February 22, 2008 / 11:14 PM / in 11 years

Cuba oil production dropping, expert says

MIAMI, Feb 22 (Reuters) - Cuba’s oil production, which peaked at 65,000 barrels per day in 2003, has fallen to 51,300 bpd due to declining output from the country’s primary oil field, a Miami-based energy expert said on Friday.

Jorge Pinon, a former oil company executive and now energy fellow at the University of Miami, said the Varadero field, east of Havana, has been depleted by years of pumping.

“Varadero field was discovered in the 1970s. This is a very old oilfield and that field is going through its natural decline,” Pinon said at conference on Cuba at Florida International University.

Pinon said Sherritt International (S.TO), a Canadian joint venture partner with Cubapetroleo (Cupet), is planning to use enhanced recovery methods to squeeze more oil from Varadero.

The 51,300 bpd average includes oil and liquids produced from natural gas processing, he said. The latter accounts for 1,200 to 1,500 bpd, he added.

He said the cost of producing oil in Cuba is about $1.77 a barrel.

Pinon said Cuba consumes about 145,000 bpd, with 90,000 of that imported from Venezuela.

Reporting by Jeff Franks; Editing by David Gregorio

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