Friday, May 30, 2008

Petrobras studying block in deep Cuban waters

Petrobras studying block in deep Cuban waters
Fri May 30, 2008 6:30pm BST

HAVANA, May 30 (Reuters) - Brazilian state oil company Petrobras is
studying a block in deep Cuban waters for possible exploration as part
of broader cooperation with the Caribbean island, a top advisor to the
company said on Friday.

"We are planning to cooperate not only in exploration and production,
but lubricants, refining and training," Andre Ghirardi told Reuters in
Havana at a one-day meeting of Brazilian and Cuban businessmen.

"We are working on the possibility of exploring a block in the Gulf of
Mexico, but negotiations have not ended, they are advancing," he said.

Interest in Cuba's Gulf of Mexico blocks has picked up as oil prices soar.

Seven foreign companies have signed exploration agreements with Cuban
state oil company CUPET for 28 of the 59 blocks available in the deep
Gulf of Mexico waters of Cuba's economic exclusion zone fronting the
United States.

The U.S. Geological Survey estimated the North Cuba basin could contain
4.6 billion barrels of oil, with a high-end potential of 9.3 billion
barrels, and close to 1 trillion cubic feet of natural gas.

Ghirardi said negotiations to build a lubricants plant in Cuba were
going well, though no agreement had been signed.

Venezuela's PDVSA has become a major player in the Cuban oil industry.

PDVSA and Cuba have started up and are expanding a Soviet-built oil
refinery in central Cienfuegos province and modernizing another in
eastern Santiago de Cuba.

The two companies have formed joint ventures in refining and shipping.

PDVSA has also taken out blocks in the gulf, as have Spain's Repsol-YPF
(REP.MC: Quote, Profile, Research), India's ONGC (ONGC.BO: Quote,
Profile, Research) and Nordsk Hydro NHY.OL, Vietnam state oil and gas
group Petrovietnam, Malaysia's state-run Petronas [PETR.UL] and Canada's
Sherritt International [S.TO].

The director of exploration for CUPET said this year that activity was
picking up in Cuba's deep waters.

"Right now seismic studies are under way on 2,300 square kilometers and
very soon three-dimensional studies will begin on 4,500 square
kilometers in the Gulf of Mexico," Rafael Tenreyro said.

Cuba produces the equivalent in oil and gas of 75,000 barrels per day,
around 50 percent of its energy needs, importing the remainder from
oil-rich ally Venezuela on preferential terms in exchange for health,
education and other services. (Reporting by Esteban Israel; Writing by
Marc Frank; Editing by Christian Wiessner)

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