Russia signs oil contracts with Cuba

Russia signs oil contracts with Cuba

HAVANA, July 29 - Russia and Cuba have signed contracts that "set the
bases" for Russian oil company Zarubezhneft to search for oil in Cuba's
part of the Gulf of Mexico, Cuba's state-run press said on Wednesday.

In its online edition, Communist Party newspaper Granma said four
oil-related contracts had been signed during a visit on Tuesday by
Russian Deputy Prime Minister Igor Sechin to the island that was his
country's close ally during the Cold War.

Granma, without providing details, said the oil pacts between
Zarubezhneft and state-owned Cuba Petroleo "set the bases for work in
(Cuba's) exclusive economic zone in the gulf."

Cuba said earlier this year that Russian companies had been given their
pick of 15 blocs to lease in the Gulf of Mexico, but there was no
mention of a lease signing in Granma or other news reports on Wednesday.

Russian news agency RIA-Novosti quoted Sechin as saying "we consider
that an outcome of this cooperation will be new opportunities both for
Cuba as well as Zarubezhneft".

Cuba has said it may have 20 billion barrels of oil reserves in its
offshore fields, but only one test well has been drilled.

That well, completed in 2004 off Cuba's northern coast near Havana,
showed traces of oil, according to the operator, Spain's Repsol-YPF, but
the company has not yet drilled a long-promised second well.

Cuba has divided its offshore into 59 blocs, 21 of which are under
contract to a total of seven companies.

The U.S. Geological Survey has estimated that Cuba has about 5 billion
barrels of oil and 10 trillion cubic feet of natural gas offshore.

Russia also granted $150 million in credits for the delivery of Russian
agriculture and construction equipment that will be used in areas hit
hard by three hurricanes last year, news reports said.

Russia and Cuba have been working to revitalize relations that went cold
after the 1991 collapse of the Soviet Union.

Sechin also visited Cuban allies Venezuela and Nicaragua before his stop
in Havana.

FT.com / Europe - Russia signs oil contracts with Cuba (29 July 2009)
http://www.ft.com/cms/s/0/ea362a36-7ce0-11de-9f29-00144feabdc0.html