Update: MEO Australia (ASX: MEO) is now known as Melbana Energy Limited and listed on the Australian ASX (“MAY”).
MEO Australia Limited (ASX: MEO) announced today their entrance into the Cuban oil and gas sector.
The 2014 Cuban governments Foreign Investment Act to promote new investment in Cuba with a corporate tax rate of 15% to 22.5%. Further benefits include an eight month corporate tax holiday to foreign corporations investing in Cuba. Cuba consumes approximated 50% of a total of 80,000 barrels produced per day. Currently Cuba Petróleo Union (CUPET) the national oil corporation and Sherritt International of Canada are the only companies in Cuba producing oil.
MEO Australia has now entered the energy sector in Cuba. The announcement today followed the execution of the Cuba Block 9 Production Sharing Contract (PSC) with the national oil company CUPET in a ceremony in Havana. The following press release comes from the MEO Australia website:
The ceremony was attended by dignitaries including Mr. Juan Torres Naranjo, General Director of CUPET and representatives of MEO, including Managing Director & Chief Executive Officer Mr Peter Stickland. The execution of the Block 9 PSC represents the culmination of over three years of negotiations between MEO and CUPET and is MEO’s first entry into the Cuban oil and gas sector.
The Block 9 PSC area is in a proven hydrocarbon system with multiple discoveries within close proximity, including the multi-billion barrel Varadero oil field. Block 9 contains the Motembo field, the first oil field discovered in Cuba.
The exploration period of the Block 9 PSC is split into four sub-periods totaling eight and a half years with withdrawal options at the end of each sub-period. MEO will immediately commence work on the initial activity of evaluating the existing exploration data in the block and reprocessing selected 2D seismic data before determining whether to proceed with a subsequent 24-month exploration sub-period that includes acquisition of new 2D seismic data.
MEO’s MD and CEO Peter Stickland commented on the announcement:
“We are delighted to complete the execution of MEO’s first oil and gas block in Cuba. As an early mover into Cuba, MEO is now one of the few western companies with a footprint in the expanding Cuban hydrocarbon sector. The geology of the block has analogies to petroleum systems in which MEO’s technical personnel have significant experience, and we see substantial potential in Cuba overall and Block 9 in particular. We look forward to working closely with CUPET to explore and develop Cuba’s oil and gas resources.