Petite producers

Smaller producers may be minnows to the Middle Eastern giants, but exciting developments are afoot in the world’s more modest upstream developers.

With attention on oil and gas producers around the world primarily focused on the major, well-known producers, countries working on the development of smaller reserves are often overlooked. Despite this, development to boost indigenous reserves and increase domestic production - particularly at a time of high international energy prices - continues at a significant pace in these countries.

Oil & Gas Middle East takes a look at the activity in some of the world's smaller producers, focusing on those that have topical plans to develop reserves - most are currently producing some oil (and gas) but at less than 100 000 barrels a day - and also at countries with no current production, but with ambitious exploration plans.

Cuba - talk of a breakthrough

Cuba has estimated reserves of 0.75 billion barrels and produced around 58,000 barrels a day of crude in 2007 - a level that has changed little since the start of the century. It is ranked around 60th in terms of world production.

Consumption is just over 200,000 barrels a day (imports from Venezuela are significant) and the island nation has a refining capacity of 300,000 barrels a day. This is currently being upgraded as part of a major agreement signed with the international arm of India's Oil & Natural Gas Corporation ONGC Videsh in 2006. That agreement with Spain's Repsol-YPF saw the Indian firm also take a 30% equity stake in several deep water exploration blocks along with Norsk Hydro of Norway (30%).

The blocks covering some 12,000 km² are located in Cuba's Exclusive Economic Zone which the US Geological Survey has estimated could contain over four billion barrels of oil and up to 10 trillion ft³ of gas. Cuba opened these blocks to foreign companies in 1999.

Other companies operating in Cuba include Canada's Sherritt which currently accounts for two-thirds of the country's domestic production.

The company holds 40-100% indirect working interests in seven production-sharing contracts with production focused on fields at Yumuri, Varadero, Canasi, and Puerto Escondido along the north coast between Havana and Cardenas.

These near-shore oil reservoirs are accessed by directional drilling from land-based rigs to produce heavy oil, which is mainly used to supply fuel for Cuba's power generation facilities.

The Cuban government said earlier this year that it was optimistic of a major breakthrough in the country's oil reserves, even talking of becoming an energy exporter in the future. The country's Ministry of Basic Industries has said 2008 would be a key year for the country's oil sector, with high levels of seismic acquisition programmes and test drilling in the economic zone area. 2009 will see work continue on the Repsol-YPF operated blocks.

The government is also negotiating a further eight blocks - four with Venezuela's PDVSA and the others with an unnamed Asian company. Some 35 blocks are still available. Any major discoveries as part of the current exploration campaign are expected to see renewed interest in Cuba's offshore waters.

Timor Leste - economic hope

Timor Leste's reserves are all located offshore in the Timor Sea which separates it from Australia. Its estimated daily oil production in 2007 was around 90,000 barrels a day, from existing facilities put in place by former ruler Indonesia.

Oil and gas have become the mainstay of the country's economy, with revenues accounting for 95% of government income, thanks to an agreement signed with Australia following independence in 2002 on the division of some - but not all - reserves in the sea.

The fledgling state has since established a Petroleum Fund, based on the Norwegian model, to ensure revenues are maintained for future growth of the industry and economy.

The government has announced plans to develop a pipeline and petrochemicals plant to access its claimed stake in an estimated US $90 billion of oil and gas in the Timor Sea. Attention is focused on the Greater Sunrise field, estimated to contain 300 million barrels of crude and 8.3 trillion ft³ of natural gas.

READERS' COMMENTS

MORE FROM ARABIANBUSINESS.COM