Oil in Cuba? Chavez says Fidel may be OPEC material

Oil in Cuba? Chavez says Fidel may be OPEC material
by Michael Langan Fri Sep 15, 3:12 AM ET

HAVANA (AFP) - Cuba, which for decades has struggled with crippling
energy crises, has black gold and could be
OPEC-bound, Venezuela's President Hugo Chavez said with a smile.

Though Cuba does produce a small amount of low-quality oil, recent
deep-water studies have been promising.

"Fidel is headed for OPEC ... I hope it will be the case," Chavez joked
at a meeting of developing countries in Havana.

"He is finding oil," added Chavez, whose country is Cuba's most
important political and economic ally.

If Cuba were to achieve energy independence, the Cinderella-story shift
could flip regional geopolitics upside down, potentially turning
Castro's cash-strapped, oil import-dependent regime into a crude
exporter able to fund itself well into the future.

Venezuela's oil shipments to Cuba at preferential credit rates have been
key to keeping Cuba's battered economy afloat in the wake of the
collapse of the former East bloc.

But Cuba may have large oil reserves in its territorial waters.

Just Sunday India's state-run oil company signed a deal with Cuba for
oil exploration in the Gulf of Mexico.

Under the deal, India's Oil and National Gas Corporation (ONGC) will
explore blocs N-34 and N-35, which cover an area of 4,300 square
kilometers (1,544 square miles) in Cuban waters.

ONGC already has a 30 percent interest in six other blocs in which
Norway's Norsk Hydro also has 30 percent interest and Spain's Repsol YPF
40 percent.

Officials of the state-run Cuba Petroleos (CUPET) say a total of six
companies have signed exploration deals for 16 blocs in the Gulf of Mexico.

With oil prices soaring, US lawmakers are grumbling about the
prospecting in Cuban waters just off the US coast.

Economic sanctions imposed by Washington make it impossible for US firms
to work with Cuba, and environmental laws prevent them from drilling in
nearby US waters.

US media have reported that China was involved in the prospecting, but
Cuba has not announced a Chinese deal.

The Gulf's waters are divided into economic exclusion zones of the
United States, Mexico and Cuba.

Among other companies with prospecting rights if not projects are
Canada's Sherrit International and Brazil's state oil giant Petrobras.

Cuba produces about a third of the oil it consumes, with the rest
imported under favorable terms from Venezuela, a member of the
Organization of Petroleum Exporting Countries (OPEC.)

Repsol has rights to six of the 59 prospecting areas the Cuban
government has been auctioning off since 1999. It carried out its first
drilling in 2004 and while oil was found, Repsol said the quality of
that crude was not commercial grade.

Venezuela, currently Latin America's only member of the OPEC oil cartel,
agreed in 2000 to deliver 53,000 barrels of crude a day to Cuba, with a
special credit rate for Chavez ally Castro. But that number has soared
to 80,000-90,000 barrels a day, according to Venezuelan oil officials.

Last year Cuba and Venezuela also signed agreements to help develop
Cuba's oil sector with technical know-how and financial help from
Venezuela's oil giant PDVSA.

http://news.yahoo.com/s/afp/20060915/bs_afp/cubanamsummitoilindiaopeccastro_060915071201