MEO lauds further easing of US sanctions against Cuba

Tuesday, October 18, 2016

The US has announced a fifth round of regulatory changes to the Cuban assets control regulations (CACR), which will allow for greater investment in infrastructure and the electricity sector.

Earlier this month US President Barack Obama issued a directive for the normalization of US-Cuba relations.

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The fifth round of regulatory changes eases restrictions for bilateral engagement in areas such as health related transactions, importation into Cuba of US goods for personal use, and investment in infrastructure, including in the electricity and public transport industries.

Oil company MEO Australia celebrated the changes, which became effective on October 17.

"The ongoing easing of US government restrictions on business dealings with Cuba is clearly a positive step for MEO, considering the company's block 9 PSC project and other potential business activities in Cuba," MEO's CEO Peter Stickland said.

MEO said in August it had identified "very significant prospective resource potential" for light, high quality oil in one of three oil plays in block 9.

The company was awarded the onshore block, which covers 2,380km2, 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 Melbourne-based company opened an office in Havana earlier this year.

Strickland said allowing US companies to provide services related to Cuban infrastructure is potentially significant for MEO's advancement of block 9, given the prominent role oil and gas play in both public transport and electricity generation in Cuba.

Cuba is currently producing around 80,000boe/d but is seeking to boost output. The island nation imports 50% of its oil, mostly from Venezuela, and the domestic market for oil and gas is expected to grow, according to MEO.