Connect to share and comment

Oil spill: a boon for Cuba?

The Gulf oil spill could mean more drilling off Cuban coast.

The association's president, Lee Hunt, said his group was not traveling to the island to conduct business with the Cuban government. He said the purpose of the trip was to share information on safety practices and environmental safeguards.

Several of the foreign companies being considered for drilling in Cuba are also members of a Houston-based trade group, Hunt noted.

Still, Cuba energy experts say that the Deepwater Horizon disaster has forced the U.S. government to allow American oil companies to begin to engage with Cuba, a step that could chip away at the trade embargo. An energy bill in the U.S. Senate sponsored by Sen. Lisa Murkowski (R-Alaska) and Sen. Mary Landrieu (D-La.) includes a provision that would essentially exempt U.S. oil companies from the Cuba trade embargo, arguing it would be in the interest of national security.

And if the massive Gulf oil spill makes drilling in U.S. waters more difficult, it makes Cuba all more appealing, according to Jorge Pinon, a Cuba energy expert at Florida International University and the former president of Amoco Oil Latin America.

“If the U.S. government places onerous restrictions — taxes, legal, bureaucratic red tape, etc. — on oil companies operating in the U.S. Gulf of Mexico, it will force them to explore and develop hydrocarbon resources on the Cuba side of the Gulf of Mexico,” said Pinon, who advocates U.S. involvement in Cuba’s oil industry.

While it seems hard to fathom now, he said, “there is a chance that in three to five years the fiscal and commercial terms and conditions for drilling for oil and gas in Cuba will be more attractive than in the U.S.”

Pinon: “If major resources are found, Cuba could eventually become an important and strategic supplier of oil to the U.S.”

Multiple legal and political barriers would stand in the way of such a partnership with the Castro government. But the U.S.’s pressing energy needs and the threat of another environmental disaster could force the long-estranged neighbors into a new relationship, said Jonathan Benjamin-Alvarado, a political scientist and Cuba energy scholar at the University of Nebraska at Omaha.

“Trust and confidence building measures will have to be monitored and evaluated at a pace amenable to both governments,” he said.

Cuba currently produces about 60,000 barrels of oil a day from onshore wells, according to Cuban government data, while receiving more than 90,000 barrels per day in oil and petroleum products from major ally Venezuela. The REPSOL operation is being watched closely, since major oil revenues would provide a huge boost to Cuba’s perpetually struggling economy.

Dissident economist Oscar Espinosa Chepe said that he didn’t think U.S. involvement in Cuban oil development would necessarily be an obstacle to democratic reforms on the island. “The drilling is going to happen one way or another,” he said. “I would rather have the United States involved.”