The Cuban government is to allow China to station 12 oil rigs in its waters in the Gulf of Mexico.
Fidel Castro's government has stepped up work on 36 new oil wells in partnership with Chinese and Canadian companies, officials said on Thursday.
The Cuban government is generally silent about oil matters, but this week Communist Party newspaper Granma also reported that Cuba had drilled its deepest oil well yet near Varadero, east of Havana.
Diplomatic sources said Indian, Norwegian and Spanish companies would begin searching for crude oil in the gulf.
The news has angered some US politicians, who say the US economic embargo of Cuba locks them out of the potentially lucrative operation at a time when oil prices are soaring.
Two Republican politicians have submitted a bill that would ease the embargo by allowing US companies to engage in transactions and travel to Cuba without the special license required by the US government.
Republican US Senator Larry Craig of Idaho said: "The American public would be shocked and stunned that as this country faces a serious energy crisis at home, countries like China, India, Canada, Spain and Norway are exploring and drilling 50 miles off the US coast."
Cuba has invited US companies to take part in the drilling operations, but the 44-year old embargo prevents it.
"China, as our National Security Strategy points out, is trying to lock up resources around the world, and they are locking up resources in our own back yard where we can't even compete," Craig said.
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