Vol. XI, No. 11 www.cubatradenews.com November 2009 CubaPetróleo makes move in Africa xpanding the business of CubaPetróleo to a new con- CABINDA tinent, the Cuban state oil company Nov. 3 bought a 5-percentE share in an onshore field in Angola from ROC Oil Dem. Rep. Co. Ltd., a small Australian company that until recently had of Congo The Cuban state oil been the operating partner in a consortium exploring the Cab- company acquired a inda Onshore South Block. 5-percent stake in a Although the Angolan engagement is small and a long shot, strategic exploratory it points to Cuban efforts of leveraging long-time political Cabinda Onshore block in Angola. partnerships to diversify its oil supply sources. Cuba currently Block South depends on Venezuela for half of the island’s energy needs. Map: CTIN Since the days of the struggle against Apartheid South Af- ANGOLA rica, Cuba has been a steadfast supporter of the government of Angola, Africa’s Also see fourth-largest oil producer. Angolan Zarubezhneft, state oil company Sonangol holds 20 Page 8 percent in the Cabinda Onshore South Block into which Cupet invested. Luanda “We included CubaPetróleo at the request of Sonangol,” a source close to ROC told Cuba Trade & Investment News. “There’s a strong relationship between Angola and Cuba, and I guess they want to help out each other.” The strategic enclave of Cabinda is separated from Angola by the Democratic Republic of Congo. While it generates half One Currency of Angola’s oil — mostly offshore — Cabinda has been an area of separatist unrest. Since reaching a peace agreement with a separatist resistance group in 2006, the Angolan gov- ernment has pushed onshore exploration there, while keeping up to 10,000 troops in the enclave. Continued on next page INSIDE Taking the trade show pulse..................................page 3 Solution for frozen accounts?...............................page 5 Chinese firm bidding for refinery project.............page 8 Partners take plunge on fiberoptic cable..............page 9 But it’s not thephotos: Cuban Catherin peso. S. Mesa Pavón See(top), page 7Venevision (top left), By the Numbers: Natural disasters....................page 14 Reuters TV (background) ‘CubaPetróleo,’ from previous page ROC did not reveal how or how much CubaPetróleo is paying for the 5-percent stake. Cabinda Onshore South Block partners Cupet is buying the stake from a company that is facing challenges. ROC has been losing money for the past three Pluspetrol Angola Corporation (Operator) 45% years; trading of the company’s shares on Australia’s AIM Force Petroleum de Angola, S.A. 20% exchange was suspended as of the end of October. The com- Sonangol P&P 20% pany founder died unexpectedly last year. Lacula Oil Company Limited (ROC) 10% Seven months before a subsidiary of ROC, Lacula Oil Co. CubaPetróleo 5% Ltd., farmed out the 5-percent interest (6.25 percent paying interest) to Cupet, ROC sold 45 percent in the Cabinda On- Source: ROC shore South Block to Pluspetrol Angola Corp. After the two deals, ROC retains only 10 percent interest (12.5 percent paying interest) in the block; Pluspetrol is now the operating venture — with Venezuelan state oil company PdVSA to ex- partner. plore for and certify tar oil reserves in the Orinoco Basin. The Under the leadership of Pluspetrol, an Argentina-based block assigned to Cuba is on the margins of the oil zone. company which does the bulk of its business in Latin Amer- Cuba has increased other economic activities in Angola ica, the consortium plans to test the Coco-1 discovery and over the past three years as well. Among others, Cuba is help- drill the Castanha-1 exploration well this year. ROC has spent ing restore the Quibaxe-Bula Atumba road just north of the $445,000 on exploration in the Cabinda block this year. Of capital Luanda and set up manufacturing joint ventures near seven exploration wells in 2008, five came up dry, and two Luanda. contained non-commercial quantities of oil. Cuba is also increasing economic ties with Algeria, another This is not the first CubaPetróleo engagement abroad. In long-time political ally and major oil producer in Africa. Al- 2007, Cupet signed an agreement — under its participation geria has become the biggest supplier of jet fuel to Cuba over in Petroalba, a Venezuelan-Bolivian-Nicaraguan-Cuban joint the past few years. Note from the Publisher Cuba, like all countries of Latin America and the Caribbean, faces challenges ranging from falling exports, tourism and Cuba Trade & Investment News is a monthly publica- remittances to tighter credit markets. The country is adjusting tion of Trade & Investment Publications LLC (TIPs), Tampa, FL, USA. CTIN is distributed to subscribers via to the economic collapse