HAVANA (AFP)--Cuba is negotiating oil exploration and production
deals with Russia, China and Angola, with Moscow shaping up as the
partner that could make the communist island energy
self-sufficient, officials said Wednesday.
The development is unfolding right under the nose of the U.S.,
home to oil giants that cannot follow suit due to the U.S. economic
embargo on Cuba.
"The Cuban oil industry's venturing out into deep sea waters in
the Gulf of Mexico very likely will result in an increase in
(Cuba's) oil production," Basic Industry Minister Manuel Marrero
said as he announced state oil firm Cubapetroleo was negotiating on
23 blocs with the three countries.
Cuba depends on crude from ally Venezuela, but if Venezuelan
supplies were cut off for any reason, that could spell deep
political and economic trouble for the Americas' only one-party
communist state.
Locking in energy independence, aside from potentially turning
Cuba from a cash-strapped developing nation into a flush oil
exporter, could help project its current regime years into the
future.
Russia is considering exploration across 15 of the blocs, which
would make Moscow Cuba's top partner in the very costly
process.
The remaining eight blocs would go to China National Petroleum
Corp., its top oil firm, and Angola's state oil concern
Sonangol.
Marrero said U.S. oil companies were welcome to join in, but
that Washington first would have to address its sanctions
regime.
The exploration newly detailed by Havana would come in addition
to other countries already betting on a Cuban black gold rush.
In 2000, Cuba divided its offshore exclusive economic area into
59 blocs, of which 21 have been assigned so far: Repsol YPF SA
(REP) has teamed up with Norsk Hydro ASA (NHY.OS) and India's ONGC
Videsh Ltd., also known as OVL, on six blocs. OVL, the overseas
investment unit of India's Oil & Natural Gas Corp. (500312.BY),
is on its own in another two; and state-run companies Petroleos de
Venezuela SA, Vietnam Oil & Gas Group and Petronas of Malaysia
each have four; while Brazil's Petroleo Brasileiro SA (PBR) has
staked out one.
Meanwhile, Canadian firms Sherritt International Corp. (S.T) and
Peberco, a subsidiary of Pebercan Inc. (PBC.T), in the past eight
months have pulled out of their deep-sea operations without any
announcements here to explain their moves.
Cuban authorities in October announced that the Caribbean
nation's crude reserves were more than double what had been thought
and now were estimated to be about 20 billion barrels.
Repsol did the first drilling in 2005 but in a location its
found wasn't commercially viable. In July, Repsol in association
with the Norwegian and Indian companies, will drill another
well.
Then, "at least...another seven drilling operations will take
place" through 2012, said Marrero, who acknowledged "the challenge
from the technological and financial point of view."
To get its offshore operations in gear it needs a logistical
center; that is being built at the port of Mariel, just west of
Havana. But it still lacks capacity to process heavy crude.
In 2008, Cuba produced four million tons of petroleum and gas,
officially about 47% of what it consumes. The remainder, about
95,000 barrels a day, it imports from Venezuela on favorable credit
terms.