India to explore for oil in Cuba's Gulf waters
Stock Market News and Investment Information | Reuters.com
By Marc Frank and Anthony Boadle
HAVANA, Sept 6 (Reuters) - India, an importer of oil hungry for new reserves, will explore two blocks of Cuba's Gulf of Mexico waters and is negotiating a share of other blocks held by Spain's Repsol YPF (REP.MC: Quote, Profile, Research), an Indian official said on Tuesday.
"Two blocks have been given to us by the Cuban government to explore ... We are hopeful we will find oil," junior foreign minister Rao Inderjit Singh said at the end of a visit to Cuba.
"We are also negotiating an agreement with Spanish company Repsol for taking over 30 percent of their share," Singh said at a news conference.
India hopes Cuba will approve the deal once negotiations, which include Norway's Norsk Hydro (NHY.OL: Quote, Profile, Research), are completed.
Singh said India's fast-growing economy is energy dependent. Its oil drilling company ONGC Videsh Ltd, the overseas arm of the of India's state-owned Oil and Natural Gas Corp. (ONGC.BO: Quote, Profile, Research), has invested more than $4 billion looking for oil worldwide and now wants to explore in Cuba, he said.
An ONGC Videsh senior executive said the company successfully bid on blocks 34 and 35 in Cuba's potentially oil-rich Gulf of Mexico waters.
"We are very interested and simply waiting for the final signing before beginning work," he told Reuters.
High oil prices and the international scramble to buy up potential resources has increased interest in Cuba's largely unexplored Gulf of Mexico waters, a Cuban industry source said.
He said contracts for the blocks would be signed with India in September and other blocks would go to another Asian country's state-run oil company soon.
Cuba's 43,250-square-mile (112,000 sq km) Exclusive Economic Zone was divided into 59 blocks and opened to foreign exploration in 1999. The U.S. Geological Survey estimated there could be 5 billion barrels of oil in the area.
To date, Repsol and Canada's Sherritt International (S.TO: Quote, Profile, Research) have taken six blocks and four blocks, respectively, off the northwest coast.
Repsol reported the first deep-water well drilled in Cuba in 2004 discovered noncommercial quantities of good quality oil, and the company would drill again in 2006.
"The U.S. Geological Survey estimated a mean of 4.9 billion barrels of undiscovered oil, a mean of 9.8 trillion cubic feet of undiscovered natural gas and a mean of 0.9 billion barrels of undiscovered natural gas liquids in the North Cuban basin of Cuba," the agency said of the area in a May report.
U.S. economic sanctions on the Communist-run Caribbean island prohibit U.S. companies from exploring Cuban waters.
"We have excellent relations with Cuba. We approached the government here and they were kind enough to meet our request," said Anil K. Jain, a director of India's Ministry of Petroleum.
"India is one of four or five countries in the world that have deep-sea exploration experience and that is why the blocks and our work with Repsol interest us so," Jain said.
The Indian government is encouraging ONGC to bid for foreign oil assets as domestic output has declined and energy demand from Asia's third-largest economy is expected to grow rapidly.
China's giant oil and gas company, Sinopec Corp., signed an agreement with Cuba this year to jointly produce heavy oil with the state-owned oil company Cupet in westernmost Pinar del Rio province, with drilling expected to begin in 2006.
Cuba imports around 100,000 bpd of oil and derivatives, with preferential financing, from Venezuela.
By Marc Frank and Anthony Boadle
HAVANA, Sept 6 (Reuters) - India, an importer of oil hungry for new reserves, will explore two blocks of Cuba's Gulf of Mexico waters and is negotiating a share of other blocks held by Spain's Repsol YPF (REP.MC: Quote, Profile, Research), an Indian official said on Tuesday.
"Two blocks have been given to us by the Cuban government to explore ... We are hopeful we will find oil," junior foreign minister Rao Inderjit Singh said at the end of a visit to Cuba.
"We are also negotiating an agreement with Spanish company Repsol for taking over 30 percent of their share," Singh said at a news conference.
India hopes Cuba will approve the deal once negotiations, which include Norway's Norsk Hydro (NHY.OL: Quote, Profile, Research), are completed.
Singh said India's fast-growing economy is energy dependent. Its oil drilling company ONGC Videsh Ltd, the overseas arm of the of India's state-owned Oil and Natural Gas Corp. (ONGC.BO: Quote, Profile, Research), has invested more than $4 billion looking for oil worldwide and now wants to explore in Cuba, he said.
An ONGC Videsh senior executive said the company successfully bid on blocks 34 and 35 in Cuba's potentially oil-rich Gulf of Mexico waters.
"We are very interested and simply waiting for the final signing before beginning work," he told Reuters.
High oil prices and the international scramble to buy up potential resources has increased interest in Cuba's largely unexplored Gulf of Mexico waters, a Cuban industry source said.
He said contracts for the blocks would be signed with India in September and other blocks would go to another Asian country's state-run oil company soon.
Cuba's 43,250-square-mile (112,000 sq km) Exclusive Economic Zone was divided into 59 blocks and opened to foreign exploration in 1999. The U.S. Geological Survey estimated there could be 5 billion barrels of oil in the area.
To date, Repsol and Canada's Sherritt International (S.TO: Quote, Profile, Research) have taken six blocks and four blocks, respectively, off the northwest coast.
Repsol reported the first deep-water well drilled in Cuba in 2004 discovered noncommercial quantities of good quality oil, and the company would drill again in 2006.
"The U.S. Geological Survey estimated a mean of 4.9 billion barrels of undiscovered oil, a mean of 9.8 trillion cubic feet of undiscovered natural gas and a mean of 0.9 billion barrels of undiscovered natural gas liquids in the North Cuban basin of Cuba," the agency said of the area in a May report.
U.S. economic sanctions on the Communist-run Caribbean island prohibit U.S. companies from exploring Cuban waters.
"We have excellent relations with Cuba. We approached the government here and they were kind enough to meet our request," said Anil K. Jain, a director of India's Ministry of Petroleum.
"India is one of four or five countries in the world that have deep-sea exploration experience and that is why the blocks and our work with Repsol interest us so," Jain said.
The Indian government is encouraging ONGC to bid for foreign oil assets as domestic output has declined and energy demand from Asia's third-largest economy is expected to grow rapidly.
China's giant oil and gas company, Sinopec Corp., signed an agreement with Cuba this year to jointly produce heavy oil with the state-owned oil company Cupet in westernmost Pinar del Rio province, with drilling expected to begin in 2006.
Cuba imports around 100,000 bpd of oil and derivatives, with preferential financing, from Venezuela.
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