Cuba & Energy: A news chronology

(From stories compiled by FOCAL, the Canadian Foundation for the Americas)

2005

Oil and Other Resources

January 8: Iran and Cuba reached an agreement on a project to repair, maintain and renovate Cuba's power industry. The Iranian ambassador to Havana, Ahmad Edrisian, visiting Yadira Garcia, Cuban Minister of Basic Industries, evaluated cooperation ties between the two countries. (MNA, 8/1/05)

January 11: An innovative project entitled, the "Oil Logistics Platform" will be extended throughout Cuba in an effort to optimize the nation's oil reception and distribution network. A study headed by Dr. Roberto Gonzalez of the Carlos Rafael Rodriguez University in Cienfuegos, was first used in a pilot project in the central Cuban province. (Radio Habana Cuba, 11/1/05)

January 25: Consumers were taken aback by a new hike in the price of diesel fuel, which in less than 8 months has gone from 45¢ per liter before May 2004 to 55¢, and now 75¢. There have been no reports in the local media regarding the new increase, and Oro Negro and Cubapetróleo gas station operators said that they were given little notice before the price rise went into effect. They explained that the measure applies to the general public and private enterprises, which pay in cash; government enterprises and institutions will not be affected. (EFE, 25/1/05)

January 27: Brazil's state oil giant Petrobras, now boosting energy co-operation in Cuba, could team up with Canada's Sherritt International Corp. or Spain's Repsol as it moves to explore two new prospecting zones off Cuba, the Brazilian ambassador in Havana said. After passing on two zones earlier selected for it to explore in 2002, "Petrobras is waiting to find out its [new] designated zones to carry out deep-water offshore prospecting," ambassador Tilden Santiago said. "We don't know yet if we are going to do it with the Spaniards [Repsol], the Canadians [Sherritt] or alone," he added. (National Post, 31/1/05)

January 31: Cuba and China signed a contract in Havana providing for the Asian giant's participation in extracting oil from a deposit off the island's north shore, the press reported. The deal is between Cubapetroleos and the Chinese oil company Sinopec, said the official daily newspapaer Granma. In December, Fidel Castro announced discovery of oil at a site offshore from Santa Cruz del Norte, some 55 kilometers (33 miles) east of Havana. The deposit is believed to hold some 100 million barrels of "light" crude, or the equivalent of 14 million tons. (EFE, Prensa Latina, 31/1/05)

February 8: China's oil giants began cultivating their virgin soil in Cuba. China Petroleum & Chemical Corporation (Sinopec), as the first comer, has inked a contract with Cuba Oil Company (Cubapetroleo) to jointly exploit oil in the Caribbean country. Under the terms of their contract, the two sides will join forces to prospect and exploit a potential oil-producing region. Chinese experts believe it is a significant beginning of the cooperation between China and Cuba in the petroleum industry. (SinoCast, 8/2/05)

March 22: Chinese oil drilling equipment has begun arriving in Cuba as state-run Cubapetroleo (Cupet) and its foreign partners prepare to significantly increase drilling along the northwest coast, industry sources said. "Four service units and a small rig have arrived and we are waiting for more," said a Cuban oil service manager, asking his name not be used. There are currently five rigs operating along the northwest heavy oil belt, an 80-mile (128-km) stretch of coast in Havana and Matanzas provinces from whence come all of Cuba's 70,000 to 80,000 barrels per day of heavy crude at 8 API to 18 API and with a high sulfur content. The poor-quality oil is burned in modified power plants and factories. Cuba imports a similar amount of oil and derivatives, with preferential financing from Venezuela. Canadian companies Sherritt International (S.TO) and Pebercan Inc. (PBC.TO), in conjunction with Cupet, account for 60 percent of the output, plus 2 million cubic meters of natural gas per day. (Reuters, 22/3/05)

March 29: Montreal based PEBERCAN Inc. announced that a new well in the Northern coast of Cuba, SEBORUCO 9, was successfully completed. This new well was drilled to optimize the drainage of the eastern part of the field. First tests show a good potential for this well with production ranging from 1200 to 1500 barrels per day. PEBERCAN Inc. is involved in the exploration, development and operation of oil reserves in Cuba. Its mining domain includes five concessions covering 6,055 km2. (CNW Group, 29/3/05)