by doing more with less — witness mail or e-mail. the rigorous energy savings campaign, social program cuts, and the 32-percent drop in purchases of U.S. food this year. Publisher Andrew Goddard However, while the embargoed country cannot borrow and P.O. Box 13752 trade its way out of the crisis to the degree its neighbors Tampa, FL 33681-3752 USA do, Cuba’s choices of economic interaction with the outside Tel: 813 839 6988 world are much broader than just a decade ago. A glimpse Fax: 813 831 3811 at this issue confirms this: For one, a regional trade bloc [email protected] now grants Cuba access to a common currency and global www.cubatradenews.com Editor Johannes Werner Internet connectivity. Then, there’s the return of Russian oil, Tel: 941 330 0303 and a venture into Angolan oil. Finally, one of China’s largest [email protected] privately owned companies is beginning to turn Cuba into a regional export platform. Editorial Advisors No matter whether these interactions are between large state Chris Aberle, FCStone, Des Moines entities, Cuba needs the help of private-sector players to make Kirby Jones, US-Cuba Trade Assn., Wash. DC these relations successful. And that’s where you come in. David Lyons, Daily Bus. Review, Miami There’s light on the horizon for U.S. players, too. Check out John McAuliff, FFRD, New York the editorial on the history-making party at the U.S. Interests Phil Peters, Lexington Institute, Washington Section chief’s residence. SUBSCRIPTIONS Call 813 839 6988. One year $350. In Canada and Mexico, add $15 postage. COPYRIGHT NOTICE No part of this publication Andrew Goddard — [email protected] may be copied, photographed or duplicated without TIPs’ consent. 2 Florida Strait Documentation: Havana Fair Taking the trade show pulse n a sign of tough times, Cuban entities signed contracts worth $150 million during the 27th International Havana Fair Nov. 2-7, down from $350 million at lastI year’s fair. Taking a glass-half-full approach, fair director Abraham Maciques said the volume indicates foreign businesspeople’s faith in Cuba, despite “the complex economic situation and the North American blockade.” Meanwhile,” Foreign Trade Minister Rodrigo Malmierca announced at the opening ceremony of the fair that Cuba’s imports had dropped 36 percent by the end of the third quarter, compared to the first three quarters in 2008. He acknowledged that Cuba has been By Johannes Werner late with payments to many foreign suppliers, adding that Cuba “is ready to hold Small party, big deal dialogues to fix that.” Here are some of the ongoings at this year’s edition of the biggest trade fair in e just witnessed one of the Havana. most remarkable displays of WU.S. power in Cuba in 50 years — •For the first time, Russian The Venezuelan pavilion at FIHAV is and only a handful of people in the companies, a total of 50, occupied an anchored by state oil company PdVSA United States watched. entire pavilion by themselves at FIHAV. and its subsidiaries, but the bulk of Maybe that’s because the moment At the entrance of the participants are small didn’t have anything to do with building — which and midsize private- the Fourth Fleet, regime change was awarded a prize sector companies. This efforts, or end-of-embargo bills. It for best pavilion — year, there are 107 wasn’t even about Pilgrim’s Pride a Russian folkloric bilateral cooperation frozen chicken-quarter sales. Maybe orchestra gave two projects with a total Americans didn’t watch because the concerts a day. Cuban value of $1.5 billion. moment was drowned out by the B a s i c I n d u s t r y •The Brazilian noise around the “Peace without Minister Yadira Minister for Borders” mega-concert in Havana Garcia and Russian D e v e l o p m e n t , that got 1.15 million Cubans dancing Deputy Trade and Industry and Trade, on the Revolution Square. Industry Minister Ivan Materov Miguel Jorge, said at FIHAV that no Here’s the moment I am talking attended the signing ceremony for matter whether the opposition wins about: In October, Jonathan Farrar a major oil agreement between next year’s presidential elections in hosted a party in Havana, and 200 Zarubezhneft and CubaPetróleo (see Brazil, close relations will continue. He Cubans came. page 8) in the Russian pavilion. announced that Cuba and a Brazilian Farrar happens to be the new chief •Venezuelan companies signed company are negotiating installation of the U.S. Interests Section, and the letters of intent worth $6 million of a pharmaceutical plant in Brazil 200 guests happened to be, plain and with Cuban entities at the fair, twice with Cuban technology. The minister simple, the cream of the crop among as much than at last year’s event. also announced that construction of Cuban artists.