Petrobras Relinquishes Cuba Oil Block

Source: Reuters 3/10/2011, Location: South America

Brazilian oil giant Petrobras has withdrawn from an offshore oil exploration block in Cuba's waters that it leased amid great fanfare in 2008, a Brazilian official said, citing poor prospects.

Marco Aurelio Garcia, foreign policy adviser to President Dilma Rousseff, told reporters in Havana exploratory work off Cuba's northern coast had not shown good results and that Brazil wanted to concentrate on its own oil fields.

Asked if state-run Petrobras had abandoned the offshore Cuba block, he said:

"Yes, that was already decided some time back. Petrobras withdrew from that (block). We're sorry, but the truth is you have to work with tangible elements and there wasn't any security of that in this block".

The decision appeared to be a blow to Communist-ruled Cuba's hopes for an oil bonanza from still-untapped offshore fields it says hold 20 billion barrels of oil.

Petrobras signed up for one of Cuba's 59 offshore blocks in October 2008 in a Havana ceremony attended by then Brazilian President Luiz Inacio Lula da Silva and Cuban President Raul Castro.

Lula, a close ally of former Cuban leader Fidel Castro, had vowed Petrobras would find oil for the Caribbean island, heavily dependent on imports from oil-rich socialist ally Venezuela.

The Petrobras block was just offshore from Cuba's biggest oilfield, east of Havana.

Garcia apologized for Brazil deciding to drop its Cuban block. "We're very sorry and the truth of things is that ... Brazil will have to concentrate on our prospecting," Garcia said in a press conference. "You know that we now have big reserves, maybe one of the biggest reserves in the world."

CUBA HOPES RIDING ON REPSOL

Experts believe Brazil may have more than 50 billion barrels of oil buried under a thick layer of salt as much as 4.4 miles (7 km) below the ocean's surface.


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