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. Last Updated: 07/27/2016

Zarubezhneft Inks Oil Deals With Cuba

HAVANA — State oil company Zarubezhneft signed contracts with Cuba on Tuesday to search for oil along Cuba’s northern coast and said it was looking at procuring more areas for exploration in a step forward for the island’s oil hopes.

Zarubezhneft signed up with state-owned Cuba Petroleos for four almost contiguous blocks — two onshore and two offshore — in the Gulf of Mexico just east of Cuba’s most prolific oil field in Varadero.

Cuba has signed offshore exploration deals with eight other companies, but waters that it says may hold 20 billion barrels of oil remain untapped, with only one test well drilled.

Russia and Cuba have signed accords in recent months for a series of business deals, and Russia has said it will refurbish the Cuban military, which is still using Soviet-era equipment. President Dmitry Medvedev and Cuban President Raul Castro have paid reciprocal visits in the past year.

Cuba’s senior oil advisor, Manuel Marrero Faz, said it would take a while for the Russians to begin seismic testing in the offshore blocks, where the deepest water is about 1,000 meters.

The island currently produces about 60,000 barrels per day of oil, all from onshore wells. It receives about 115,000 barrels per day from Venezuela on favorable terms.

Mexico and the United States, which share the gulf with Cuba, have been producing oil and natural gas from under its waters for decades.

Zarubezhneft chief executive Nikolai Brunich said the company had signed four contracts, all for terms of 25 years.

“We think they have very good prospects,” he said of the blocks.