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Posted January 23, 2009 by publisher in Cuba-Canada Trade

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PEBERCAN INC. (The “Company”), (TSX: PBC) Pebercan announces that Cuban authorities, through Cubapetroleo S.A. («Cupet»), have notified its subsidiary Peberco Limited that Cupet wishes to prematurely terminate the production sharing contract, entered into in 1993 and scheduled to expire in 2018.

In light of this early termination of the production sharing contract and settlement of debts owed to Peberco for the sale of crude oil and in consideration of Cupet assuming all of Peberco’s obligations relating to its activities in Cuba, Peberco will receive a total net lump sum payment of 140M US$.

As well, and given the relationship between Peberco et Sherritt International (Cuba) Oil and Gas, the latter will receive its portion of the lump sum, equivalent to approximately 60M USD$.

Peberco and Cupet have entered into an agreement that provides for the transfer by Peberco of all of its rights to the benefit of Cupet, conditional to the acknowledgment of receipt by Peberco of the lump sum payment. The agreement stipulates that Cupet will assume all of Peberco’s rights and obligations, including taking charge of any Cuban personnel and assets required for oil and gas production, thereby discharging Peberco.

The agreement provides that the transfer and acknowledgment of the lump sum payment will be completed by mid February 2009. The company will recognize the depreciation of its assets in its first quarter financials of 2009.

Pebercan will examine future opportunities upon receiving the lump sum.

Pebercan’s interim consolidated financial statements and management report for the period ended December 31, 2007 are available on our Web site Pebercan.com as well as on Sedar.com.

Pebercan is involved in the exploration, development and exploitation of oil reserves in the Republic of Cuba. Pebercan sells its entire production to the Cuban government but is not bound by any restrictions regarding the sale of its oil. The Company’s shares are listed on the TSX and trade under the symbol PBC.

Legal Notice—Forward-Looking Statements

Forward-looking statements contained in this press release involve known and unknown risks, uncertainties or other factors that may cause actual results, performance or achievements of the Company to be materially different from any future results, performance or achievements expressed or implied by such forward-looking statements. We consider that these forward-looking statements are reasonable given the hypothesis on which they are based and which the Board of Directors of the Company has reviewed and ascertained as being well founded. Pebercan disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Important additional information identifying risks and uncertainties is contained in the Company’s most recent annual and interim reports and forms filed with the applicable Canadian securities regulatory authorities.

For more information, please contact:

Christophe Ranger - .(JavaScript must be enabled to view this email address)
750 Marcel-Laurin Blvd., Suite 106, Saint-Laurent, Quebec H4M 2M4 - Canada
Tel.: 514 286-5200; Fax: 514 286-5177

RENMARK Financial Communications Inc.
Henri Perron - .(JavaScript must be enabled to view this email address)
Dan Symons : .(JavaScript must be enabled to view this email address)
Montreal - Tel: 514 939-3989 / Fax: 514 939-3717
Toronto – Tel. : 416 644-2020 / Fax : 416 644-2021

—————————————- Havana Journal Comments—————————————-

Havana Journal Inc. owns CubanOil.com and is always looking for development partners.

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  1. Follow up post #1 added on January 24, 2009 by publisher with 3905 total posts

    I didn’t even catch this… from Renato Pérez Pizarro | Cuban Colada

    Cuba has revoked its production-sharing contract with Pebercan Inc. and will pay the Canadian firm $140 million, Reuters reported Saturday. There was no explanation for the revocation of the agreement, which was to last from 1993 to 2018.

    Pebercan had rights to three concessions between Havana and Matanzas, on the island’s northern coast. Output in the third quarter of 2008 was 18,245 barrels per day and all the oil was sold to Cupet, the Cuban government’s petroleum agency.

    Pebercan’s Canadian partner, Sherritt International Corp., will receive $60 million from the lump-sum payment, promised for mid-February, Reuters says.

    In a related development, Russia and Cuba on Friday signed an agreement that would enable Russian oil companies to help Cupet with prospecting, extraction, refining, sales, and other aspects of oil production.

