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Exploratory Oil Drilling Done Off Cuba

Drilling of an exploratory well in Cuba's virgin Gulf of Mexico waters that could make the Communist nation an oil exporter and undermine the U.S. embargo has been completed, a senior official said.

Work on the well by Spain's Repsol YPF began in June and captured the attention of the industry and governments due to its potential economic and political consequences.

"The drilling has ended and the Spanish company is assessing the results. We don't know if there is good quality oil yet. We expect to be informed in two weeks," the Cuban official, who spoke on the condition he was not identified, said on Saturday evening.

The oil industry is watching closely the first ever well sunk in Cuba's 43,000-square-mile exclusive economic zone in the Gulf, which may hold large quantities of medium-grade crude.

A commercially viable find could transform the cash-strapped island from oil importer to petroleum exporting nation, adding pressure on the United States to lift its four-decades-old trade embargo against President Fidel Castro's government.

The senior Cuban official said Repsol was analyzing samples to determine their quality and whether commercial production would be feasible.

Repsol believes up to 1.6 billion barrels of oil may be located where the drill bit went down 18 miles off the northwest coast of Cuba in waters one mile deep.


Experts said if the results were positive Repsol would take at least four years to develop production. But they believe U.S. trade sanctions could be a problem since much of the equipment needed to extract oil at such a depth is American.

Cuba's exclusive economic zone runs along the north coast and down past the western tip of Cuba. It was parceled into 59 blocks for foreign exploration in 1999.

Repsol took the rights in 2000 to the six blocks closest to shore and Cuba's oil-producing northwest coast. Sherritt International, a Canadian mining and energy company, recently opted for four adjoining blocks.

Industry sources said companies from China, Britain, Brazil, Venezuela and elsewhere were considering exploration, but waiting for the Repsol results and the U.S. reaction.

The president of Brazil's state oil company Petrobras was expected in Cuba at the weekend to discuss exploration and the creation of a lubricants joint-venture, but his visit was postponed at Cuba's request, Demarco Jorge Epifanio, Petrobras coordinator of Cuba projects, said.

Cuba has desperately searched for oil with foreign partners since the Soviet Union's demise deprived it of 255,000 barrels per day on preferential terms.

There have been some minor discoveries along the northwest coast's traditional oil belt, which produces an extremely heavy crude burned in the modified boilers of power plants and factories on the island.

Cuba's oil and gas production has increased from less than 20,000 barrels per day a decade ago to the equivalent of 75,000 barrels, half the country's current consumption.

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