Cuba: Energy self-sufficiency on the horizon
Cuba eyes energy self-sufficiency
Cuba is in talks over oil exploration and production deals with Russia, China and Angola, with Moscow shaping up as the partner that could make the Communist island energy self-sufficient, officials said.
The development is unfolding right under the nose of the US, home to oil giants that cannot follow suit due to the US economic embargo on Cuba.
"The Cuban oil industry's venturing out into deep sea waters in the Gulf of Mexico very likely will result in an increase in (Cuba's) oil production," Basic Industry Minister Manuel Marrero said as he announced state-owned Cubapet was in talks over the exploration rights for 23 blocks in the country's offshore play.
Russia is considering work on 15 blocks, which would make Moscow Cuba's top partner in the very costly process, said an APF report.
The remaining eight blocks would go to China National Petroleum Corporation and Angola's Sonangol.
Marrero said US oil companies were welcome to join in, but that Washington first would have to address its sanctions regime.
The exploration newly detailed by Havana would come in addition to other countries already betting on a Cuban black gold rush.
In 2000, Cuba divided its offshore exclusive economic area into 59 blocks, of which 21 have been assigned so far: Repsol YPF has teamed up with Norsk Hydro - Hydro's stake is now owned by StatoilHydro - and India's ONGC Videsh (OVL), on six blocks. OVL is on its own in another two; and state-run companies PDVSA, Vietnam Oil & Gas Group and Petronas of Malaysia each have four; while Brazil's Petrobras has staked out one.
Meanwhile, Canadian companies Sherritt International and Peberco, in the past eight months have pulled out of their deep-water operations without any announcements here to explain their moves.
Cuban authorities in October announced that the Caribbean nation's crude reserves were more than double what had been thought and now were estimated to be about 20 billion barrels.
Repsol carried out the first drilling in 2005 but in an area it found was not commercially viable. However, Repsol and its partners plan to spud another well in July this year.
Then, "at least...another seven drilling operations will take place" through 2012, said Marrero, who acknowledged "the challenge from the technological and financial point of view."
To get its offshore operations in gear Cuba needs a logistical centre; that is being built at the port of Mariel, just west of Havana. But it still lacks capacity to process heavy crude.
Last year, Cuba produced 4 million tonnes of petroleum and gas, officially about 47% of what it consumes. The remainder, about 95,000 barrels per day, it imports from Venezuela on favourable credit terms.