April 6: The operator of China's second-largest Shengli oilfield is stepping up overseas exploration, spending more on such ventures this year as the world's No. 2 oil user grapples with falling reserves, officials said. Shengli Oilfield Administration Bureau, a unit of state-run Sinopec Group, will spend about $40 million drilling for oil and gas in Cuba, Iran and central Asia in 2005, company officials said. "This will be the heaviest spending in a year and we expect the pace to continue in the next few years," a Shengli executive told the press. Shengli, which is among the first Chinese companies to venture abroad, will sink a total of eight wildcat and appraisal wells this year, four in Kazakhstan, two in Iran, and one each in Cuba and Kyrgyzstan. (Reuters, 6/4/05)

April 19: Cuba has gradually increased oil consumption to 173,000 barrels per day, thanks to rising imports despite high prices, according to preliminary figures from the country's National Statistics Office. The NSO reported local production last year declined to 68,000 bpd, the same level as in 2002, after increasing slightly in 2003. Petroleum and derivative imports increased from 84,000 bpd in 2002 to 98,000 bpd in 2003 and 105,000 bpd last year, the NSO said. Canadian companies Sherritt International (S.TO) and Pebercan Inc. (PBC.TO), in conjunction with state-run Cubapetroleo (Cupet), account for 60 percent of the output, plus 2 million cubic meters of natural gas per day. (Reuters, 19/4/05)

April 26: Venezuela's state-run company Petróleos de Venezuela, or PDVSA, will open an office in Cuba during a meeting aimed at boosting trade between the two Caribbean nations, the Venezuelan government news agency reported. The PDVSA office will be located in Havana, according to the Bolivarian News Agency. Hoping to further deepen economic relations, an estimated 400 Venezuelan business people will begin exhibiting their goods during a four-day trade fair in Havana. (AP, BNAmericas.com, 26/4/05)

April 27: Venezuela's government-controlled Banco Industrial de Venezuela and the state oil company Petroleos Venezolanos were opening offices in Havana -- moves that could help the growing bilateral trade. Venezuela has increased oil shipments to Cuba to 80,000-90,000 barrels a day and will make Havana the headquarters for its Caribbean energy operations, Venezuelan Oil Minister Rafael Ramirez said. Venezuela's state oil company, Petroleos de Venezuela (PDVSA), will open an office in Havana when President Hugo Chavez visits Cuba to strengthen a growing political and economic alliance. Ramirez said PDVSA is now looking beyond oil supplies to the building of storage and tanker terminal facilities in Cuba, and exploring joint ventures to refine petroleum for distribution to other Caribbean islands. An agreement to build a lubricants plant in Cuba will be signed, and Brazil's state oil company, Petrobras (PETR4.SA) (PBR.N), has been invited to join the venture, he said. Brazilian diplomats said no agreement has been reached with Petrobras in ongoing talks on the lubricants project. Venezuela, the world's fifth-largest oil exporter, is also studying involvement in the completion of the Soviet-built refinery in Cienfuegos, Cuba, to process Venezuelan crude for distribution in the Caribbean. Another refinery project under study by PDVSA would be in Matanzas, Cuba's main tanker port, he said. (La Jornada, AP, Reuters, 27/4/05)

April 28: Venezuelan state oil giant Petroleos de Venezuela SA will prospect for, pump and refine oil from Cuba's Gulf of Mexico economic zones, the company announced. The announcement came as Venezuelan President Hugo Chavez paid a visit to Cuba to bolster the countries' economic co-operation, and open a PDVSA office in Cuba. Spain's Repsol YPF SA also has been prospecting off Cuba. PDVSA will work with Cuba "in prospecting and production [on new wells located in territorial waters] as well as in refining and marketing," PDVSA said. In January, Brazilian ambassador Tilden Santiago said Brazil's state oil giant Petrobras SA, also now boosting energy co-operation in Cuba, could team up with Canada's Sherritt International Corp. or Repsol as it moves to explore two new prospecting zones off Cuba. Cuba is paying for the estimated $1 billion a year oil bill with medical and educational services. Officials said 30,000 Cuban doctors and medical personnel are working in Venezuela. (The Globe and Mail, Reuters, 28/4/05)

