by Nick Miroff
May 9, 2011
In the deep waters off Cuba's north coast, a Chinese-built oil rig is
due to begin drilling this fall in an area geologists believe may have
huge beds of undersea crude.
A significant find could transform Cuba's economy and possibly alter
relations with the United States, but it may also present new
environmental threats for the Florida coast.
Mariel — the town 30 miles west of Havanna that was a departure point
for more than 100,000 Cubans who left the island in the 1980 Mariel
boatlift — is being remade into a servicing hub for the Cuban oil
industry of the future.
Crews there are working furiously to finish new port facilities and a
railway with hundreds of millions in Brazilian financing.
This fall, the Spanish company Repsol plans to start drilling five
exploratory wells in Cuban-controlled waters at depths up to 5,000 feet
— about as far down as BP's Deepwater Horizon rig.
U.S. trade sanctions against Cuba require the rig to contain no more
than 10 percent U.S. technology, which has slowed its completion. Owned
by an Italian company, the rig is now in its final construction phase
and set to depart from Singapore in June.
A study by the U.S. Geological Survey estimates there are nearly 5
billion barrels of oil in the bedrock off Cuba's north coast, enough to
make the island a major energy player in the region. Cuba's own
geological studies show several times that amount.
Ricardo Torres, a Cuban economist who tracks the energy sector, says
that thousands of jobs would be created if Cuba could go from being a
net importer of energy to an oil exporting country, and other subsidiary
industries could also arise. Even if it takes several years to bring the
oil to market, new credit lines will open up for Cuba's cash-strapped
government, he says.
Pressure On The Embargo
What's less clear is the impact a major discovery might have on the
50-year-old U.S. trade embargo. Those sanctions will keep American
companies on the sidelines, but representatives from energy producing
states have already proposed new exceptions to the embargo for U.S. oil
industry firms.
There's only one way to minimize the risk, and that is to have the kind
of collaboration with Cuba that we have with Mexico or the Bahamas or
any other country that is exploring for oil in a way that is potentially
damaging to the U.S.
- John McAuliff, Fund for Reconciliation and Development
Marc Frank, a reporter for the Financial Times in Havana who has been
covering Cuba's long search for domestic oil supplies, says it clearly
would make the embargo less effective.
"And [it] adds an additional question to why that policy still exists,"
he says. "What's its purpose? So one would think it would lead to
pressure towards changing that policy."
Oil companies from Malaysia, Norway, India and several other nations
have also signed exploratory drilling agreements, and Iran's foreign
ministry spokesman said during a Havana visit recently that his country
stands ready to help.
Environmental Risk
Because the drilling will happen just 60 miles off the Florida coast,
John McAuliff of the Fund for Reconciliation and Development, a group
that advocates engagement with Cuba, says it's in Washington's best
interest to work with Havana on contingency plans. After all, he says,
the U.S. has the best cleanup technology and know-how.
"The question is how you minimize the risk, and there's only one way to
minimize the risk, and that is to have the kind of collaboration with
Cuba that we have with Mexico or the Bahamas or any other country that
is exploring for oil in a way that is potentially damaging to the U.S.,"
McAuliff says.
At a U.S. government conference on safe drilling practices last month in
Washington, Interior Secretary Ken Salazar called Cuba's exploration
plans "an issue of concern" that the Obama administration is watching
closely. But Cuba was not among the dozen or so countries invited to the
conference.
http://www.npr.org/2011/05/09/135996125/cubas-hunt-for-oil-raises-questions-for-u-s
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