The announced visit to Cuba this month of Brazilian President Luiz Inacio Lula da Silva should be a landmark in the expansion of bilateral links of cooperation.

Those links are going well, but according to analysts, when Lula and Cuban President Fidel Castro have an opportunity to dialogue at greater length they must deal with the most important issues. Those experts have little doubt that oil will be at the top of the agenda, particularly because both parties have publicly expressed their interest in collaborating on the subject.

Cuba made an exception with Brazil, when it broke the absolute silence established in the oil industry regarding the development of its special economic zone in the Gulf of Mexico. The Cuban government considers that the strategy of discretion is justified by the aggressiveness of the American administration, especially when it comes to controlling that important natural resource wherever it may exist.

The area, divided in 29 blocs, was auctioned for the at-risk exploration by foreign companies, after an agreement was made with the U.S. and Mexican governments to divide the zone of exploitation in the Gulf of Mexico.

Brazil's state-owned Petroleo Brasileiro S.A. (Petrobras) is a world leader in offshore prospecting. Under Lula, the outlook for collaboration has improved significantly. Brazil's ambassador in Havana, Tilden Santiago, said in late July that his president had agreed to visit Cuba in September.

That invitation was delivered officially by Vice President Carlos Lage and Foreign Minister Felipe Perez Roque during an interview both had with the president in Brasilia.

The idea is not just for Lula to spend a few pleasant days on the island but also to talk about trade and collaboration, particularly on the subject of oil. The main objective of both parties is the crude oil that lies in fields offshore, which, according to geologists, amounts to between 2 billion and 4 billion tons.

There is no doubt that both parties are delving into the details of how to carry out the affair, because Ambassador Santiago said that all that's needed is to complete the technical evaluation conducted by Petrobras.

"Petrobras has world-renowned technical experience to find oil in deep waters, which qualifies it to look for oil in the Gulf of Mexico," said Petrobras chairman Jose Eduardo Dutra. Along with other private corporations, the Brazilian company had a string of hits when prospecting in the U.S. bloc in the Gulf of Mexico.

In Brasilia, Lage conceded that one of the most important topics in the agenda of his talks with Lula had been precisely the crude oil in the Gulf of Mexico.

Experts are certain that a huge potential exists, not only in the quantity but also in the quality of the oil, given the proximity to the geological strata of Texas and Mexico.

Petrobras is studying the proposal, but Ambassador Santiago said that everything will depend on its feasibility, from the point of view of risks, convenience and profits.

Petrobras has previously been interested in exploring Cuba's offshore regions, particularly near Cayo Coco, where it invested about $15 million one decade ago. Sherritt of Canada and Repsol-YPF of Spain are exploring four and six blocs of the Cuban special economic zone, and it is expected that Petrobras will agree to explore two blocs.

This is not just a political rapprochement, because Petrobras is attracted by the possibility of satisfying a need to expand its international business. As Dutras put it, "our main objectives are to take advantage of what we do best: extract oil from deep waters."

The chairman of Petrobras added: "We are interested in accepting the invitation of the Cuban government to explore oil in the Cuban sector of the Gulf."

"Some delegations have traveled to Cuba to evaluate the conditions and political, technical and financial terms, "said Petrobras officials.

Cuba's special economic zone in the Gulf of Mexico is being developed slowly through contracts for at-risk exploration, which means the bidder must absorb the expenses and losses if crude is not found.

However, in the case of Cuba, the traditional risk of this type of operation has both a pleasant face and a face that accentuates the problem.

The unpleasant face is the blockade by the United States, a political aspect that determines the hostility that has gone on for 10 administrations, including the present one, presided by George W. Bush. This curtails the interest of potential investors, despite the attractive proviso that foreign associates will receive one half of the profits.

Six of the blocs in the Cuban special economic zone are handled by Sherritt of Canada and Repsol-YPF, the company formed when Spain's Repsol absorbed Argentina's YPF.

According to experts, exploration in each bloc costs $50 million, three times the cost of similar operations on land or in shallow waters offshore.

OGJ, a local news agency that specializes in the oil industry, reported that Repsol-YPF is looking for partners to cover the cost of the Cuban blocs, where the depth could reach 3,000 meters.

