Gazprom Neft enters project in the Exclusive Economic Zone of the Republic of Cuba in the Gulf of Mexico

On July 29, 2011 Gazprom Neft, Cubapetroleo (Cupet), the Cuban national oil company and Petronas, the Malaysian national oil company, signed a Supplementary Agreement to the Production Sharing Contract (PSC) on four blocks in the exclusive economic zone of the Republic of Cuba in the Gulf of Mexico. Following the signing, Gazprom Neft becomes a party in the PSC and acquires 30% of the project, while Petronas retains 70% in the project.
In early July 2011 after receiving the approval of the respective Cuban authorities, Gazprom Neft and Petronas signed a Deed of Assignment of the share in the project. Additionally, the Parties signed a Joint Operating Agreement stating the main principles of joint operations, procedures, and mechanisms for making key decisions.
Following these agreements, Gazprom Neft has entered a new international project.
“This partnership with Petronas will help Gazprom Neft to enforce its competence in the sphere of deep water development and expand its expertise in projects outside of Russia. By 2020 we plan to have about 10% of our overall production from overseas projects,” commented Alexander Dyukov, Chairman of Gazprom Neft Management Board.
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The PSC provides for exploratory works and in case of commercial discovery of hydrocarbons the production of hydrocarbons in the deep water blocks # 44, 45, 50 and 51 of the Exclusive Economic Zone of the Republic of Cuba in the Gulf of Mexico. The Production Sharing Contract was signed in 2006 between Petronas and the Government of the Republic of Cuba.
In October 2010, Gazprom Neft and Petronas signed the Farm-out Agreement and the Heads of Joint Operations Agreement. Financing of the project shall be done pro rata of the participating interest of the parties. Based on the results of the first exploration well, the parties will decide on the further steps for the project.
Apart from Cuba, Gazprom Neft participates in international exploration and production projects in Iraq, Equatorial Guinea, Venezuela and - through its Serbian affiliate company NIS – in Angola, Romania and Hungary.