May 4: Canadian mining and energy company Sherritt International posted first quarter operating profits from its oil and gas business in Cuba of Cdn$21.1mn (US$16.9mn), up 21.3% from Cdn$17.4mn in the first quarter of 2004 (1Q04) , the company said in its 2005 first quarter earnings statement. Revenues rose to Cdn$49.7mn from Cdn$47.6mn in 1Q04 due to higher realized prices, partly offset by lower production volumes. The average price in Cuba rose to US$28.40/b in the quarter from US$24.21 in 1Q04. Sherritt's net oil sales in Cuba fell to 17,523b/d from 19,964b/d in 1Q04 and first quarter gross operated Cuban oil production fell 9.13% to 39,219b/d from 43,157b/d in 1Q04. This figure excludes production from Santa Cruz on block 7 because the field has not yet been declared commercial. Following on from promising initial results from the Santa Cruz exploration well in December, 2004 [that tested at a rate of 1,300b/d], Sherritt has begun drilling two appraisal wells in this field," the statement said. "If initial results are borne out, commercialization of the field is anticipated around the end of the year." Four drilling rigs were active during the quarter, drilling a total of seven development wells and one exploratory well. Sherritt sells all heavy oil produced in Cuba to Cuban government agencies, generally at selling prices based on 79-83% of the Gulf Coast fuel oil no. 6 reference price. The impact of higher fuel oil prices was partially reduced by the strength of the Canadian dollar. (BNAmericas, 4/5/05)

May 9: The 6th International symposium over the use of hydrogen as fuel was inaugurated at the National Hotel in Havana. Experts from different countries will debate the contribution of this fuel to the development of a Cuban sustainable electro-energetic system. The production of hydrogen in the country is low because it is mainly used as refrigerant in thermoelectric plants. It is very valuable to be able to broaden and update the knowledge about new technologies, according to Antonio Valdés of the organizing committee. Cuba will host for the first time in Latin America a meeting of this type, including experts from 25 countries mainly from developing nations. (Prensa Latina , 9/5/05)

May 31: Spanish-Argentine oil and energy company Repsol YPF said that it will spend more than 21.1 billion euros ($26.1 billion) as part of a five-year global investment plan, with particular emphasis on exploration and production. The company said some 11.4 billion euros ($14.1 billion) will go specifically to exploration and production under its 2005-2009 strategic plan. Chairman Antoni Brufau said exploration and development projects will spearhead the company's growth in the next five years beyond its traditional markets of Argentina, Brazil and Bolivia. Brufau also said Repsol will continue exploring for oil in Cuba. (AP, 31/5/05)

June 2: Cuban-Canadian joint venture ENERGAS will increase electric power generation with natural gas this year, starting with important investments in the west of Cuba, it was announced. Specialists estimate that ENERGAS will exceed 300 MW/h by the end of November 2005, and has the fringe benefit of preventing 100 tons of sulphur being released into the atmosphere daily. ENERGAS is a joint venture comprised of Cuban Unión Eléctrica and Cuba Petróleo, and Canadian Sheritt, and has national recognition by the Cuban Science, Technology and Environment Ministry. It commenced operations at the end of 1998, and was the first initiative to produce cheaper electric power, and foster the aspiration to generate all electric power in the country from national crude oil, now at 90 percent. (Prensa Latina, 2/6/05)

June 2: The Canadian conglomerate Sherritt International reported $16.9 million in revenues for its oil and natural gas operations in Cuba during the first quarter of 2005. The report, posted on the website of the Cuban Ministry of the Basic Industry, states that this figure represents a 21.3% increase in company revenues. Sherritt is planning to step up production by early 2006, when drill sites currently being assessed in Santa Cruz, north of Havana, become fully operational. (EFECOM, 2/6/05)

June 3: Spanish oil-prospecting company Repsol YPF resumed subsurface sounding in Cuban waters, following a failed attempt last year. With a new joint-venture deal that entitles it to 40% of all revenues and puts it at the helm of the drilling rig, the company is planning to pick up where it left off. Other shareholders in the joint-venture will be Chinese state-owned CNOOC, with a 30% stake, and Norwegian Norsk Hydro, with the remaining 30%. (Notimex, 3/6/05)

August 28: The Caribbean Oil and Natural Gas Corporation (ONGC) said it has begun negotiations with the Cuban government for oil exploration in that country. ONGC Videsh Ltd, the overseas arm of ONGC is in talks with the Cuban government for oil exploration in that country," ONGC chairman Subir Raha told reporters. (Indian Express, 29/8/05)

