2020.

Share
Published by
PRESS

Recent Posts

Cuba Joins the BRICS New Development Bank

In a move with both economic and geopolitical significance, Cuba has officially joined the New…

1 week ago

Cuba’s International Tourist Arrivals—June 2025

Cuba’s tourism sector, long a vital part of the island’s economy, is experiencing mixed fortunes…

2 weeks ago

Cuba Amplifies Voice of the Global South at BRICS 2025 in Brazil

Cuba took center stage at the 17th BRICS 2025 in Rio de Janeiro this weekend,…

1 month ago

FIHAV 2025 Set for this November

Cuba has confirmed the 41st edition of the Havana International Fair (FIHAV 2025) will take…

1 month ago

WestJet CEO Meets with Cuban President Amid Hopes for Expansion of Passenger Flights to Havana

WestJet CEO Alexis von Hoensbroech met Wednesday with Cuban President Miguel Díaz-Canel in Havana, a high-level meeting…

2 months ago

Cuba Expands Solar Parks as Energy Deficits Persist

Cuba is ramping up efforts to address energy shortages through the expansion of photovoltaic solar…

2 months ago