Brazil's Lula meets Fidel Castro, offers credit

By Anthony Boadle

HAVANA (Reuters) - Brazilian President Luiz Inacio Lula da Silva met with ailing Cuban leader Fidel Castro on Tuesday as Brazil offered Cuba millions of dollars in credit and help in its search for oil in the Gulf of Mexico.

"The meeting is taking place right now," Brazilian Foreign Ministry spokesman Favio Rocha said. Castro received Lula, a former labor leader and admirer of Cuba's leftist revolution, at the end of a 24-hour visit, his second to Cuba as president of Latin America's largest nation.

Castro, 81, has not appeared in public since undergoing stomach surgery that forced him to hand over the running of Cuba to his brother Raul in July 2006.

Rather than a farewell visit by an admirer, Brazilian officials said Lula's trip was an opportunity to deepen ties with Cuba and increase Brazilian investments and economic presence in the communist-run Caribbean nation.

Brasilia has the economic resources, technology and diplomatic clout to help Cuba as it approaches a crucial moment of its history without Fidel at the helm and under pressure from the United States to open up to multiparty democracy, a Brazilian foreign ministry official said.

Lula met earlier with acting President Raul Castro at the Palace of the Revolution government house in Havana where the two countries signed agreements to bolster economic ties.

Brazil's export financing agency COFIG announced approval of credit for food purchases and for the expansion and overhaul of the Che Guevara nickel mine, one of three that produce Cuba's main export commodity.

Brazil is offering Cuba up to $1 billion in credit lines to pay for Brazilian goods and services in road and hotel building and the sugar, biotechnology and drug industries. That includes $600 million for roads.

PETROBRAS COMMITS ITSELF

Cuba secured the commitment of Brazil's state oil company Petrobras to explore for oil in the deep-sea Cuban water of the Gulf of Mexico where six foreign oil firms have already contracted 24 of 59 blocks.

Petrobras president Jose Sergio Gabrielli told reporters the Brazilian giant, a world leader in off-shore drilling, was acquiring and analyzing seismological data and had yet to identify which blocks it would sign risk contracts for. Petrobras had been reluctant to return to Cuba after sinking $16 million in a north-coast well that proved dry in 2001.

Petrobras and the Cuban state oil company CUPET agreed to study the formation of a joint venture to build a lubricants plant in Cuba, a project that has been discussed for years.

The one concrete agreement to emerge from Lula's visit was the licensing of Cuban interferon to Brazil's Oswaldo Cruz Foundation for tropical medicine research.

Lula planned to meet later Tuesday with some of the 600 Brazilians studying to be doctors in Cuba. The Cuban degree is not recognized in Brazil, but his government will set up additional courses and exams at Brazilian universities to allow the Cuban-trained doctors to practice when they return home.

The influential Estado de Sao Paulo newspaper praised the credit splurge for Cuba in a editorial, saying it would pave the way for Brazilian companies to take part in Cuba's necessary modernization and reform process.