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Discovery of Cuban oil triggers debate in U.S.

MIAMI: America's trade embargo with Cuba has been in place since 1961, and though it has yet to loosen Fidel Castro's grip on power, it has cost the U.S. little strategically or economically.

Until now, that is.

From here on out, say a growing chorus of experts, America will pay a price for maintaining its 45-year trade ban with the Communist nation — a strategic and economic price that will have negative repercussions for the United States in the decades to come.

What has changed the equation? Oil. To be more specific, recent, sizable discoveries of it in the North Cuba Basin — deep-water fields that have already drawn the interest of companies from China, India, Norway, Spain, Canada, Venezuela and Brazil.

This, in turn, has reheated debate in the U.S. Congress and the Cuban-American community on an old question: Has the time finally come to shelve the embargo — given America's need for more sources of crude at a time of rising gas prices, soaring global demand and the outbreak of war in the West Asia?

Cuba has been oil hunting, not always successfully, for decades.

With Soviet help, it discovered the Varadero Oil Field in 1971. This reservoir, within 8 km of the northern coast, today yields about 40 per cent of Cuba's total production — roughly 75,000 barrels a day of poor-quality, heavy, sour crude.

High quality oil

In July 2004, however, the Spanish oil company Repsol-YPF, in partnership with Cuba's state oil company, CUPET, identified five fields it classified as ``high-quality'' in the deep water of the Florida Straits, 32 km northeast of Havana.

Seven months later, a report by the U.S. Geological Survey confirmed it: The North Cuba Basin held a substantial quantity of oil — 4.6 billion to 9.3 billion barrels of crude and 9.8 trillion to 21.8 trillion cubic feet (278 billion cubic metres to 617 billion cubic metres) of natural gas.

Cuba wasted no time, dividing the 120,000-sq-km area into 59 exploration blocks, and then welcoming foreign oil conglomerates with offers of production-sharing agreements. Oil companies from China and Canada, already prospecting for oil along Cuba's coast, began talks with Cuban energy officials about investments in deep-water operations.

AP

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