British Borneo admits it quit Cuba amid pressure from the US government

BRITISH BORNEO, the independent oil company, yesterday revealed it pulled out of Cuba amid political pressure from the US State Department. The company, which has Sir Bob Reid, former British Rail boss, as a non- executive director, is being investigated by State Department officials alongside Premier Oil and Canada's Genoil.

They are under review over possible breaches of the Helms Burton embargo legislation, under which travel visas to the US can be revoked. Steve Holliday, international director of British Borneo, said it left Cuba late last year. Asked if politics was a reasons, he said: "It would be naive to say it was not a consideration."

But he said a range of issues were taken into account. British Borneo held a licence for block 21 and drilled a well near the producing Pina field. It also did seismic tests looking for oil on block 11 but would not comment on whether there were commercial opportunities.

Mr Holliday said State Department officials asked his company to supply information about their Cuban activities. He added: "We do not expect to hear any more from them."

Charles Jamieson, chief executive of Premier, confirmed he too had been asked to give details of activities in Cuba. "We have spoken to State department officials on questions of clarification." Premier also shot seismic tests on two blocks of land where it has been granted exploration licences. It planned to start drilling a first well this year.

Mr Jamieson said Premier had taken legal advice before starting work in Cuba. "As far as we know the land we are operating on is now owned by Americans." Premier is the original licence holder of blocks 21 and 18. In the past it spoke of "good prospectivity" for larger oil-bearing structures, but they were located at deep levels, making them harder to drill.

The Helms Burton Act was introduced in March 1996. It was implemented by Congress following the shooting down of a US aircraft off the island. Under Title Four of Helms Burton, US visas can be revoked for any executives, their family or shareholders of any company found to be "trafficking in properties confiscated from US citizens or businesses."

A spokesman for the State Department confirmed talks were going on with British Borneo and Premier and stressed this did not mean the companies were guilty at this moment. A long process of investigation is carried out before a company and its executives are formally informed they have fallen foul of the legislation.

Even then it is possible for an excluded company to negotiate a settlement. But the State Department official added: "We try to be careful about who we question, hence the small number of companies being investigated."

Only one company, Sherritt International of Canada, is currently on the list of embargo-breakers. Two others have either settled with US owners or corrected their violations in other ways.