Gazprom Neft has signed a Transfer Agreement and a Joint Operating Agreement with Petronas, the Malaysian state-owned oil and gas company, relating to exploration and subsequent development of four Cuban offshore blocks.

The Agreement provides Gazprom Neft with a 30 per cent stake in the project, which is to be financed proportionally by participation shares subject to the pro-rata consideration of the expenses incurred to date. The Agreement shall take effect following approval by the state authorities of the Republic of Cuba.

The possibility to work on the shelf of Cuba was initially considered by Gazprom Neft's Board of Directors in early October 2010, when the Board acknowledged a positive long-term outlook to the Company's activity in this region.

"Gazprom Neft's partnership with Petronas will enable the Company to further extend its geographic reach and strengthen its position in the global market. The offshore experience will promote the Company's growth and reinforces the implementation of its strategic plans to increase production both in Russia and beyond", stated Alexander Dyukov, Chairman of Gazprom Neft's Executive Board.

The Product Sharing Agreement (PSA) in relation to Blocks 44, 45, 50 and 51 in the Gulf of Mexico was signed between Petronas and the Cuban government in 2007. Until today's announcement Petronas has remained the only project participant. The Agreement enables geological exploration at the four blocks with the possibility of further oil production until 2037, and gas production until 2042.

Within the contract area, 2D seismic has already been performed, and the first exploration well drilling is scheduled for 2011. The partners will take a decision on further actions relating to the project once the drilling results are known.

Tags: Gazprom Neft