August 29: Cuba purchased 21 generators from a factory in Denmark's northern Jutland, Danish regional newspapers reported. To meet growing energy needs, Cuba acquired 21 generators worth approximately $26.7 million from MAN B&W Diesel in Frederikshavn. The unusually large order represents more than 20 percent of a year's production of motors at the factory. The generators, which will be used in six new power stations in Cuba, will all be delivered in 2006. The first shipment will be delivered in January. The two sides negotiated the order over the past six months; final confirmation of the order was signed by Fidel Castro. (Danmarks Radio, Energy Watch, 29,31/8/05)

September 6: The overseas arm of India's state-owned Oil and Natural Gas Corp. has successfully bid on two blocks in Cuba's potentially rich Gulf of Mexico waters, a company executive said. "We are very interested and simply waiting for the final signing before beginning work," the senior executive from ONGC Videsh Ltd. said, asking that his name not be used. He was in Cuba as part of a delegation led by India's junior foreign minister, Rao Inderjit Singh. High oil prices and the international scramble to buy up potential resources has increased interest in Cuba's largely unexplored Gulf of Mexico waters, a Cuban industry source said. He said contracts for the blocks would be signed with India in September and other blocks would go to another Asian country's state-run oil company soon. (Reuters, 6/9/05)

September 20: Indian ONGC Videsh Ltd, the overseas arm of state-owned Oil and Natural Gas Corp, has acquired a 30 per cent stake in seven oil and gas blocks in Cuba, which hold more than 4 billion barrels of oil reserves. Spain's Repsol-YPF is the operator of some of the blocks and the remaining is with Norway's Norsk Hydro. "OVL has entered into an agreement with Repsol-YPF of Spain to acquire 30 per cent participating interest in deepwater exploration blocks in Cuba," a company press release said in New Delhi. (India Business, 20/9/05)

November 24: PetroChina Great Wall Drilling Co., Ltd. and Petroleum Company of Cuba held a ceremony for signing two drilling service contracts on November 3, 2005. It is the second-time cooperation between Great Wall Drilling Co., Ltd. and Petroleum Company of Cuba after the signing of a one-year petroleum service agreement on one 1500HP drilling rig and one 2000HP rig on April 8 this year. The contract signed this time includes three 2000HP drilling rigs. The contract has a period of one year and a value of over US$24 million. The project will be launched in January 2006. (China Chemical Reporter, 24/11/05)

December 22: Cuba's combined oil and natural gas production fell by 3.7% in 2005, following a similar decline in 2004, the country's Economy and Planning Minister said. Minister José Luis Rodríguez said oil production fell and gas output increased over last year's reported 22.8 million barrels of oil (62,300 b/d) and 24.9 billion cubic feet of gas, without providing further details. "While gas output increased, crude declined (…) due to problems such as drilling delays and hurricanes," Rodríguez said in a year-end speech to parliament, adding that drilling would increase in 2006 in hopes of upping production. Cuba imports at least 92,000 b/d of oil and derivatives in exchange for medical and other services from Venezuela. Canadian companies Sherritt International and Pebercan, in cooperation with Cupet, account for around 60% of domestic output. Spanish oil company Repsol YPF has signed a contract to look for lighter oil in the deep waters off Cuba's coast in partnership with ONGC of India and Norsk Hydro. ONGC also has two separate deepwater blocks and Sherritt four. Sinopec of China signed an agreement earlier this year to jointly produce heavy oil with Cupet in westernmost Pinar del Río province, with drilling expected to begin in 2006. (The Oil Daily, 27/12/05)

Electricity Crisis

January 3: According to a Cuban official, power supply indicators in Cuba will behave "more favorably" in 2005. "It will be hard work but, by the end of the year, we should be ready to restore power generation back to normal levels," said Basic Industry Vice-minister Pedro Abigantús. The official, who is also Director for Power Generation in the National Power Company, added that equipment breakdowns due to lack of maintenance have caused an electric power deficit problem that remains unsolved. (EFE, 4/1/05)

April 21: Dealing with rising oil prices, Fidel Castro has made a call not to waste electricity. The Cuban leader recalled that 20 percent of the electricity generated in the country is lost in transmission and distribution. Hundreds of millions of dollars are wasted on energy because of problems in the systems used to take the electricity to the final consumer. The country needs to take short-term measures to cope with this problem. Cuba has already purchased modern equipment for the manufacturing of wire and the necessary raw material to produce insulation. "We will carry out an intense work on this regard and a total revision of existing networks," Fidel Castro said. Castro announced the purchase of a huge number of energy saving light bulbs and fluorescent lamps to substitute incandescent light bulbs units. (Prensa Latina, 22/4/05)

