Havana, Dec 26 (Prensa Latina) An oil field discovery, the promising evolution of the nickel industry and benefits from strengthening ties with China and Venezuela, are among the good news given by president Fidel Castro to the Cuban people.

The president broke the good news at the closing session of the parliament on December 24, when the state budget for 2005 was also approved, ratifying the emphasis on social policy and justice.

According to a technical report, he said the new oil deposit is 34 miles east of Havana, in Santa Cruz del Norte locality and its probable reserves are estimated at 14 million tons.

Oil was found drilling the well Santa Cruz 100, which showed a crude 18 degrees API, that is, lighter than the Varadero or Yumuri crude, found previously along the northwestern coastline.

Productivity of this well and other confirmed parameters allow to affirm a new oil deposit has been discovered, explained president Fidel Castro to parliament members.

The Cuban head of state said the possibilities of finding more oil are not limited to this area, because a prospection carried out by Sherritt-Peberco of Canada in the zone revealed other three joining structures that could yield similar results.

The experts estimate that if these studies are confirmed, extraction from the northwestern coast could extend to Matanzas Bay, about 62 miles east of Havana.

Cuba produces limited quantities of crude and each year its economy is affected by high energy bills of imported oil.

The concession of credits for millions of dollars by China, some of them long-term, wide periods of grace and low or no interest rates attached, were mentioned by president Fidel Castro as examples of excellent relations between Beijing and Havana.

The Asian giant, on its own initiative, postponed for 10 years the beginning of payment on the financial obligations contracted through government credits given to Cuba from 1990 to 1994, for projects still on the ammortization stage.

Among the new credits received stands out one for 500 million dollars given by Chinese banks to create a new joint venture that will built a ferronickel processing plant with an installed capacity for 22,500 tons of nickel content per year for 25 years.

Both parts will also create a joint enterprise in a new nickel deposit located in San Felipe, Camaguey which will require a 1.3 billion dollar investment from Chinese banks and which will yield 50 thousand tons of nickel a year.

Those companies will be owned 51 per cent by Cuba and 49 per cent by China.

It was also agreed that Cuba will supply China four thousand tons a year of sinter-nickel from 2005 to 2009.

Besides those agreements, Cuba studies with Sherritt corporation of Canada an investment by the foreign partner of one billion dollars to increase production of nickel plus cobalt by 53 thousand tons and take to a total 85 thousand tons.

As to credits from China, some will be destined to the development of infrastructure works as equipment for ports and machinery for ship building, improvement of trains, telecommunications, oil and nickel industries.

With Venezuela, meanwhile, Cuba agreed to analyze a program of fuel supplies for 2005, which together with domestic crude production will meet essential energy needs.

It was also agreed that services rendered to Venezuela will be based on widely preferential tariffs, allowing to compensate for the goods and services received by Cuba from the South American nation in equally favorable terms.

The Bolivarian nation offered to finance projects in Cuba concerning infrastructure works, above all pavement of roads and facilities for the supply of domestic crude.

Under negotiation there is a project for a Venezuelan company to supply coal for the Chinese-Cuban project of a plant to produce ferronickel and the study to create a three-party company to produce stainless steel in Venezuela.

Venezuela and the Sherritt group have proposed to build west of Havana in the Mariel locality, a thermoelectric plant that runs on coal, besides using local facilities to distribute crude to other Caribbean nations.

Venezuelan oil company PDVSA negotiates the creation of an association at the supertankers terminal of Matanzas and to acquire part of the Cienfuegos oil refinery which will guarantee its completion and put in operation.

Fidel Castro also announced the Brazilian government will give Cuba a credit to buy food products from that country in 2005. The interest rate will be only 2.5 per cent a year and payments will begin three years after each delivery, explained the Cuban leader, defining as generous the offer made by his Brazilian colleague, Luis Inazio Lula da Silva.

This will allow to cover in part damages caused by the worst drought Cuba has known in the last 75 years as well as devastations caused by hurricanes Charley and Ivan.

The statesman also reflected on the benefits gained by the substitution of the US dollar for the Cuban Convertible Peso.

But the president needed no words to convey the best of the good news to the deputies, he just had to come in walking to the meeting, evidently recovered from the accidental fall he had last October.

(Minrex) Dec 26 2004