[Marxism] "20bn barrel oil discovery puts Cuba in the big league"

[David Thorstad]

http://www.guardian.co.uk/world/2008/oct/18/cuban-oil


  The Guardian
  October 18, 2008
  20bn barrel oil discovery puts Cuba in the big league


    Self-reliance beckons for communist state
    Estimate means reserves are on a par with US

Rory Carroll

Friends and foes have called Cuba many things - a progressive beacon, a 
quixotic underdog, an oppressive tyranny - but no one has called it 
lucky, until now .

Mother nature, it emerged this week, appears to have blessed the island 
with enough oil reserves to vault it into the ranks of energy powers. 
The government announced there may be more than 20bn barrels of 
recoverable oil in offshore fields in Cuba's share of the Gulf of 
Mexico, more than twice the previous estimate.

If confirmed, it puts Cuba's reserves on par with those of the US and 
into the world's top 20. Drilling is expected to start next year by 
Cuba's state oil company Cubapetroleo, or Cupet.

"It would change their whole equation. The government would have more 
money and no longer be dependent on foreign oil," said Kirby Jones, 
founder of the Washington-based US-Cuba Trade Association. "It could 
join the club of oil exporting nations."

"We have more data. I'm almost certain that if they ask for all the data 
we have, (their estimate) is going to grow considerably," said Cupet's 
exploration manager, Rafael Tenreyro Perez.

Havana based its dramatically higher estimate mainly on comparisons with 
oil output from similar geological structures off the coasts of Mexico 
and the US. Cuba's undersea geology was "very similar" to Mexico's giant 
Cantarell oil field in the Bay of Campeche, said Tenreyro.

A consortium of companies led by Spain's Repsol had tested wells and 
were expected to begin drilling the first production well in mid-2009, 
and possibly several more later in the year, he said.

Cuba currently produces about 60,000 barrels of oil daily, covering 
almost half of its needs, and imports the rest from Venezuela in return 
for Cuban doctors and sports instructors. Even that barter system puts a 
strain on an impoverished economy in which Cubans earn an average 
monthly salary of $20.

Subsidised grocery staples, health care and education help make ends 
meet but an old joke - that the three biggest failings of the revolution 
are breakfast, lunch and dinner - still does the rounds. Last month 
hardships were compounded by tropical storms that shredded crops and 
devastated coastal towns.

"This news about the oil reserves could not have come at a better time 
for the regime," said Jonathan Benjamin-Alvarado, a Cuba energy 
specialist at the University of Nebraska.

However there is little prospect of Cuba becoming a communist version of 
Kuwait. Its oil is more than a mile deep under the ocean and difficult 
and expensive to extract. The four-decade-old US economic embargo 
prevents several of Cuba's potential oil partners - notably Brazil, 
Norway and Spain - from using valuable first-generation technology.

"You're looking at three to five years minimum before any meaningful 
returns," said Benjamin-Alvarado.

Even so, Cuba is a master at stretching resources. President Raul 
Castro, who took over from brother Fidel, has promised to deliver 
improvements to daily life to shore up the legitimacy of the revolution 
as it approaches its 50th anniversary.

Cuba's unexpected arrival into the big oil league could increase 
pressure on the next administration to loosen the embargo to let US oil 
companies participate in the bonanza and reduce US dependency on the 
middle east, said Jones. "Up until now the embargo did not really impact 
on us in a substantive, strategic way. Oil is different. It's something 
we need and want."

 

 

 

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