Russia Oil Companies Eye Gulf Of Mexico Exploration via Cuba

Via DowJones, a report that Russian energy companies OAO Gazprom (OGZPY) and OAO Lukoil Holdings (LUKOY) may revive Soviet-era ties to enter the oil-rich Gulf of the Mexico – through its Cuban backdoor.  As the article notes:

“…Gazprom and Lukoil “are interested by” Cuban hydrocarbons acreage, the country’s Basic Industry Minister Yadira Garcia told Dow Jones Newswires Tuesday at the World Petroleum Congress in Madrid.

She said no deal had been signed but that the two companies have looked into offshore acreage in the Cuban part of the Gulf of Mexico. One person close to state-owned Gazprom said that, more precisely, the company’s oil arm, Gazprom Neft (SIBN.RS), is interested in possible Cuban projects.

During the Cold War, the Soviet Union supplied Cuba with cheap oil, as well as thousands of other goods and commodities. It regarded the “Island of Liberty”, as Cuba was dubbed in official Soviet parlance, as its main ally in the region. With the the Soviet Union’s collapse in 1991, Cuba was left out in the cold as Moscow had neither the desire nor the resources to supply it. Now, the Russians may be back – not to bring oil, but to tap it.

In February, Raul Castro became the country’s new president, replacing his ill brother, Fidel, who had ruled the country for nearly half a century. The change sparked speculation that foreign oil investment would be more welcome.

A decades-old U.S. trade embargo still bars U.S. companies from investing in the Caribbean island, depriving U.S. oil majors of potential supplies close to the fuel-hungry North American market but opening opportunities for Chinese, Indian and Russian players.

China Petroleum & Chemical Corp. (SNP) and India’s Oil and Natural Gas Corp. ( 500312.BY) have signed oil and gas deals with Cuba.

However, U.S. companies remain under pressure from Washington over their Cuban investments. Typically, the Securities and Exchange Commission requires oil companies to disclose any investment in the country and tell their shareholders that they are dealing with countries under embargo. That could be an issue for Lukoil, which has a significant U.S. asset base. Cuba has 243.6 million barrels of proven reserves of oil and 1.058 billion cubic meters of gas, according to the CIA’s Factbook. The U.S. side of the Gulf of Mexico is a key oil region for companies like Royal Dutch Shell PLC (RDSA), BP PLC (BP), Exxon Mobil Corp. ( XOM) and Chevron Corp. (CVX).”

This entry was posted on Wednesday, July 2nd, 2008 at 10:02 am and is filed under Cuba, Cubpet, Gazprom, Lukoil, Russia.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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