May 30, 2008 / 5:31 PM / 11 years ago

Petrobras studying block in deep Cuban waters

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), India’s ONGC (ONGC.BO) 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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