cuba, venezuela: A strategic alliance
Spain’s Repsol-YPF, PDVSA and many of its rivals are looking for new oil fields around Cuba, one of the most under-exploited areas in the world.If they were to make a major find, or several significant ones, the shift could turn regional geo-politics upside down, potentially turning Castro’s cash-strapped, oil import-dependent regime into a prosperous oil exporter able to fund itself well into the future.The announcement came as Venezuelan President Hugo Chavez paid a visit to Cuba to bolster the countries’ economic cooperation, and open a PDVSA office in Cuba with Castro looking on.Spain’s oil leader Repsol-YPF has also been prospecting off Cuba, while American multinationals are shut out due to US sanctions against Cuba.PDVSA will work with Cuba “in prospecting and production (on new wells located in territorial waters) as well as in refining and marketing”, PDVSA said in a statement.In addition, PDVSA is to launch with the Cuban firm CUPET a lubricant plant, and build a facility for storing residual petrochemicals -- 600,000 barrels a day -- in Matanzas, east of Havana, and an oil port, the company said.PDVSA will also take part in the reopening of the oil refinery and terminal in Cienfuegos, on Cuba’s southern coast, a facility built with Soviet technology in 1990 but which long since come to a halt due to its high energy consumption.The Venezuelan giant framed the Cuban deal in regional terms, despite its overwhelming potential significance to Castro’s government and economic plans.Fuel has been the Achilles’ heel of Cuba’s economy for years, and Havana has been unable to complete a Soviet-technology nuclear reactor that was planned for Juragua in Cienfuegos Province.In 2000 Venezuela, Latin America’s only member of the OPEC oil grouping, agreed to deliver 53,000 barrels of crude a day to Cuba, with a special credit rate for Chavez’s ally Castro. But that number has soared to 80,000-90,000 barrels a day, PDVSA chief Rafael Ramirez said in Havana.Venezuela is the world’s fifth-largest oil exporter with a daily production of 2.6 million barrels.