Cuba, Russia Sign First Post-Soviet Oil Deal

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"Cuba [has] crude reserves of 21 billion barrels—more than double previous estimates."

Cuba and Russia signed an agreement Monday to allow Russian state oil company Zarubezhneft to explore for and produce oil in Cuba in their first post-Soviet oil pact.

"The contracts that were signed are tremendously important for Russia and Cuba, since they will guarantee cooperation over the next 25 years," said Nikolai Brunich, a Zarubezhneft official after inking the deal with the head of Cuba's state oil company Cubapetroleo (CUPET), Fidel Rivero.

Cuban authorities announced in October 2008 that Cuba had crude reserves of 21 billion barrels—more than double previous estimates.

A major Cuban oil find would be a tropical Cinderella story for the only communist country in the Americas.

An oil importer that relies heavily on oil-rich Venezuela for economic and political support, Cuba's communist regime would be able to sustain itself indefinitely if it were to become energy independent.

Zarubezhneft is among those eyeing Cuba's economic zone in the Gulf of Mexico.

At least seven foreign companies—from Spain, India, Norway, Malaysia, Vietnam, Venezuela and Brazil—are currently working in the zone under contract. U.S. firms are sidelined by the U.S. economic embargo on Cuba, in place since 1962.

Moscow was Havana's main sponsor in the Soviet era, but relations between the two countries stalled after the collapse of the former Soviet Union in 1991.

But both countries have made a push to revive ties in recent months with Russian President Dmitry Medvedev visiting Havana last year and Cuban President Raul Castro traveling to Moscow in January.

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