China agrees to invest in Cuban oil refinery

Chinese Vice-President Xi Jinping toured a joint oil exploration project in Cuba near the end of a three-day visit during which the two countries signed economic accords that include the expansion of a refinery, Cuban state media said Tuesday.

Xi, who is widely expected to be China's next president, called the Camarioca Norte 100 exploratory well and other projects a sign of excellent relations and close economic cooperation. Chinese equipment is operating at the well, Cuban Communist Party newspaper Granma said Tuesday.

Ministry of Basic Industry chief Tomas Benitez said Empresa de Perforacion y Extraccion de Peroleo del Centro, Cuba's leading hydrocarbons concern, is working with Chinese help on several oil exploration and exploitation projects in the country.

Cuba's domestic production is exclusively heavy oil with a high sulphur content, but there are high hopes for offshore Gulf reserves that could contain large quantities of lighter, sweet crude. A test well in 2004 turned up only modest deposits, however.

Benitez said drilling is expected to begin later this year on six deep-water exploration wells with the help of a platform built in China and scheduled to come online starting in October, according to government Web portal Cubadebate.

The agreement on the Cienfuegos refinery is a joint plan by China and Cuban-Venezuelan oil company Cuven Petrol SA, a division of China National Petroleum Corp and Technip Itali SA.

A liquid natural gas project is also in the works, but specifics were not announced.

China is Cuba's number two commercial partner after Venezuela. The Chinese ambassador was recently quoted as saying trade between the two nations was US$1.8 billion last year.

Earlier during Xi's visit, he and Cuban President Raul Castro presided over the signing of 13 accords in areas from tele-communications and transport to biotech and energy.

- AP