Brazil's largest news agency, Estado has reported Cuba's state-owned oil company Cupet, is in serious talks with Petrobras for an oil exploration deal that could see E&P activity in Cuba's Gulf waters by next year. The agency quoted Cupet president Fidel Rivero as saying he expects to announce an agreement with Petrobras in the next couple of months. The talks under way now are on exploration conditions and rates of return. Cuban officials have said they want a deal that will also transfer the deepwater technology needed to explore and develop the Deep Cuban Basin in the Gulf of Mexico. The upside for Cuba is a deal that will help them speed up development of oil and gas reserves off their coast. Now, for the other side of the story. Though the agreement may bring a lot of smiles in Cuba and Brazil, don't expect any congratulations coming from Florida or the members of its congressional delegation. They have, and apparently are still, incredibly opposed to any drilling by Cuba off Florida's coast. The Florida delegation has said they fear any accidents in Cuban waters could damage or destroy their state's lucrative tourist industry. American energy companies have quietly been pressing for the end of the Cold War-era embargo so they too can take part in Cuba's drilling plan. Stay tuned. This story is far from being over. Expect to hear more chatter from Florida's legislators as Cuba and its partners prepare for a massive drilling operation less than 40 miles from Florida's coast. –John A. Sullivan, News Editor, Oil and Gas Investor,,