Cuba, Venezuela sign new accords on oil, gas
Oil Diplomacy Editor
LOS ANGELES, Dec. 15 — Venezuelan President Hugo Chavez and his Cuban
counterpart, Raul Castro, have signed agreements to expand the capacity
of two refineries in Cuba and to construct a third one.
Altogether, the expansion plans will see Cuba's refining capacity
increased to 350,000 b/d from the current 87,000 b/d, according to a
statement from Venezuela's state-owned Petroleos de Venezuela SA (PDVSA).
Under the agreements, the capacity of Cuba's Cienfuegos refinery will be
stepped up to 150,000 b/d from the current 65,000 b/d, while the
Hermanos Diaz refinery in Santiago will rise to 50,000 b/d from 22,000 b/d.
PDVSA said the proposed refinery in the port city of Matanzas will have
a capacity of 150,000 b/d, and is to be managed by Cuvenpetrol SA—a new
joint venture of PDVSA and Cuba's state-owned Cupet.
PDVSA did not reveal the respective stakes of the two sides in the joint
venture or a schedule for the expansion of the existing refineries or
the construction of the new one.
However, the Venezuelan firm said that Cuvenpetrol will control all
refining interests in Cuba being pursued by the two countries, including
the design and construction of an LNG regasification plant, gas
pipelines, and other facilities.
The agreements signed this week mirror earlier ones between the two
In April 2006, PDVSA entered into an agreement with Cupet to establish a
joint venture company to refurbish and expand the Soviet-built facility
at Cienfuegos that had been neglected since the start of the 1990s, when
Soviet assistance to Cuba ended.
Under the earlier Venezuelan-Cuban JV, the refinery's capacity was
initially raised to 65,000 b/d. The upgraded Cienfuegos refinery was
inaugurated in late 2007 and started operations in January.
The Cienfuegos refinery is expected to close 2008 with production of 20
million bbl of fuel, according to deputy director, Raul Perez, who said
the plan for the refinery envisaged output of 19.4 million bbl for the year.
Cuba imports 100,000 b/d from Venezuela in oil and products under
special financial conditions that include bartering for Cuban goods or
services such as doctors, teachers, and athletic trainers.