Castro Announces New Oil Find

An oil deposit with an estimated 100-million-barrel reserve has been discovered off Cuba's coast by Canadian companies Sherritt International Corp. (S.TO: Quote, Profile, Research) and Pebercan Inc. (PBC.TO: Quote, Profile,Research) , President Fidel Castro said. "We have a new oil discovery ... the first since 1999," Castro said during a closed-door speech to parliament deputies, parts of which were carried on Saturday by official media. "The oil has a density of 18 API ... and contains less than 5 percent sulfur," he said on Friday, pointing out it was of better quality than the heavy crude associated with the area, which averages 16 API and 8 percent sulfur. Cuban oil production was 26 million barrels (71,300 bpd) in 2003 and 653 million cubic meters of gas, the government said, with oil output down slightly in 2004. Cuba consumes a minimum 150,000 bpd, according to the government, importing fuel on preferential terms from Venezuela. Cuban crude comes from onshore wells that dot the northwest coast along Havana am Matanzas provinces. The poor-quality oil is burned in modified power plants and factories and the gas is used to generate electricity and for cooking fuel. The new Santa Cruz field, 33 miles east of the capital, will go into production in 2006, Castro said, while the Canadian firms will drill two new test wells, and explore three other potential deposits nearby in 2005. [more]