Brazil signs new oil deal as Cuba hopes for economic revival
NA (AFP) - Brazil has inked a multi-million-dollar deal to explore for oil off the Cuban coast, joining India, Vietnam, Malaysia Spain, Norway and Venezuela in cash-strapped communist Cuba's quest for black gold.
The deal between Brazil's state oil giant Petrobras and Cubapetroleo, announced by President Raul Castro and visiting Brazilian President Luiz Inacio Lula da Silva, is the latest offshore front on which Havana is fighting to achieve energy independence, and reverse its dire economic straits.
"If there is a chance of finding oil in Cuba, don't be worried Raul, it can be at 500 meters depth, at 1,000, at 3,000 meters, at 7,000, we are going to look for it, find it and turn it into energy," Lula told his host.
Cuban authorities in October announced that the Caribbean nation's crude reserves were more than double what had been thought " 21 billion barrels of crude.
If the development pans out, it could give rise to an amazing tropical Cinderella story.
Cuba, the Americas' only communist country, is an oil importer, and relies heavily both economically and politically on support from oil-rich leftist Venezuelan President Hugo Chavez, a staunch ally of the Castros.
If it becomes energy independent, the communist regime can project itself into the future indefinitely, and would be jolted from being virtually unable to obtain credit to being flush with budget funds.
The country's centrally planned economy is frail on a good day, and its population of over 11 million desperately eager for economic progress after surviving economic dire straits since 1990. Cuba also has ridden out two major hurricanes in recent months, and seen a major share of its food crops wiped out.
Castro, 77, took over from his ailing brother Fidel Castro, 82, officially in February. The elder Castro was at Cuba's helm for five decades.
Raul Castro has promised progress but on the economic front it has not materialized.
Now, it would appear Havana is betting against unknown odds on the oil card's promise.
Lula and Castro said that under the deal between the two state firms, Petrobras will operate a 1,600 square kilometer bloc in Cuban waters in the Gulf of Mexico, at a depth of 500 to 1,600 meters, off the coast of the province of Matanzas east of Havana.
The Brazilian giant from 1998-2001 explored another bloc unsuccessfully; now Petrobras will start its investment with eight million dollars, and can explore within a seven-year period, while having 25 years to pump, should oil be found.
Raul Castro said he was fully confident that Brazil would find crude "because we already are extracting some, and because of the Brazilian company's capacity." Petrobras is among the companies looking for oil in Cuban waters in the Gulf of Mexico, sprawling over 112,000 square kilometers divided up into 59 blocs in 1999.
Cubapetroleo exploration chief Rafael Tenrreyro has said the oil in question is part of the same subsea geological formation exploited by Mexico and the United States in the Gulf of Mexico. But he also cautioned that any big Cuban oil find would take three years to begin to be pumped.
But official Cuba is glowing with hope.
"Perhaps we will become, within a relatively short time, oil exporters," Fidel Castro wrote in an October 3 essay in the official newspaper Granma, in a country where official media tend not to fuel false hopes.