After essentially extending the deadline for it 1st Licensing Round through 2021, sources close to state-run Union Cuba-Petroleo (Cupet) is planning to offer improved fiscal terms as part of a bid to woo potential bidders. However, the exact nature of these proposed improvements has not been detailed. A brochure released at the 3rd Cuba Energy, Oil and Gas Conference held on 26-29 November 2019 in Havana did not show any differences in fiscal terms to that previously revealed. Cupet hosted a roadshow in London on 3 June 2019 as part of the launch of the country's 1st Licensing Round. Cuba is offering 24 blocks offshore in the country's Exclusive Economic Zone (EEZ) as part of Havana's bid to boost oil production. Licence round participation registration is scheduled for 10 January 2020, while inquiries and clarifications are slated for 31 January 2020. Cupet says company qualification has a 29 May 2020 deadline, while the bidding process kicks off on the same day. Bid evaluation will take place on 29 June 2020, while licence awards are scheduled for 1 July 2020. However, at the final roadshow in Havana it is understood the government decided to extend the timeline. The blocks are being offered under Production Sharing Agreements (PSA) under provision of the Foreign Investment Law 118 and its implementation norms and resolutions. The general terms of the round are: ->The term of the contract is 35 years.->The exploration period is 10 years. ->During the exploration period no taxes or annual rentals are payable.->No signature bonus payable.->No production bonus payable.->No royalties payable.->No state participation.->If commercial development occurs, the contractor will pay income tax at a rate of 15%-22.5%, commencing in the ninth year of the project (ie a nine-year tax holiday prevails) on net profit.->Profit split is based on R-Factor. This is the main bid evaluation parameter.->The contractor does not pay taxes to provinces or municipalities or on repatriation of profits or production.->The cost recovery ceiling is set at up to 70% and will consider the volume and price of hydrocarbons.->The contractor must contribute to the training of local staff. Fixed local staff training cost is US$ 200,000 per year during the exploration period, non-cost recoverable. ->Cupet retains the first buy-in option at the market price.->The contractor must give priority to the local workforce, except for key technical and management positions.<P />
After essentially extending the deadline for it 1st Licensing Round through 2021, sources close to state-run Union Cuba-Petroleo (Cupet) is planning to offer improved fiscal terms as part of a bid to woo potential bidders. However, the exact nature of these proposed improvements has not been detailed. A brochure released at the 3rd Cuba Energy, Oil and Gas Conference held on 26-29 November 2019 in Havana did not show any differences in fiscal terms to that previously revealed.