    According to The Associated Press, the agreement involves Gazprom Neft, TNK-BP, Zarubezhneft, Rosneft and Surgutneftegaz. Companies from other Latin American countries could also cooperate, the AP says, suggesting that oil-rich Venezuela could become involved in the deal.

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  2. Follow up post #2 added on January 26, 2009 by publisher with 3905 total posts

    Still looking to do business in Cuba?


    Pebercan Inc., a Canadian company producing oil in Cuba, dropped the most in eight years in Toronto after it said that the Caribbean island nation terminated its oil production sharing contract “prematurely.”

    Pebercan shares plunged 33 cents, or 24 percent, to C$1.07 as of 11:42 a.m. in Toronto Stock Exchange composite trading. Earlier, the shares fell as much as 35 percent for their steepest intraday decline since December 2000.

    Cubapetroleo SA, the state oil company, notified Pebercan that it “wishes to prematurely terminate the production sharing contract entered into in 1993 and scheduled to expire in 2018,” Montreal-based Pebercan said in a statement distributed by Canada NewsWire on Jan. 23 after markets closed.

    Pebercan will get a payment of $140 million (C$170.63 million), of which it will pass on $60 million to partner Sherritt International Corp. Sherritt, an oil and nickel producer, fell 7.9 percent to C$3.63 in Toronto.

    A joint venture with Pebercan accounts for 26 percent of its overall production in Cuba, Toronto-based Sherritt said in a separate statement on Marketwire. Its other, wholly owned production sharing contracts in Cuba continue, Sherritt said.

    To contact the reporter on this story: John Kipphoff in Toronto at .(JavaScript must be enabled to view this email address)

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  3. Follow up post #3 added on January 28, 2009 by publisher with 3905 total posts

    and from Reuters

    Sherritt International shares plunged to a two-day loss of 25 percent on Tuesday, as investors fretted that its oil concessions in Cuba could be revoked and the company’s chief executive took a leave of absence.

    Sherritt, which is based in Canada but has key oil and metals assets around the world, said in a statement that CEO Jowdat Waheed had taken a leave to deal with a family health matter. He will be replaced by Ian Delaney, the company’s chairman.

    However, one analyst said the pressure on the stock was more likely tied to worries about Sherritt’s Cuban oil assets, after Havana revoked a 16-year-old production sharing agreement on Friday involving Sherritt and small Canadian oil producer Pebercan (PBC.TO: Quote, Profile, Research).

    The decision to revoke the agreement—which accounts for 26 percent of Sherritt’s Cuban oil production—raises concerns about the company’s other, 100 percent owned concessions there, said John Hughes, an analyst at Desjardins Securities in Toronto.

    “The market is concerned that Sherritt will lose all of their exposure to oil in Cuba,” said Hughes.

    “It appears that the Cuban government is not paying for past receivables, or future receivables.”

    Pebercan has said the Cuba’s national oil company, Cupet, has been late with payments in recent years.

    Fears that Cuba could one day nationalize Sherritt’s assets—which also include the Moa nickel joint venture—have at times dogged the company’s stock.


    What a great country to do business. Loan the Cuban government money so you can enter into a joint venture where you are forced to hire Cuban labor at international wages, pay the Cuban government your share but not get paid back for your loans and then they kick you out when they don’t need you anymore or get a better deal from some place else.

    I suppose the Chinese will discover this soon.

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  4. Follow up post #4 added on January 28, 2009 by paul

    Proof that lifting the credit blockade will only expose our businesses to bad “trading” partners. It’s best to continue dealing with Cuba the way we do now, and that is cash only. If Cuba would be granted a line of credit with American companies, they need to have high interest rates, and certainly government monitoring.

    http://www.cubatrade.org ...we already trade plenty with Cuba.

  5. Follow up post #5 added on February 10, 2009 by publisher with 3905 total posts

    Press release from Pebercan just now:

    Pebercan announces that its Cuban subsidiary, Peberco Limited, received the net lump sum payment of 140M US$ from the Cuban Authorities in connection with the termination, by the Cuban Authorities, of the Production Sharing Contract and payment of amounts owed to Peberco Limited for the sale of crude oil.

    Cuba consulting services

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