Sherritt reveals 2018 Cuba oil output forecast

Sherritt International expects oil production at its Cuba operations to reach between 4,300 and 4,800b/d in 2018. It will also spend Cad$39mn (US$31.1mn) on oil and gas.

"The forecast is based on the renewal of the Puerto Escondido/Yumuri production sharing contract given the approval received from the executive committee of the council of ministers of Cuba," the Canadian company said in a statement.

This forecast is well below the year-to-October figure of 14,877b/d the company reported for 2017.

Production forecast for 2018 also reflects the expiration of the Varadero West production sharing contract, but does not anticipate any production from block 10 in 2018, as drilling is yet to be completed, it added.

Oil production costs in Cuba are forecast to be between Cad$22 and Cad$23.50/b, higher than historical averages due to lower anticipated production in 2018 than in previous years.

The company expects to generate between 750-800MWh of electricity in 2018, below 2017 production results due to natural oil reservoir declines and the resulting reduction of gas production available for power generation. Operating costs are forecast to be between Cad$20.75 and Cad$21.50, in line with recent performance.