May 20: The problems with the electrical service that have been affecting Cuba in recent days are due to damages in thermoelectric units in the country, according to an Electric Union note. "Serious damage has been affecting the electrical service, with stoppages of generating plants when important maintenance works were being carried out," according to the brief report that did not refer to the power stations damaged. The text asserts the situation will improve in the next days. (Prensa Latina, 20/5/05)

June 2: The blackouts that have affected Havana and other parts of Cuba were caused by breakdowns in power plants and damage to transmission lines, the state electric utility said. For several days, blackouts lasting up to six hours have plagued Havana and some areas in Matanzas and other provinces during both daylight hours and at night. The damage was caused by the severe weather that has affected different parts of the island, the utility said. The current blackouts are similar to those experienced at the end of last year, when there were outages lasting an average of 10 hours a day after a major breakdown at the Antonio Guiteras plant. (EFE, 2/6/05)

June 7: Cuba is experiencing a shortage of electricity, with blackouts this summer expected to average six hours daily, despite Fidel Castro's pledge to improve the nation's power supply. Recent severe weather caused breakdowns in power plants and damage to transmission lines that affected Havana and other parts of Cuba for several days, state-owned Electric Union of Cuba, or UE, said this month. UE also warned that blackouts could last on average six hours daily. "I do not truly believe that we are going to recover -- even with the capital maintenance that we are carrying out," said Yadira Garcia, Cuban minister of basic industry, late last month. "These plants date back to the 1980s and 1970s. We are still having problems financing the maintenance". "The technology for these plants, some of which are Soviet and Czech, is really no longer manufactured by the factories that produced certain parts," the minister said. The blackouts are similar to those experienced at the end of 2004, when outages lasted an average of 10 hours daily. Cuban Basic Industry Minister Marcos Portal was dismissed after those outages. (UPI, 7/6/05)

June 21: Persistent electricity shortages, which last year cost a government minister his job and forced enterprises to curtail working hours or close altogether, augur an even-hotter-than-usual summer for this Caribbean island nation. Power outages increased in May due to breakdowns in supply lines and several power plants, though not to the level of last year, when blackouts lasted an average of 10 hours a day. Though the official press regularly publishes lists of scheduled outages - some as long as seven hours - in different urban areas, reality fails to conform to the notices, and blackouts often take the population by surprise. The blackouts not only strike private homes, but also businesses, shops and some health centers, which are in the dark for hours. The Cuban Electric Union says service should improve in the latter half of the year, as plants are repaired and 17,000 kilometers (10,500 miles) of cable and 43,000 lampposts are replaced or restored. Even if the power supply were stabilized, it could not meet the island's growing demand, especially in the summer, when electricity consumption goes up 15-20 percent, experts say. (EFE, 21/6/05)

June 26: Repairs are taking longer than expected at Cuba's Felton theremoelectric plant - the country's largest - and the resulting widespread blackouts are inconveniencing residents in Havana and at other locations on the Communist-ruled island. The oil-powered plant, located in the eastern province of Holguin, is undergoing major repairs to one of its power generation units with the aim of achieving greater efficiency in the consumption of petroleum, the official AIN news agency reported. Initially, authorities had planned for the repairs to the steam generation mechanism to take about 60 days, but once the operation was under way other problems were found in the electric generator, forcing more complicated repairs to be undertaken and the time required for the task to be extended. Engineer Eric Kinzan, one of the Felton chiefs, said that the repairs will finally be done about mid-July, and the plant will be operating at full capacity and can then be reintegrated into the National Electricity Generation System. For several weeks, the blackouts have been gradually getting longer and now amount to five or six hours per day - or night - in the capital and the central province of Matanzas. (EFE, 26/6/05)

July 5: After two months of almost daily blackouts, Cuban authorities announced that the trouble would drag on for weeks -- at least until the end of July -- in the middle of Cuba's sweltering summer. "There is still a great deal of risk; there are a lot of limitations and there are still warning signs we can identify at all (power-generating) plants," Basic Industry Minister Yadira García said on state television. García, a member of the Cuban Communist Party's politburo, last October replaced then minister Marcos Portal amid a prolonged energy crisis that Fidel Castro said revealed that the national power system was "weak." (AFP, 5/7/05)

