CUBA NEWS
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Cuba resumes diplomatic contacts with
eight EU countries
HAVANA, 3 (AFX) - The Cuban government
said it is renewing diplomatic contacts
with eight European Union countries that
have stopped inviting 'dissidents' to official
embassy functions.
'Cuba has taken the decision to re-establish
official contacts with the ambassadors of
France, Great Britain, Germany, Italy, Austria,
Greece, Portugal and Sweden,' Foreign Minister
Felipe Perez Roque told a press conference.
The EU froze relations with the communist
government in June 2003 following a crackdown
on opposition to President Fidel Castro.
Seventy-five dissidents were rounded up
and jailed for terms of between six and
28 years.
Fourteen have been freed again since then
in a move seen partly as a gesture to win
over EU nations.
Cuba Looks to Further Centralize Economy
By Anita Snow, Associated
Press Writer. Dec 30.
HAVANA - Moving to further centralize the
communist state's control over the economy,
the government's Central Bank announced
Thursday that individual state companies
would no longer handle foreign exchange.
Beginning Saturday a single government
account will be established for foreign
currency and for convertible Cuban pesos,
an exchangeable currency that trades 1-1
to the U.S. dollar and that is now used
as the primary form of legal tender on the
island.
Under a series of steps to be introduced
in the coming months, state enterprises
will relinquish control over foreign exchange
and convertible Cuban peso accounts. Any
profits from sales or services will have
to be deposited into that single government
account.
The move will severely limit any remaining
autonomy inside the various state enterprises.
It will also effectively turn back an earlier
government policy calling for state enterprises
to move toward self-financing by pouring
earned foreign income back into their operations.
Also, a state company that now wishes to
buy any goods or services available only
in foreign currency will need special approval
from a new Foreign Exchange Approval Committee.
The announcement was the latest in a series
of moves in recent months aimed at reasserting
government control over the economy in general,
and over foreign currency income in particular.
In late October, the government moved to
eliminate U.S. dollars from general circulation
and replaced it with the convertible Cuban
peso as the primary form of legal tender
for most products and services in the Caribbean
country.
Cuba's convertible currency, like that
of many other smaller nations, has no value
outside the country. But Cuba relies heavily
on imported goods that must be purchased
with dollars or other convertible foreign
currencies. After the collapse of the Soviet
Union, with which Cuba conducted barter
trade, Havana's need for hard currency grew.
The currency switch in October appeared
aimed at eliminating Cuba's dependence on
the money of its No. 1 enemy - the United
States - for hard currency reserves, building
up new sources of convertible foreign funds
and reasserting centralized control over
the economy.
Cuba moves to clamp down on hard currency
control after oil find
HAVANA, 30 (AFP) - Cuba made a surprise
move to tighten the government's grip on
hard currency, on the heels of an oil find
that breathes new life into President Fidel
Castro's communist rule.
The Americas' only one-party communist
government said in a statement that from
January 1, all revenues from state-run businesses
must be channeled though Cuba's central
bank.
"Next year, there will be a considerable
increase in financial in-flows from abroad,"
thanks to deals with China, Venezuela and
an oil exploration and production deal with
Canada's Sherritt, explained the note, signed
by bank chief Francisco Soberon.
Castro, 78, announced on December 25 that
oil reserves of at least 100 million barrels
had been found off the north coast near
Santa Cruz del Norte, east of Havana, which
is to be developed by a Cuban state firm
in cooperation with Sherritt.
Led by Castro since 1959, Cuba has been
in dire economic straits since the collapse
of the former Soviet bloc, which once provided
subsidized food and fuel.
Havana has been unable to complete a Soviet-technology
nuclear reactor that was planned for Juragua.
Energy for years has been the Achilles heel
of its economy.
And with its oil-burning plants, Cuba has
had to rely on Venezuelan imports, while
its own crude -- which is high in sulfur
-- has required costly cleaning to be used.
Venezuela, Latin America's only OPEC member,
delivers 53,000 barrels of crude a day to
Cuba.
Now, the new find -- Cuba's first since
1999, and cleaner than other homegrown crude,
according to Castro -- catapults Havana
toward energy self-sufficiency.
Cuba's future capital movements "must
be tightly controlled to ensure their optimum
use," Soberon's note stressed.
The shift would make the central bank the
only Cuban institution authorized to move
hard currency; state businesses would have
to seek special authorization to do so.
In November, Castro took the US dollar
out of circulation in Cuba, more than a
decade after having made it co-legal tender.
Cubans, having no alternative, exchanged
their greenbacks for "convertible pesos"
usable only on the island. The government
invented the currency -- which Cubans call
"chavitos" or "Monopoly (board
game) money" -- to make up for the
short supply of dollars.
When he met Chinese President Hu Jintao
in November, Castro threw the spotlight
on precisely how differently his government
has adjusted to the post-Soviet era: He
told his key communist ally that Cuba would
pursue social goals its own way -- that
is, he has no plan to embrace international
capitalism as China has.
Earlier, Castro spent a staggering almost
10 hours on television in four broadcasts
trying to explain power shortages that led
to the dismissal of Basic Industries Minister
Carlos Portal.
Sherritt and Pebercan shares rise after
news of Cuban oil find
TORONTO, 30 (CP) - Shares in Sherritt International
Corp. and Pebercan Inc. surged to new highs
Thursday after news of a joint oil discovery
off the coast of Cuba.
First word of the find came from communist
dictator Fidel Castro, who told Cuba's National
Assembly in a closed session Friday that
the newly discovered deposit - Cuba's first
such find since 1999 - contains up to 100
million barrels. Castro said production
off Santa Cruz del Norte, east of Havana,
could begin in 2006.
Shares in Montreal-headquartered Pebercan,
which has a 55 per cent working interest
in the play and is the operator, jumped
from Friday's level of $4.50 to close at
$6.10 Wednesday, then hit $9.20 Thursday
morning before closing at $7.50. The stock
was worth barely $1.50 a year ago.
Sherritt, with a 45 per cent working interest,
closed at $10.07, up from $9.51 Wednesday
and $8.99 Friday, and from a 52-week low
of $6.02.
Pebercan said the oilfield could measure
as much as 20 square kilometres, and an
initial analysis of oil from the Santa Cruz
100 well, flowing at 1,300 barrels per day,
showed a higher grade of oil than at other
Cuban fields.
The company added that "results of
the ongoing supplemental analysis will be
communicated during the course of January
2005," and two delineation wells will
be drilled in the first half of the year.
Cuba currently produces 75,000 barrels
a day, about half of what it consumes. Industry
experts believe Cuban waters in the Gulf
of Mexico could contain substantial deposits,
although earlier exploration led to only
modest discoveries.
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