Informacion economica sobre Cuba

Cuba's 2010 oil and gas analysis
By Jorge R. Piñón

Crude and natural gas production

Cuba's domestic heavy-sour crude oil production reflected an increase of
approximately 11 percent, from 47,517 bd in 2009 to 52,623 bd in 2010.
This new production was predominantly the result of new record-breaking
6,000 meter horizontal drilling coastal prospects around the town of
Camarioca, east of the beach resort of Varadero in Matanzas province.

The gross working interest of Cuba's national oil company CubaPetróleo
(Cupet) in 2010 was 31,419 bd, while that of Canada's Sherritt
International Corp. was 21,204 bd. This represents 59.7 percent and 40.3
percent, respectively, of total domestic crude oil production.

Oil-in-place estimates for Cuba's northern oil province range from
1,000- 2,000 mmbo, with recovery ratios of between 6 and 7 percent of
oil in place, determined by the viscosity of the oil and the
permeability of the rocks. Future production is expected to increase,
thanks to planned enhanced secondary oil recovery projects between Cupet
and Russia's Zarubezhneft in the Boca de Jaruco field.

Cuba's domestic crude-oil production peaked in 2003 at 64,018 bd. (Note:
Cuba's Oficina Nacional de Estadísticas reports national crude oil
production in metric tons; a conversion factor of 6.35 barrels per
metric ton was used for this analysis)

Associated natural gas production (97 percent recovery factor) seemed to
be reaching a plateau of approximately 38bcf annually as a result of the
maturity of the Varadero and Puerto Escondido oil fields. Cuba saw its
associated natural gas production increase by more than 40 percent, from
approximately 26bcf in 2005 as a result of its Energas joint venture
with Canada's Sherritt.

Petroleum demand

Cuba's petroleum demand levels have been declining over the past five
years, primarily as a result of conservation efforts and increases in
fuel and electricity prices reflecting international market conditions.
Petroleum demand of 137,025 bd in 2010 reflected a decrease of
approximately 2 percent from 2009 demand level of 139,651 bd.

High-sulphur residual fuel oil/crude oil blend consumption of 89,868 bd
— used as boiler fuel for the electric power sector, steel, mining and
cement industries — represented over 65 percent of total demand.

The second-largest petroleum demand product was diesel at 26,453 bd,
intended for the commercial land transport and rail sectors. Motor
gasoline consumption of 6,184 bd represents the lack of a private sector
vehicle fleet, particularly when you compare it on a per capita basis
with the region's largest mogas consumers of Puerto Rico at about 55 mbd
and the Dominican Republic with demand levels of around 23 mbd according
to EIA figures.

Refinery production

The Havana and Santiago de Cuba refineries continue to run
intermittently, each averaging about 22,000 bd, from boiler plate
capacities of 100,000 bd each.

The 65,000 bd revamped Russian-built Cienfuegos refinery, today a Cupet
(51%) PdVSA (49%) joint venture, ran 55,295 bd in 2010 compared with
57,316 bd in 2009. This refinery is basically a hydroskimming
configuration with a reformer but with two (naphta and distillate)
hydrotreating units, which as of this date have not been revamped and
are not operating. As a result, diesel and mogas qualities do not meet
regional specifications.

Petroleum imports and exports

Cuba imported a total of 113,000 bd of refined products and crude oil
from Venezuela in 2010, compared to 112,000 bd in 2009, according to
PdVSA's 2010 financial reports.

Imports of Venezuelan refined products — avgas, LPG, lubricant base
stock, diesel, and fuel oil — rose to about 14,000 bd in 2010 from about
9,000 bd in 2009. Imports of Venezuelan Mesa 30 crude oil amounted to
99,000 bd in 2010, down from 103,000 bd in 2009.

The majority of Cuba's Venezuelan petroleum import volumes — 93,000 bd
— are part of the Convenio Integral de Cooperación Económica, a barter
agreement of petroleum for goods and services with subsidized payment
terms signed by both countries in October of 2000. Approximately 20,000
bd of total Venezuela crude oil imports represent PdVSA-Caribe equity
tolling volume, which is exported to regional and West African markets
via tenders to international oil trading companies.

Source: Oficina Nacional de Estadísticas de Cuba 2010 Energy Report,
published June 23, 2011.

Jorge R. Piñón was president of Amoco Corporate Development Company
Latin America from 1991 to 1994; in this role he was responsible for
managing the business relationship between Amoco Corp. and regional
state oil companies, energy ministries and energy regulatory agencies."

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