July 11: Fidel Castro announced that all Cuban cities will soon receive power generators to help address energy challenges facing the island. The power generators are necessary in peak electric hours, said Castro, speaking on a TV news-commentary program spotlighting damage to the nation's energy producing capacity inflicted by the recent passage of hurricane Dennis. Castro noted that the power equipment is of high quality, automated and must be used only in "the most urgent circumstances" and in an "organized way". (AIN, 11/7/05)

July 18: The Cuban power system, brought down by powerful hurricane Dennis, was reconnected after 15 days of intense work, local TV informed. The power plant increased its generation capacity to 300 megawatts. (Prensa Latina, 18/7/05)

July 26: Cuba stopped importing incandescent light bulbs, according to a Foreign Trade Ministry (MINCEX) regulation published in the Official Gazette. The MINCEX resolution 190 of 2005 says that "in order to contribute to Cuba's energy/saving policy, it is considered sensible to cancel imports" of these products. They are "incandescent lamps and tubes, except ultra-violet or infrared rays, others of lower electricity consumption or equal to 200 watts that use an over-100-volt tension." On April 21, Fidel Castro publicly announced the official decision to eliminate incandescent light bulbs in Cuba to replace them with others of lower power consumption. (Prensa Latina, 26/7/05)

July 26: Fidel Castro said his government was revolutionizing Cuba's aging electrical system, asking a nation weary of recent breakdowns to be patient while his government works to fix the problems. ''We will overcome. Have a little bit of faith,'' the Cuban leader said in an address of nearly four hours marking the 52nd anniversary of his revolution. (AP, AIN, 27/7/05)

August 4: Hard-pressed Cubans already suffering through frequent and long interruptions in the flow of electricity saw the problem worsen when Antonio Guiteras, one of the nation's largest plants, broke down. In a communique, state-owned Union Electrica explained that the pipeline feeding fuel into the plant's boiler was damaged. Problems in the power network are prompting blackouts of up to 10 hours a day in Havana and other cities around the country. (EFE, 4/8/05)

August 8: The number one unit of the Cuban thermoelectric plant "Lidio Ramón Pérez" in the northeastern town of Felton, Holguín, is now stabilized and assimilated into the national grid. Block 1 was incorporated to the national grid, but had to be withdrawn for adjustments to be made, and was incorporated again. The reincorporation of this power plant represents an improvement in the generation capacity of electric power for the country, because of its capacity to supply 500 Mw with its two blocks. (Prensa Latina, 8/8/05)

September 1: Fidel Castro highlighted the importance of saving fuel, in moments in which oil prices are still increasing in the international market. Castro spoke during the 5th ordinary session period of the 6th legislature of the National Assembly of People's Power (Parliament). He pointed out in his intervention that no one in the world is sure oil prices will be reduced in any way. "Few countries will be able to pay if oil reaches 150 dollars a barrel," he added. "Maybe US and Europe may buy it, but the Third World countries would only have the chance to devour one to each other." He said that Cuba is not one of the countries with a worse situation, and compared the island with other nations with lower economic resources, such as Haiti. (Prensa Latina, 1/9/05)

September 9: The OPEC Fund for International Development signed a US$10 million loan agreement with Cuba to co-finance the modernization and expansion of the electricity network in Havana. The aim of the project is to improve the quality and efficiency of service delivery, with a view to boosting the country's socio-economic development. Under the project, Havana's high voltage transmission system and medium and low-voltage distribution network will be fully rehabilitated through the repair and construction of substations and power lines. Other works will include the installation of lightning protector cables and modernization of the underground networks in Havana's historic district. Meters, power lines and other equipment connecting the distribution network to approximately 435,000 households, as well as major industrial and commercial premises, will be completely upgraded. Public safety will be enhanced by installing new street-lights and repairing existing ones. (OPEC Fund for International Development Press Release, 11/9/05)

September 11: Iran will export electrical equipment worth five million dollars to Cuba. The agreement to export the equipment is in its final stages. The Export Development Bank of Iran (EDBI) is to finance the contract. (MNA, 11/9/05)

