Energy chiefs eye oil off Cuba

MEXICO CITY (AP) — In the two years since oil reservoirs were discovered off Cuba’s coast, Canadian, Chinese, Indian and Norwegian companies have lined up to explore the potentially lucrative Caribbean waters.

U.S. corporations, however, have watched the activity less than 60 miles south of Florida’s coastline with their hands tied. U.S. oil exploration in Cuban waters, along with most U.S. trade, is prohibited under a 45-year-old U.S. embargo designed to undermine Fidel Castro’s communist government.

This week, American energy executives will meet with their Cuban counterparts in the first private-sector oil summit between the countries. Cubans hope to inform the businessmen of their country’s oil potential while undermining the embargo, which often has frustrated U.S. corporations.

The three-day meeting, which kicks off today, is sponsored by the U.S.-Cuba Trade Association, Valero Energy Corp., the Louisiana Department of Economic Development and the Texas Port of Corpus Christi, among others.

Representatives from major U.S. oil companies also are expected to attend, said Kirby Jones, president of the U.S.-Cuba Trade Association. Mr. Jones’ consulting firm, Alamar Associates, organized the meeting.

Cuba’s delegation was to be led by Fidel Rivero Prieto, president of the state oil company, CubaPetroleo. Officials from the Cuban Ministry of Basic Industries and Cuba’s ministries of foreign trade, foreign investment and foreign relations also will be present, Mr. Jones said.

Aided by Canada’s Sherritt International Corp., Cuba has increased output of low-quality heavy crude and now produces 75,000 barrels daily, about half of what it needs. It imports the rest, much of it on favorable terms from political ally Venezuela.

It also has turned to other foreign companies to explore further. In 2004, the Spanish petrochemicals company Repsol-YPF SA announced that it had found petroleum reservoirs off Cuba’s coast. The first well was not considered commercially viable, but the company has announced it will conduct a second exploration.

This time, however, Repsol will join with China’s largest offshore oil producer, CNOOC Ltd.; Norway’s industrial company, Norsk Hydro ASA; and India’s state-owned Oil and Natural Gas Corp., ONGC.

The group will explore seven deep-water blocks estimated to contain more than 4 billion barrels in oil and gas reserves.