Cuba: Florida University Conference - Cuba 'may' have oil reserves

Recent reports suggest that the Castro-Chavez axis may have some potential cards up their collective red sleeves.

The future of Cuba's economy over the next few years may hinge on a wild card: the discovery of commercially viable oil off the island's shores.

Cash-rich oil company Repsol-YPF S.A. of Spain is set to drill an exploratory well off Cuba's northwest coast in the Gulf of Mexico this summer.

~snip~

Panelists said debt-wracked Cuba now faces a serious credit crunch, limiting the dollars and euros available to buy badly needed oil and food abroad. Cuba imports about half its oil, mainly from Venezuela and Russia, but the government lacks the big bucks needed to expand local oil production.

Recent surges in world oil prices have only worsened problems, raising Cuba's oil import bill likely by tens of millions of dollars this year, said economist Jorge Perez Lopez.

But if Repsol finds a large deposit of low-sulfur, light crude in Cuban waters that's considered worth tapping, then Havana's cash crunch could "go away in a minute," said Philip Peters, vice president of the Lexington Institute of Arlington, Va.

"Oil is obviously the wild card," said Peters.

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While there's a rather large 'what if factor' to the article, it's worth noting that a "cash-rich oil company" is investing some significant cash richness in drilling that exploratory well. In presuming Repsol isn't drilling for charity, I'd say that they are fairly confident they'll find something that can be exploited.

Given the potential region-changing implications, such what if's suddenly become - at the very least - prudent calculations that need to be addressed.

Caribbean democratic and business leaders will should be asking themselves some questions.

Silly stuff like:

1. Was the recent spurt of "official" Cuban press releases glorifying Fidel's health and vigor accurate...or not?



2. What sort of continuity does the Castro communist regime have given Fidel's age/health?



3. What is their real track record regarding respecting investors rights?



4. Can the Cuban leadership really be trusted to respect foreign investment and ownership of assets given it's history of 'nationalization' (which is simply a code word for a state stealing everything from private investors and property owners)?



5. Do I want to sink my assets into an ideology that has proven itself to be fundamentally opposed to private ownership of property and capital?



6. Policy-wise, are the risks for regional investors worth allowing European interests to gain a monopoly on potential Cuban reserves, thus possibly enabling the continuity and expansion of Cuba's political influence in the region?



7. Presuming that exploitable oil reserves are discovered and recovered, will it be refined at the jointly-owned HOVENSA PDVSA (Venezuela's state owned oil company) and Amerada HESS (A private American company) refinery at St. Croix US Virgin Islands...or elsewhere? If so, then where?



8. What exactly is the nature of the relationship between Castro's Cuba and Chavez's Venezuela?



9. What sort, and how deep of an impact will an opened - or even partially opened - Cuba have on our region so heavily dependent on tourism markets?



10. Is Cuba headed toward capitalist free-markets and democracy?

As an aside - taken in aggregate, I can't help but wonder at the motives of western 'environmentalists' who are doing everything in their power to eliminate any domestic American exploration for - much less exploitation of - regional energy resources, all whilst turning a blind green eye toward foreign exploration and exploitation of regional energy resources.

The suppressive political intentions of such luddite multilateralisms as Kyoto(PDF) should start making a little more sense in this context.

Hat tip: Rantburg