Brazil’s state-owned Petroleo Brasileiro SA (Petrobras) has signed agreements with Cuba’s Cupet for cooperation in oil and gas exploration and production, research and development, and human resource cooperation. Studies also will be undertaken for agreements concerning facilities maintenance.
The agreements give Brazil a foot in Cuba’s energy door that Venezuela has, until recently, partially blocked.
Petrobras, which has expertise in deepwater exploration and production, said the agreement “foresees the assessment of the offshore blocks in the Cuban sector of the Gulf of Mexico, as well as technical and economic analyses for the construction of a lubricant factory in Havana.”
Cuba hopes its exploration in the deepwater Gulf of Mexico will result in discoveries enabling the country to become self-sufficient in oil production. The US Geological Survey says Cuba’s GOM areas could contain 4.6-9.3 billion bbl of crude and 9.8-21.8 tcf of gas (OGJ, Jan. 21, 2008, p. 41).
Brazil also extended Brazilian credit to Cuba for food, medicine, and hotel and road construction.
Brazil’s official Agencia Estado news agency said the agreements coincide with political transition in Cuba a year and a half after Cuban President Fidel Castro transferred power to his brother Raul due to health problems.
Agencia Estado said the aid program has a long-term strategy: Brazil sees Cuba as a growing market and a transshipment point in a “privileged location” near Florida, and it wants to be in a positive position “when trade opens up as part of Fidel’s succession process.”
Venezuela-Cuban pacts
Venezuela is Cuba’s biggest trading partner in South America, and Brazil wants to recover ground lost to Hugo Chavez. Since 2003, Chavez has been selling petroleum to Cuba at subsidized prices in exchange for the island’s sending physicians, nurses, and hospital equipment to Venezuela.
“It was because of Venezuela that Cuba’s negotiations with Petrobras in the past reached an impasse,” said Agencia Estado.
On Dec. 22, 2007, Chavez and Raul Castro signed 14 energy agreements in Havana, including a $122 million loan for Cuba to buy tankers to transport crude oil and products from Venezuela.
Plans also call for Venezuela and Cuba jointly to increase the capacity of Cuba’s 65,000 b/d Cienfuegos refinery to 150,000 b/d. Built in 1990 with Soviet technology and mothballed in 1991, the refinery reopened Dec. 21, 2007, following Venezuela’s renovations. Cuba also will reopen an oil pipeline from the refinery to Matanzas.
Cuba has endured a 50-year US economic embargo that precludes US firms from investing in such projects.
