Cuba Relaxes Contract Conditions in Oil and Natural Gas Sector
To overcome capital shortages in the energy sector, Cuba has extended the duration of oil exploration and production contracts while opening its first mixed wholesale market to stimulate economic trade.
The Cuban administration has relaxed contract conditions via a decree-law to facilitate the participation of domestic and foreign companies in oil exploration and extraction activities, while launching the first mixed wholesale market in the country's history.
Legal Regulations and New Durations
According to reports in the Cuban press, the repealed laws of 1938 and 1959 became dysfunctional in the face of the current constitution and present conditions. The new decree provides for production-sharing contracts of up to 40 years, with a 10-year extension option.
State Rights and Investor Responsibilities
While maintaining its sovereignty over resources, the state reserves the right to reject licenses and concessions on national security grounds. Hydrocarbon activities are considered high risk, and operators are held liable for damages even if no fault is proven.
First Mixed Wholesale Market Opened
The Cuban administration has established the first mixed wholesale market in the country's history to stimulate trade among economic actors. State institutions and private businesses will be able to offer their products for wholesale at the market in the city of Sancti Spiritus.