September 21: Preliminary reports said that Hurricane Rita severely affected the electricity service in the western Cuban provinces of Matanzas, Havana, and the City of Havana. Over 157 electric lines, out of 515, were damaged, as well as water and gas services. International flights were suspended, and schools were closed. Over 230,000 persons were evacuated. No deaths were reported. (AIN, 21/8/05)

September 28: Korean Hyundai Heavy Industries Co., the world's largest shipbuilder, said it has won a US$330 million order for electric power generators from Cuba. "Hyundai Heavy is to deliver 244 packaged power generators with a combined capacity of 510 megawatts to Cuban authorities in charge of electricity by the end of 2007," a Hyundai official said. (Yonhap News, 28/9/05)

September 28: Cuba continues to be plagued by an energy crisis and blackouts, despite major investments to modernize a service that now extends to nearly 96 percent of the country's 11.2 million inhabitants. An increase in domestic production and an agreement with Venezuela to import oil under highly favorable terms have brought an end to the severe shortages of the mid-1990s, which led to an abrupt plunge in Cuba's power-generation capacity. Nevertheless, the National Electric Power System (SEN) is still not able to maintain a stable supply of electricity, due to repeated breakdowns in its main thermoelectric power stations. (IPS, 28/9/05)

October 17: The maintenance activities at one of the main electricity generating stations in Cuba that have led to long power blackouts in some parts of the country will continue for some more days, the government said. After a summer marked by frequent and lengthy blackouts, Cubans got a respite in September, but the blackouts have been reinstituted for several hours each day in various cities, including Havana. The Cuban Electrical Union attributed the new outages to supply limitations at the Antonio Guiteras electricity plant, one of the country's most important power stations, which is undergoing maintenance. (EFE, 17/10/05)

November 3: Repeated equipment failure in two key power plants in Cuba is the cause of increased power outages affecting the population, announced the Electrical Union, the national power company. With one of the thermoelectric power plants undergoing maintenance and generators unexpectedly going off-line at the Felton plant, "power supply to the population is being affected significantly," representatives from the Union told the press. (EFE, 3/11/05)

November 23: A decree signed by Fidel Castro increased the cost of electricity for small consumers from 20 to 30 cents of a Cuban peso ($0.01) per kilowatt-hour (kwh). Cubans who consume more than 300 kwh a month will see their rate rise from 30 centavos (cents) to 1.30 pesos ($0.06) next month. "The lack of concern about electrical consumption is evident in our country due to the very low rates," the decree published in the ruling Communist Party newspaper Granma said. Power outages are frequent in Cuba whose thermoelectric generators built decades ago are obsolete and do not produce enough electricity to meet demand at peak consumption. Castro warned that rates would have to go up in a speech in which he attacked private businesses, such as family restaurants, for benefiting from subsidized electricity and using up too much power. Foreign companies, which pay a higher rate and will not be affected by the new increase, praised the move as realistic. "It's a step in the right direction, to get people who can afford it to pay for electricity, as opposed to everybody not having any," said a foreign company executive. "They cannot afford to subsidize everybody, and the fact is that everybody was getting very little electricity," she said. (CNN, 23/11/05)

November 30: South Korean Hyundai Heavy Industries Co., the world's largest shipbuilder, said it has clinched a US$ 130 million order from Cuba to install diesel power generators on the island. Hyundai said it plans to complete installation of diesel power generators across the nation by the end of 2007 to meet the dispersed generation plan of the Cuban government. (Yonhap, 30/11/05)

December 2: Fidel Castro recognized the critical situation of the country's power generation network and promised that the service would improve soon with the operation of generators and the application of conservation measures. The government plans to make up for the shortfalls of power plants with the installation of hundreds of electrical generators in the whole country. In reference to the rationing card, Castro said that there is still no date for its elimination. (EFE, 2/12/05)

December 28: Cuba will complete, by mid-2006, the installation of 80 percent of new generation capacities, a modern system backed up by emergency plants in vital locations, all of them with much more fuel-saving equipment. This achievement will quadruple power generation making all provinces independent by connecting thousands of synchronized generators. This network is designed to eliminate interruptions due to generation deficit. The old power plants will be replaced by modern combined-cycle plants, which will use gas derived from oil production. Fidel Castro said that the whole project will save the country nearly $1 billion in convertible currency, compared to current costs of production. (Prensa Latina, 28/12/05)