UPI Energy Watch

Cuba announces oil reserves.

Cubapetroleo, the state-owned oil company in Cuba, said it believes the country has more than 20 billion barrels of oil in offshore oil fields in its share of the Gulf of Mexico. Cuba produces only 60,000 barrels of oil per day and imports about 93,000 per day from Venezuela. The wealth from such a significant find would be unprecedented, Trent News Agency reported.

That is nearly as much as the estimated U.S. reserves and more than double the 9 billion barrels that was estimated recently by the U.S. Geological Survey, the Trend News Agency reported.

Cubapetroleo's exploration manager said the company plans to begin drilling later next year, and if its estimates are correct, Cuba could move up to the Top 20 oil-producing nations in the world.

The first well will be drilled by a consortium led by Spanish firm Repsol, a spokesman said. After that, more wells are expected by early 2010.

As for the discrepancy in estimates, a Cubapetroleo spokesman told reporters that the USGS was lacking the same amount of information that his company had.

"I'm almost certain that if (USGS officials) ask for all the data we have, their estimate is going to grow considerably," he said.

Terrorists attack Canadian pipelines.

Two explosions in the past week have damaged EnCana's pipelines in northeastern British Columbia.

Saturday, and then again Thursday, the explosions occurred near the same pipeline in two different locations, the Province reported.

Former lawyer David Harris told the local newspaper that two targeted explosions in less than a week are likely the work of terrorists.

It is believed the people behind the blasts are anti-oil. Notes sent to local media called the energy companies terrorists.

Locals told the newspaper it was not the first time there have been tension and sabotage over an oil or gas project.

No one was injured in either blast, and while the pipeline was damaged, it was not ruptured.

Indonesia auctions blocks.

Indonesia awarded the rights for 22 oil and natural gas blocks in order to boost production.

Some of the companies that won rights to drill include ConocoPhillips, Chevron and Husky Energy, Xinhua reported.

ConocoPhillips was awarded an offshore oil and gas block in the Arafura Sea in Maluku province, Chevron won onshore and offshore blocks West Papua I and West Papua II, and Husky Energy Inc. won the offshore North Sumbawa II block in Nusa Tenggara province, Indonesian Oil Ministry Director Evita Legowo told Xinhua.

A Marathon Indonesia consortium won an onshore and an offshore block near the island of Sulawesi. The rest of the fields were awarded to other local and foreign companies.

The contracts are worth $375.5 million, and the companies have three years to produce, with the option of a six-year extension.

Legowo said the government has provided financial incentives for exploration and production because the country's growing population and demand for oil have risen significantly, making Indonesia a net oil importer since 2003. It does not help that Indonesia's oil production has decreased to less than 1 million barrels per day since February. With new fields being explored, officials there hope to develop some new production.

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Closing oil prices, Oct. 17, 3 p.m. London

Brent Crude oil: $69.68

West Texas Intermediate crude oil: $74.22

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(e-mail: energy@upi.com)