Page last updated at 21:37 GMT, Wednesday, 29 July 2009 22:37 UK

Russia to drill for oil off Cuba

A pump at an oilfield in Cuba (file image)
Havana imports most of its oil at a subsidised price from Venezuela

Russia is to begin oil exploration in the Gulf of Mexico, after signing a deal with Cuba, says Cuban state media.

Russian Deputy Prime Minister Igor Sechin signed four contracts securing exploration rights in Cuba's economic zone in the Gulf.

Havana says there may be some 20bn barrels of oil of its coast but the US puts that estimate at five billion.

Russia and Cuba have been working to revitalise relations, which cooled after the collapse of the Soviet Union.

Russia's Zarubezhneft oil concern will work alongside the Cubapetroleo monopoly in the deep waters of the Gulf.

"Every time I travel through the region, I come to Cuba to advance our joint economic-commercial projects, and I take every opportunity to communicate with my colleagues," Mr Sechin told local media.

Under the new agreement, Russia has also granted a loan of $150m to buy construction and agricultural equipment.

Havana imports more than half of its oil, mostly at a subsidised price from Venezuela.

Cuba's share of the Gulf of Mexico was established in 1977, when it signed treaties with the United States and Mexico.

The US Geological Survey (USGS) recently estimated that as much as 9bn barrels of oil and 21 trillion cubic feet of natural gas could lie within that zone, in the North Cuba Basin.

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