Sherritt to 'optimize' Cuba energy business

Sherritt International will be looking to leverage its oil and natural gas experience and relationships in Cuba as part of its 2018 strategic priorities, the Canadian company said on Monday.

The operator holds production-sharing contracts for onshore and offshore acreage on the Caribbean island where it also is the largest independent power producer.

During the company's fourth quarter earnings call, president and CEO David Pathe announced that Sherritt is due to make a decision in the coming weeks regarding what technology it will use to address lost circulation at block 10.

The company suspended drilling in December on the block when it started to lose geotechnical stability in the well bore.

"Lost circulation is not an uncommon phenomena for us in the drilling that we've done in Cuba over the years but historically most of the time we've been able to overcome those lost circulations by pumping seawater down the well," said Pathe, who added that seawater was not sufficient to restore circulation.

The executive said that "most likely" a new sidetrack will be spud back to the 3,300m level where there is a wider diameter. Drilling is expected to resume in April and initial results from the new technology would follow in a couple of months, according to Pathe.

On the power front, Sherritt highlighted a decline in electricity production in Cuba on reduced gas availability and the after-effects of Hurricane Irma.

Sherrit's latest earnings release is available here