Oil could thaw U.S.-Cuba relations
By
Patricia Grogg Read Spanish Version
From
Havana Times
HAVANA
TIMES (IPS) — The discovery of a significant offshore oilfield in
Cuban waters in the Gulf of Mexico could persuade the United States
to modify its policy towards the Caribbean island nation, experts
say, while warning that this possibility could also entail risks.
“When
there are important economic interests at play, in terms of market
and resources that are strategic for Washington, the ideological
components that have driven U.S. Cuba policy come tumbling down,”
Cuban academic and researcher Luis Rene Fernandez told IPS.
The
expert explained that he is not saying the four-decade embargo will
be lifted “overnight, but it’s obvious that these interests will
start lobbying to eliminate the restrictions” that prevent U.S.
companies from participating in a possible oil boom in Cuba.
“Because
it is such a major resource, and if the oilfields discovered are, in
fact, truly significant — both in size and in the quality of the
reserves — then that play of forces will be unleashed,” noted
Fernandez, assistant director of the Centre for the Study of the
Hemisphere and the United States (CEHSEU).
Cuba,
which currently produces some 80,000 barrels a day of high-sulfur
heavy oil, that covers half of its domestic needs, is now focusing on
the abundance of oil that is thought to lie under the seabed of its
exclusive economic zone (EEZ) in the Gulf of Mexico.
Rafael
Tenreyro, director of exploration at Cupet, Cuba’s state petroleum
company, said the area has a potential yield of more than 20 billion
barrels of extractable crude, an appealing hypothesis that could be
confirmed once the Spanish oil company Repsol resumes its drilling
operations in mid 2009.
The
Spanish firm was the first to take on the challenge posed by Cuba in
mid-1999 when it opened up a bidding process for 59 exploration
blocks in a 112,000-square-kilometer area in Cuban waters in the Gulf
of Mexico, which is bordered by Mexico and the U.S.
The
consortium, which two years ago formed an association with the
Norwegian oil firm Norsk Hydro and India’s ONGC Videsh to explore
six blocks in Cuba’s EEZ, drilled its first oil well in 2004 with a
result that only partially satisfied initial expectations and was
considered unprofitable.
Besides
Repsol, companies from Norway, India, Malaysia, Vietnam and Venezuela
are involved in projects in the EEZ, while Canadian, Vietnamese,
Chinese, Venezuelan and French companies are working in what is
considered the most promising area, the northeast coast of the
archipelago, both on land and offshore.
The
heavy crude strip stretches over more than 118,000 kilometers between
the Havana and Cardenas Bays, in the western province of Matanzas. It
has been divided into 43 blocks, 15 offshore and the rest on land. Of
that total, 10 have already been awarded to companies, one is under
negotiation, and 32 are still available.
Brazil’s
Petrobras and similar companies from Russia are also presumably
interested in participating.
“Negotiations
with Petrobras have advanced considerably and we hope to have good
news soon,” Tenreyro remarked to foreign correspondents during a
recent tour of several wells in full operation.
The
expert, with 35 years of experience in the oil industry, acknowledges
that the U.S. embargo “entails an additional difficulty” for
Cuba’s oil business partners, but says that, at the same time, for
U.S. companies it means missing out on good “business
opportunities.”
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Others also alert against the potential risk that Cuba would face if
it turns into a significant oil producer, being located so close to
the United States. Fernandez believes that a military attack from the
U.S. is a possibility that “can never be ruled out,” although he
doesn’t see it as likely in this case.
In
his opinion, “the possibility of a U.S. military intervention in
Cuba would increase in the event of an acute economic crisis
accompanied by social unrest and the government’s inability to
control it,” and such a scenario would involve relatively low costs
for Washington.
“An
oil boom, in contrast, would lead to a major improvement in living
conditions in general, the country would be strengthened
economically, politically and socially as a result of the
availability of large oil revenues, which would also provide a
significant degree of ‘invulnerability’ and development
capacity,” Fernandez added.
In
this sense, the country would bolster its “defense capacity and,
naturally, the people’s support for the cause of resistance”
would be boosted, concluded the expert, for whom U.S. strategists
should take into account the impact that a fiercely-fought war so
close to home would have on their national security.
In
the late 1970s, the United Nations Convention on the Law of the Sea
established a 200-nautical-mile jurisdiction for coastal states,
based on which an EEZ is created, where the country enjoys sovereign
rights over natural resources.
The
sea border that divides Cuba from the United States, as well as
Mexico and other neighboring countries, was traced in the early
1980s. The fact that the area is surrounded by mature oil fields
stokes Cuba’s optimism about its potential for crude and gas
production.
