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20bn barrel oil discovery puts Cuba in the big league

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

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, Latin America correspondent
The Guardian,
Saturday October 18 2008

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."

[Submitted by Hemp4Fuel]

Saturday 18 October 2008 - 06:10:58 by Hemp4Fuel
Posted in Petroleum / Oil | Comments: 2 |        

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