Cablegate: More Details of Petrobas-Cupet Deal

R 311831Z OCT 08
FM AMCONSUL RIO DE JANEIRO
TO SECSTATE WASHDC 4687
INFO AMEMBASSY BRASILIA
AMCONSUL SAO PAULO
AMCONSUL RECIFE
WESTERN HEMISPHERIC AFFAIRS DIPL POSTS
USDOC WASHDC
DEPT OF ENERGY WASHDC

UNCLAS RIO DE JANEIRO 000304

STATE FOR WHA/BSC, WHA/CCA, WHA/EPSC, EEB/ESC

E.O. 12958: N/A
TAGS: EPET ENRG CU BR
SUBJECT: MORE DETAILS OF PETROBAS-CUPET DEAL

REF: RIO DE JANEIRO 302

1. Brazilian state-controlled oil company Petrobras signed an
agreement on October 31 to explore for oil in Cuba's still untapped
offshore fields, which Cuban energy officials say may hold more than
20 billion barrels of reserves. Petrobras agreed to make an initial
investment of USD 8 million to begin exploration of a block just off
Cuba's northern coast east of Havana. The contract gives Petrobras
7 years to explore and 25 years to produce oil and gas in a
production-sharing contract with Cuba. Brazilian President Lula and
Cuban President Raul Castro attended the signing ceremony in Havana.

2. Cuba has divided its offshore area in the Gulf of Mexico into 59
blocks, about half of which have been leased to seven companies from
around the world (none of them American due to the U.S. trade
embargo). Petrobras got block number 37 near the onshore fields
from which Cuba currently produces most of its 60,000 barrels per
day of oil. Petrobras' block covers 1,600 square kilometers and
includes waters 1,640 feet (500 meters) to 5,250 feet (1,600 meters)
deep.

MARTINEZ

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