Thursday, December 28, 2006

Cuba owes Canadian oil firms $69 mln - Pebercan

Cuba owes Canadian oil firms $69 mln - Pebercan
Wed Dec 27, 2006 4:38pm ET147
(In U.S. dollars unless noted)

CALGARY, Alberta, Dec 27 (Reuters) - Cuba's state-run oil company is
behind in $69 million of payments to its Canadian partners in a
heavy-oil-producing block on the north side of the island, one of the
partners said on Wednesday.

Pebercan Inc. (PBC.TO: Quote, Profile , Research) said Cubapetroleo SA,
known as Cupet, owes it 55 percent, or $37 million, of that amount as
spelled out in its production sharing and sales agreements for the
concession, Block 7.

Cupet owes the remainder to the other partner, Sherritt International
Corp. (S.TO: Quote, Profile , Research), Pebercan said.


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It said it has intensified talks with Cuban authorities in its efforts
to resolve the matter.

In the meantime, operations on Block 7, located on the coast between
Matanzas and Havana, are proceeding normally with production of about
22,000 barrels a day, Montreal-based Pebercan said.

It is currently drilling three wells there.

The company also said it plans to spend $65 million on its share of
development in 2007 and hopes to reach an agreement on that with Cupet
in the third week of January.

Pebercan shares rose 5 Canadian cents to C$2.80 on the Toronto Stock

($1=$1.16 Canadian)

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