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Originally published Thursday, June 28, 2012 at 5:36 PM

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Venezuelan oil company to drill off Cuba

Venezuela's national oil company will join in exploratory drilling for crude in deep waters off Cuba, the company's president said Thursday.

Associated Press

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CARACAS, Venezuela —

Venezuela's national oil company will join in exploratory drilling for crude in deep waters off Cuba, the company's president said Thursday.

State-run Petroleos de Venezuela SA, or PDVSA, is next in line to drill after Malaysia's Petronas completes its work, said Rafael Ramirez, Venezuela's oil minister and president of the company. He said Venezuela has budgeted an estimated $40 million for the project.

Spanish oil company Repsol said last month that it would stop searching for oil off Cuba after hitting a dry well drilled at a cost of more than $100 million.

"Repsol unfortunately didn't have success in its well," Ramirez said, "but that same platform is being used among all the companies that are participating there."

He said Repsol had encountered some problems with the drill but that seismic data has shown "good prospects" in the area off Cuba.

Venezuelan President Hugo Chavez is a close ally of Cuba and sends oil to the island under a long-running deal that allows the Cuban government to pay through the services of doctors, nurses and others who work in the South American country.

Petronas has said it expects to have results of its exploratory drilling by the end of July. It holds rights to explore an area in the Florida Straits known as the Northbelt Thrust.

PDVSA was granted an option to drill next in a different zone as the huge Scarabeo-9 platform is rotated among the companies. The platform was built in Asia with less than 10 percent U.S.-made parts, making it uniquely suited to be used by companies without risking sanctions under the U.S. trade embargo against Cuba.

"Now drilling corresponds to Petronas, and we come immediately after that, but in another block, our block," Ramirez said. "If it's successful, if it's quick, we aren't going to let the platform be idle. We'll immediately take it."

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