Venezuelan PDVSA joins European, Asian companies in Cuba oil hunt

Mexico City (Platts)--14May2006

Venezuela's Petroleos de Venezuela, or PDVSA, has joined the hunt for oil
in Cuba that has already attracted companies from Canada, Europe, China and
India, the government in Havana said at the weekend.
In a statement published in Saturday's internet edition of the Communist
Party daily Granma, the Cuban government said that state-owned PDVSA had
signed an accord with its counterpart, Cuba Petroleo, or Cupet, for
exploration and production "in the short and medium term."
PDVSA is already heavily involved in downstream activities in Cuba.
Venezuelan leader Hugo Chavez is Cuban President Fidel Castro's closest ally
in Latin America. The government statement said the new accord followed a
two-day meeting in Havana of senior PDVSA and Cupet officials.
Under an accord signed last last year, PDVSA is working on the
modernization of the Soviet-designed refinery at Cienfuegos in southern Cuba.
The aim is to build a pipeline that will take as much as 120,000 b/d of
products to a 600,000 bbl storage terminal on the island's northwest. The
terminal is to be the linchpin of President Chavez's Petrocaribe scheme to
provide fuel to Cuba and throughout the Caribbean at a discount to world
market prices.
Cupet is already exploring off northwestern Cuba with Sherritt
International and Pebercan, both of Canada, using directional drilling from
onshore locations. Towers for the drilling are being rented from China's
Sinopec. It also has an agreement with Sinopec to produce heavy oil in the
western province of Pinar del Rio.
Spain's Repsol YPF has made a discovery -- rated as "non-commercial" --
in the deep waters of the Gulf of Mexico, within Cuban maritime limits that
border those of Mexico and the US.
Repsol is preparing for a second deepwater attempt, this time in
partnership with Norway's Norsk Hydro and India's ONGC Videsh. Contracts for
the project are due to be signed in Havana May 23.
Two weeks ago, President Castro said that Cuba produced 76,000 b/d of
crude -- all of it heavy -- and its equivalent in natural gas in the first
four months of this year. That amounts to about 45% of the island's
consumption, which the Cuban leader put at just under 166,000 b/d.
Imports come from Venezuela under a part-barter agreement. To the chagrin
of some US politicians, US companies are barred from operating in Cuba under
the terms of trade sanctions that Washington has imposed on the Castro regime
since 1962.


 

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