John Kavulich, president of the U.S.-Cuba Economic and Trade Council, believes the blockade still does not substantially harm the American oil companies. "U.S. companies are not at a substantial disadvantage right now, because they don't have the opportunity to export oil to Cuba or explore its crude," he said.

Kavulich predicted things will go well "if appreciable quantities, or crude oil of an acceptable quality, are found in the areas of the Gulf of Mexico controlled by Cuba. Then, there will surely be significant pressure from U.S. companies to gain authorization from the U.S. government to compete for exploration rights," he explained.

The blockade against Cuba hampers some very promising operations that could help strengthen the United States' energy security, Kavulich stressed. Besides, the oil consortiums could obtain revenue amounting to some $2 billion or $3 billion per year in new sources of crude and natural gas, according to a study on energy supplies in Florida.

That study was done in late 2001 at the direction of the Cuban Policy Foundation, an organization that is surprisingly led by entrepreneurs of Cuban origin.

Authorities on the island invested $1 billion in 1991-92 to modernize the oil sector and achieved 600 percent growth in production.

At that time, the initial investments included foreign partners, but recently the state-owned oil company Cubapetroleo (Cupet) has been able to run its own operations.

The Cuban special economic zone is open to foreign investors, preferably Brazilian, and could be the best business on the island. Cuba and Brazil collaborate in other fields with joint ventures, but this is unsatisfactory to both parties, who look understandably to the opportunities to expand their cooperation.

Among the joint ventures, we should note Biocen Brasil, which deals in medical and pharmaceutical products and equipment, and Brascuba, which produces cigarettes for domestic and foreign consumption. Last year, Brascuba's billings reached $19 million. Also worth mentioning is Transbuss, a company that assembles cargo and passenger vehicles, in six specialties, in collaboration with Unecamoto, its Cuban counterpart.

Brazil and Cuba have signed an accord for the promotion and mutual protection of investments, and the South American giant is considering several fields for its capital. Among them are, according to Cuban sources, the production of electricity, cane sugar derivatives, electromechanical and metal-mechanical industries, housing construction, technical services, food production and other fields.

The advantages of investing in Cuba lie particularly in the potential of its qualified human capital, supported by 15 scientific "poles" (areas that include research centers) that function in an integral manner. Those advances can be very attractive to investors and can improve trade with Brazil in subjects such as vaccinations, biotechnological equipment and special medical equipment.

The advantages are mutual, such as relations between the universities in both countries, begun in 1992. The centers of higher learning, both Brazilian and Cuban, exchange professors, provide scholarships for the training of doctors, participate in graduation juries, training, post-graduate education, etc.

Recently, in the state of Rio de Janeiro, a literacy campaign was approved that used a Cuban method of recognized efficiency. In the area of sports, cooperation has lasted for more than a decade, with dozens of Cuban coaches and trainers working in several states (Parana, Curitiba, Londrina, Matto Grosso and Sao Paulo).

Meanwhile, more than a hundred Brazilians have visited Cuba, and several Brazilian youngsters have enrolled in the International Institute for Sports and Physical Education.

When it comes to health, one of the first contacts between Brazil and Cuba was the care given on the island, beginning in September 1987, to 34 children and 16 adults contaminated with cesium-137 in Goiania, Brazil. The patients were treated at the center of Tarara In collaboration with the Leite das Neves Ferreira Foundation and the Catholic University of Goias. The experience gained by Cuban doctors during the treatment of children from Chernobyl was very useful in this instance.

Collaboration between Cuba and Brazil also is carried out in the Mercosur. The group handles 13.5 percent of Cuba's exchanges with Latin America; Cuba's trade with Brazil accounted for 9 percent of Mercosur's trade in 2001.

Exchanges with Brazil, which were favorable to Brazil that year, amounted to $164.5 million in food, car bodies and parts and other products on the part of Brazil. Cuba provided nickel, cement, insecticides, rat poisons and tobacco.

At the meeting of Mercosur presidents, held in Cuzco, Peru Lula announced that he will invite Cuba to the next meeting, set for Brazil in 2004. His decision is based on the willingness of his government to achieve true integration in Latin America, as an instrument to confront successfully the United States' efforts to impose its Free Trade Area of the Americas (FTAA.)

The model proposed by Washington is considered to be annexationist and unfair, due to the economic imbalance between the parties involved.