Established in 1992, Sherritt's Oil and Gas operations in Cuba have grown from a modest oil recovery program to an intermediate exploration and production business that contributes significantly to the success of the Corporation. Over the years, Sherritt has demonstrated its ability to find, develop and produce oil and gas in the challenging environment of Cuba's complex fold and thrust belt reservoir.
Average gross working-interest production in 2014 for Oil and Gas in Cuba was approximately 19,456 boepd.
In May, the Corporation executed an agreement with the Government of Cuba to amend the PSC covering the Puerto Escondido/Yumuri oil fields for a 10-year extension to March 2028. The extension of the PSC applies to new wells drilled in the development area and a development drilling program has already commenced.
In December, the Corporation signed two new PSCs with the Government of Cuba. The new blocks encompass areas of 967 and 261 square kilometres, respectively, and have 25-year-terms. The Corporation is also awaiting final approval on two additional PSCs.
To date, Sherritt's operations have used natural reservoir pressures and conventional pumping technology and estimates that its recoverable reserves represent less than 2% of the original oil in place, which currently stands at over seven billion barrels. These low recovery factors are due to the viscous quality of the crude oil produced by conventional means and the nature of the fractured carbonate reservoirs. Typical Cuban oil fields are believed to contain large accumulations of hydrocarbons and individual fields may contain more than one billion barrels of original oil in place.
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