Australia's Melbana turns to Cuban players for oil drilling in Cuba

Melbana is the only company listed on the Australian stock exchange with a footprint in the Cuban oil sector.
By Daniel J. Graeber Follow @dan_graeber Contact the Author   |  July 12, 2018 at 8:33 AM
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July 12 (UPI) -- Entities on the ground in Cuba are the preferred option for oil drilling operations set to begin by as early as December, Australia's Melbana Energy said.

Melbana is one of the few foreign energy companies, and the only one listed on the Australian stock exchange, with an established footprint in Cuba. The company has stakes in several oil prospects on the northern coast of Cuba.

At its onshore Block 9 contract, the company said in a statement on operations ended June 30 that it vetted a "turn-key" arrangement with a Cuban entity that has access to local rigs.

"At this stage this is the preferred option due to the substantial reduction in operational complexity, with a drilling rig being identified by the contractor and a drilling window nominated as notionally commencing in December 2018," the company stated.

The proposed rig, however, is scheduled for maintenance late in the third quarter and might be delayed to the first quarter of 2019. The contractor was not identified, though Melbana does have an established relationship with state-owned Cuba Oil Union.

The company in early April completed a tender for a drilling rig that could be deployed later this year. Bids are under review while it looks for outside partners to buy into its Cuban portfolio.

"Our Cuba activities continued to progress from a drilling readiness standpoint and our farmout discussions are also progressing," CEO Robert Zammit said in a statement. "We will continue to focus on this area during the third quarter."

The company estimates it would cost at least $20 million to drill two wells in Cuba, higher than previous estimates.

Melbana, which changed its name from MEO Australia to reflect a Caribbean flair, said a June study of the reserves in the Zapato prospect inside so-called Block 9 confirm its interpretation of a 71 million-barrel reservoir.

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