Australia's MEO provides Cuba project update

Australian firm MEO has provided an update on its operations in Cuba in which it says drilling work suggests multimillion-barrel potential in one of the three plays the company is exploring.

MEO, in a monthly operations report, said it has identified "very significant prospective resource potential" for light, high quality oil in one of three oil plays in Block 9.

MEO was awarded onshore Block 9, which covers 2,380 km2, in September 2015 for a 25-year term. The block is lightly explored but contains natural oil seeps and has several small oil discoveries, it said.

The company's surveys have identified three play types: lower sheet play, upper sheet play and shallow tertiary play. The lower sheet play, it said, has a potential of more than 8Bb of oil in place with prospective resources of 395Mb.

The Melbourne-based company opened an office in Havana this month.

The firm said one of its near-term activities involves developing a drilling program by 1Q17 for accelerated drilling in block 9 to test the potential of the lower sheet play.

Cuba is currently producing around 80,000boe/d but is seeking to grow production, MEO said. The island nation imports 50% of its oil, mostly from Venezuela, and the domestic market for oil and gas is expected to grow. Cuba has seen a limited application of modern exploration techniques on account of the US embargo, MEO added.

MEO is the only ASX-listed company with Cuban energy industry exposure, with three years of in-country experience.