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Cuba set to join the big oil league

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 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 20 billion 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 U.S. 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 U.S.-Cuba Trade Association. “It could join the club of oil exporting nations,” he added.

“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. 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. “This news about the oil reserves could not have come at a better time,” said Jonathan Benjamin-Alvarado, an energy specialist.

However, there is little prospect of Cuba becoming a version of Kuwait. Its oil is more than a mile deep under the ocean and difficult and expensive to extract. The four-decade-old U.S. economic embargo prevents several of Cuba’s potential partners — Brazil, Norway and Spain — from using first-generation technology. — © Guardian Newspapers Limited, 2008

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