Brazil to offer Cuba $1 bln credit on Lula trip

Brazil to offer Cuba $1 bln credit on Lula trip
Mon Jan 14, 2008 11:53am EST

HAVANA, Jan 14 (Reuters) - Brazilian President Luiz Inacio Lula da Silva
will offer Cuba $1 billion in credit for food, road building, nickel
mining and other development projects when he visits Havana later on
Monday, Brazilian diplomats said.

Brazil also will offer to cooperate in oil exploration in the Gulf of
Mexico and in building a lubricants plant, though risk and investment
contracts are still being negotiated by Brazilian state oil company
Petrobras (PBR.N: Quote, Profile, Research) (PETR4.SA: Quote, Profile,
Research), they said.

"Brazil wants to be engaged in Cuba and has economic, trade and
technological resources to offer at a time when Cuba seeks to
modernize," said a Brazilian foreign ministry official.

"They need new friends and they want us here," he said.

It was uncertain whether Lula would meet with ailing Cuban leader Fidel
Castro during his 24-hour visit to Cuba following Monday's presidential
inauguration in Guatemala.

"It won't be confirmed until it happens," a Brazilian diplomat said. "It
will happen if Fidel feels up to it."

Castro has not appeared in public since he underwent stomach surgery in
July 2006 that forced him to hand over power to his brother Raul.

Cuba's ruling Communist Party newspaper Granma said Lula, who is being
accompanied by four cabinet ministers and the head of Petrobras, Jose
Sergio Gabrielli, will meet with acting president Raul Castro.

Brazil will double credit lines for Cuban food purchases to $200 million
and offer credit lines worth $600 million to build roads in Cuba, $70
million for a nickel plant and more for specific projects in
biotechnology and other sectors, the Brazilian official said.

Credit for the export of goods and services through Brazilian companies
is available as long as Cuba can provide collateral, he said. "We hope
to see the commitment of significant private and state investment in
Cuba," he said.

The two countries will sign an umbrella agreement that will include
Brazilian commitment to look at exploration in Cuba's deep-sea Gulf of
Mexico waters where six foreign oil companies are looking for oil
reserves, the official said.

Under that agreement, Petrobras will train Cuban personnel and offer aid
in refining and research.

Brazil, one of the world's largest producers of ethanol from sugar cane,
has for years sought to sell its technology to Cuba, but this will not
be on the agenda during Lula's visit.

Last year, Castro criticized the use of food crops to produce biofuels
saying it would increase hunger in the world.

Castro has only been seen in videos and photographs since he fell sick
in July 2006, but he has received foreign leaders, mostly Cuba's main
ally Venezuelan President Hugo Chavez, who visited him in mid-December.
(Reporting by Anthony Boadle; editing by Kristin Roberts)

http://www.reuters.com/article/oilRpt/idUSN1439293020080114?sp=true