updated 7/30/2009 6:49:15 AM ET 2009-07-30T10:49:15

Russia and Cuba signed agreements to search for oil in the Gulf of Mexico, and Moscow extended the island $150 million in credit for construction materials and farm machinery, state media said Wednesday.

The credit will give Cuba more time to pay for Russian equipment shipped to areas most affected by three hurricanes that caused more than $10 billion in damage last summer.

Russian Deputy Prime Minister Igor Sechin signed the agreement, according to the Cuban government's AIN news agency. Russian media reported that Sechin met with Cuban President Raul Castro, but Cuba's press did not mention a meeting.

The four accords with oil monopoly Cubapetroleo will let Russian concern Zarubezhneft explore for crude in deep waters off Cuba's coast, though details were sparse.

Zarubezhneft and other Russian companies signed a memorandum of understanding in Moscow in January pledging to help Cubapetroleo with prospecting, production, refining and other oil activities.

Cuba's domestic production is exclusively heavy oil with a high sulfur content. Its offshore Gulf waters could contain large quantities of lighter, sweet crude — although a test well in 2004 turned up only modest discoveries.

The government has said it will team with foreign partners to begin exploration soon in deeper waters, although it has not announced a date.

Cuba began offering 59 blocks in the Gulf to private interests for exploration in 1999.

The Soviet Union provided billions of dollars in trade and annual subsidies to communist ally Cuba before its 1991 collapse, and the Kremlin has moved to rebuild old ties recently.

More on Cuba   |  Russia

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