Indian, Norwegian firms eye oil off Cuba's coast
HAVANA
India's ONGC Videsh and Norway's Norsk Hydro (Oslo: NHY.OL - news) are joining forces with Spain's Repsol (Madrid: REP.MC - news) in a bid to find crude oil off Cuba in the Gulf of Mexico, diplomatic sources said.
The news comes as US lawmakers, with oil prices soaring, are grumbling about prospecting in Cuban waters while US environmental laws make it all but impossible for US firms to do so in nearby US waters.
US media have reported that China was involved in the prospecting but Cuba has not announced a Chinese deal.
The deal with ONGC Videsh and Norsk Hydro, to be signed officially in Havana May 23, technically is not a new contract.
"Those companies are joining the existing one with Repsol to share risks," a European diplomat told AFP privately.
Repsol has rights to six of the 59 prospecting areas the Cuban government has been auctioning off since 1999. It carried out its first drilling in 2004 and while oil was found, Repsol said the quality of that crude was not commercial grade.
Since then Repsol has been looking for partners to share the investment burden, and ONGC Videsh and Norsk Hydro each will be picking up 30 percent of the expenses, other sources said.
The Gulf's waters were divided into economic exclusion zones of the United States, Mexico and Cuba under a deal which is still in effect signed during the government of then-US president Jimmy Carter.
Among other companies with prospecting rights if not projects there are Canada's Sherrit International and Brazil's state oil giant Petrobras (PETR3.SA - news) .
Cuba has invited US firms to take part but the US economic embargo bars them from doing so.
Cuba produces about a third of the oil it consumes, with the rest imported under favorable terms from its key ally Venezuela.
The New York Times reported Tuesday that "With only modest energy needs and no ability of its own to drill, Cuba has negotiated lease agreements with China and other energy-hungry countries to extract resources for themselves and for Cuba.
"Cuba's drilling plans have been in place for several years, but now that China, India and others are involved and fuel prices are unusually high, a growing number of lawmakers and business leaders in the United States are starting to complain. They argue that the United States' decades-old ban against drilling in coastal waters is driving up domestic energy costs and, in this case, is giving two of America's chief economic competitors access to energy at the United States' expense," the Times reported.
India's ONGC Videsh and Norway's Norsk Hydro (Oslo: NHY.OL - news) are joining forces with Spain's Repsol (Madrid: REP.MC - news) in a bid to find crude oil off Cuba in the Gulf of Mexico, diplomatic sources said.
The news comes as US lawmakers, with oil prices soaring, are grumbling about prospecting in Cuban waters while US environmental laws make it all but impossible for US firms to do so in nearby US waters.
US media have reported that China was involved in the prospecting but Cuba has not announced a Chinese deal.
The deal with ONGC Videsh and Norsk Hydro, to be signed officially in Havana May 23, technically is not a new contract.
"Those companies are joining the existing one with Repsol to share risks," a European diplomat told AFP privately.
Repsol has rights to six of the 59 prospecting areas the Cuban government has been auctioning off since 1999. It carried out its first drilling in 2004 and while oil was found, Repsol said the quality of that crude was not commercial grade.
Since then Repsol has been looking for partners to share the investment burden, and ONGC Videsh and Norsk Hydro each will be picking up 30 percent of the expenses, other sources said.
The Gulf's waters were divided into economic exclusion zones of the United States, Mexico and Cuba under a deal which is still in effect signed during the government of then-US president Jimmy Carter.
Among other companies with prospecting rights if not projects there are Canada's Sherrit International and Brazil's state oil giant Petrobras (PETR3.SA - news) .
Cuba has invited US firms to take part but the US economic embargo bars them from doing so.
Cuba produces about a third of the oil it consumes, with the rest imported under favorable terms from its key ally Venezuela.
The New York Times reported Tuesday that "With only modest energy needs and no ability of its own to drill, Cuba has negotiated lease agreements with China and other energy-hungry countries to extract resources for themselves and for Cuba.
"Cuba's drilling plans have been in place for several years, but now that China, India and others are involved and fuel prices are unusually high, a growing number of lawmakers and business leaders in the United States are starting to complain. They argue that the United States' decades-old ban against drilling in coastal waters is driving up domestic energy costs and, in this case, is giving two of America's chief economic competitors access to energy at the United States' expense," the Times reported.
posted by Alice at
Wednesday, May 10, 2006
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