March 10, 2011 / 5:41 PM / in 7 years

UPDATE 1-Petrobras has relinquished Cuba oil block -official

* Petrobras found poor prospects, wants to focus on Brazil

* Decision a blow to Cuba’s offshore oil hopes

* Spain’s Repsol planning to bring offshore rig to Cuba

(Updates with comments from president’s adviser, adds background)

By Marc Frank

HAVANA, March 10 (Reuters) - Brazilian oil giant Petrobras (PETR4.SA) has withdrawn from an offshore oil exploration block in Cuba’s waters that it leased amid great fanfare in 2008, a Brazilian official said on Thursday, citing poor prospects.

Marco Aurelio Garcia, foreign policy adviser to President Dilma Rousseff, told reporters in Havana exploratory work off Cuba’s northern coast had not shown good results and that Brazil wanted to concentrate on its own oil fields.

Asked if state-run Petrobras had abandoned the offshore Cuba block, he said:

“Yes, that was already decided some time back. Petrobras withdrew from that (block). We’re sorry, but the truth is you have to work with tangible elements and there wasn’t any security of that in this block”.

The decision appeared to be a blow to Communist-ruled Cuba’s hopes for an oil bonanza from still-untapped offshore fields it says hold 20 billion barrels of oil.

Petrobras signed up for one of Cuba’s 59 offshore blocks in October 2008 in a Havana ceremony attended by then Brazilian President Luiz Inacio Lula da Silva and Cuban President Raul Castro.

Lula, a close ally of former Cuban leader Fidel Castro, had vowed Petrobras would find oil for the Caribbean island, heavily dependent on imports from oil-rich socialist ally Venezuela.

The Petrobras block was just offshore from Cuba’s biggest oilfield, east of Havana.

Garcia apologized for Brazil deciding to drop its Cuban block. “We’re very sorry and the truth of things is that ... Brazil will have to concentrate on our prospecting,” Garcia said in a press conference. “You know that we now have big reserves, maybe one of the biggest reserves in the world.”

CUBA HOPES RIDING ON REPSOL

Experts believe Brazil may have more than 50 billion barrels of oil buried under a thick layer of salt as much as 4.4 miles (7 km) below the ocean’s surface.

Cuba’s offshore oil hopes now ride even more heavily on Spanish oil company Repsol YPF (REP.MC) , which is expected to bring a Chinese-built drilling rig to Cuba in August.

Repsol, in partnership with Norway’s Statoil (STL.OL) (STO.N) and India’s ONGC (ONGC.BO) l, plans to drill at least one well, then pass the rig over to Malaysia’s state-owned oil company Petronas.

The oil industry is watching the Repsol project closely and if it finds significant reserves, more companies are likely to want to explore in Cuban waters.

Repsol drilled an offshore well in Cuba in 2004 and said it found oil, but that it was “non-commercial.”

It said at the time it planned to drill more wells, but is believed to have had difficulty finding a rig that did not violate the 49-year-old U.S. trade embargo against Cuba.

The embargo limits the amount of U.S. technology that can be used in equipment employed in Cuba. It also prevents U.S. companies from operating on the island.

Garcia said Brazil wished Cuba well in its search for oil. “There are other companies like Repsol and from China that are trying (to drill for oil) and I hope they find it,” he said.

The U.S. Geological Survey has estimated Cuba has about five billion barrels of oil offshore. (Additional reporting by Jeff Franks; Editing by Pascal Fletcher and David Gregorio)

0 : 0
  • narrow-browser-and-phone
  • medium-browser-and-portrait-tablet
  • landscape-tablet
  • medium-wide-browser
  • wide-browser-and-larger
  • medium-browser-and-landscape-tablet
  • medium-wide-browser-and-larger
  • above-phone
  • portrait-tablet-and-above
  • above-portrait-tablet
  • landscape-tablet-and-above
  • landscape-tablet-and-medium-wide-browser
  • portrait-tablet-and-below
  • landscape-tablet-and-below