- The Guardian,
- Saturday October 18 2008
- Article history
A worker walks at an oil rig in Havana, Cuba. Photograph:
Enrique De La Osa/Reuters
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 Benjam in-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."