Posted on 02/12/2006 4:35:26 PM PST by snowsislander
ON THE heels of President George Bush's call to shift away from United States reliance on Middle East oil, a contingent of Texas oilmen and bureaucrats from Havana gathered in Mexico to discuss a nervy alternative: Cuba.
Despite Washington's 45-year trade embargo against Fidel Castro's Government, Cuban officials are courting US energy companies to produce oil in its territorial waters.
Late on Friday, an agency of the US Treasury Department, the Office of Foreign Assets Control, asked Starwood Hotels, the company that owns the Sheraton Hotel in Mexico City where the three-day meeting was being held, to require the Cuban delegation to leave.
"It's outrageous that I, as an American citizen, can't go and talk to someone on Mexican soil," said Kirby Jones, a former World Bank official and the organiser of the meeting for the Washington-based US-Cuba Trade Association.
Mr Jones said the American executives would try to meet with the Cubans at another venue. The US had asked the hotel to remove the delegation because the law prohibited American companies from supplying services to Cuban individuals or companies.
Norberto de Sousa, the manager of the Sheraton Maria Isabel Hotel, declined to comment. Representatives from Starwood could not be reached for comment.
Some of the largest US oil companies, including Exxon Mobil and Valero Energy, were meeting with Cuban officials on what was thought to be neutral ground at the Sheraton Hotel. The oil-importing Port of Corpus Christi and US shipping and oilfield equipment companies also sent representatives.
Cuba has suffered from energy shortages since the Soviet Union halted subsidised oil shipments, but its potential as an oil producer has caught the attention of geologists.
According to the US Energy Information Administration, Cuba's proven oil reserves of 750 million barrels exceed those of Sudan, an African nation that has lured large non-American investments to its oil industry despite US economic sanctions in place since 1997.
"We have absolutely no limitations on working with American oil companies. The barriers, unfortunately, come from the other side," said Alberto Wong Calvo, a director of Cuba's National Office of Mineral Resources.
Oil production has surged since Cuba opened the industry to foreign investment in the 1990s. Operations by two Canadian companies, Sherritt International and Pebercan, have increased output to about 70,000 barrels a day in 2005 from 18,000 barrels a day in 1992. Cuba consumes more than 150,000 barrels a day, and Venezuela supplies oil on favourable financial terms.
The US embargo on Cuba prohibits energy companies from reaching exploration deals with Union Cubapetroleo, Cuba's national oil company. But executives who attended the conference said they were encouraged by the recent relaxation on restrictions of US food exports to Cuba and the competitive implications of Chinese rigs searching for oil this year in Cuban waters off the Florida straits.
"It's a difficult road ahead, but we're in the same neighbourhood," said Amado Duron, director of operations at Valero Energy, the San Antonio-based refining company that could profit from processing Cuban oil at its refineries. "The trend is to reach deals," Mr Duron said.
Cuba hasreached exploration deals in the last year with China's Sinopec, ONGC Videsh of India and Norsk Hydro of Norway. So far, none has discovered large fields similar to those producing oil in US waters of the Gulf of Mexico.
Repsol of Spain spent $US20 million on drilling that came close to a commercial discovery, but executives said oil from the field only partially met expectations. Petrobras of Brazil shelved Cuban exploration efforts after hitting a dry hole in 2001. But record oil prices have brought countries like Cuba into play.
Cuba needs the investment. Its economy has turned a corner with growth of 11.8 per cent in 2005, but it is hindered by electricity shortages. Most of the oil Cuba produces is laden with sulfur, which causes damage when used in power plants.
Cuba could produce 700,000 barrels of oil a day by 2015, according to a study by A. F. Alhajji, a professor at Ohio Northern University — twice the production of Equatorial Guinea, one of West Africa's largest oil exporters. Venezuela is betting on increased activity in Cuba's oil industry, with a $US100 million ($A134 million) plan to upgrade Cuba's Soviet-era Cienfuegos refinery.
If we signed a deal tomorrow, Castro - if still alive - would be nearly 90 when the oil started flowing.
No problem. Just wait until Castro dies.
Frickin oil companies dont give a Sh&t aboput America they just want that buck. They would work for the devil if he need a well in hell.
It's clear to me that we should have long ago opened up the Florida side of the Gulf of Mexico for our own development. At least now we are starting to hear some encouraging words on potentially making progress in the area.
Russia also will play in this game.
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