With the U.S. Geological Survey estimating oil reserves and resources in Cuba’s exclusive economic zone (EEZ) amounting to about 4.6 billion barrels, U.S. companies are once again pushing hard, in the context of the recent detente between the U.S. and Cuba, to be allowed to participate in exploration activity in Cuban waters.
Shell Oil Co., the U.S.-based subsidiary of Royal Dutch Shell, and Chevron are only two of the majors lobbying the U.S. Congress and government agencies to support U.S. President Barack Obama’s efforts at significantly loosening and eventually eliminating the 53-year-old U.S. embargo on doing business with Cuba.
The two majors see this as a natural extension of the restoration of diplomatic relations between the two countries and the introduction of policies by the Obama administration that allow limited trade with and travel to Cuba.
A Shell spokesman noted that the company was “still in the process of understanding the implications of recent changes in U.S. policy and timelines for any possible future action by the U.S. Government.”
Of course, if the U.S. embargo on the Caribbean communist state is eventually completely lifted — which can only be achieved by Congressional action, hence the lobbying of members of that institution — it will make it that much more convenient for foreign and even local oil companies operating in Trinidad and Tobago,to take a closer interest in Cuba.
At one time, state-owned Petrotrin was showing interest in some nearshore drilling activity in Cuba, but that was never seriously pursued.
U.S. oil companies’ and energy services’ expertise could possibly make the difference in turning those reserves/resources into discoveries, if given the opportunity.
Other foreign companies have, so far, had little success in offshore exploration in Cuba. Three deepwater wells drilled in 2012 came up dry, points out Jorge Piñon, director of the Latin American and Caribbean Energy Programme at the University of Texas at Austin.
Deepwater wells have successfully been sunk recently off both Guyana and French Guiana, and Trinidad and Tobago is currently trying its hand at this, so Cuba is also hoping to strike it lucky in this regard.
Cuba badly needs more domestic oil production if it is to balance its books and become another Caribbean energy centre, like Trinidad and Tobago, Suriname, Barbados and Belize.
Cuba’s current nearshore and onshore oil output amounts to a mere 50,000 b/d, while its requirement for power generation, transport and industrial activity is around 150,000 b/d. The difference is made up by Venezuela under its programme for supplying crude oil and refined products to selected Caribbean and Central American countries on credit, with repayment spread over a lengthy period.
In the apparent absence of more hydrocarbons of its own, Cuba is energetically promoting renewable energy resources (RE). If renewable energy projects are successful, it could mean that Cuba will need to rely on oil and gas only for transport and for some aspects of industry.
The country’s goal is to generate 24 percent of its electricity needs from RE by 2030, to be generated primarily from biomass (mainly bagasse from its sugar cane sector), but also from wind energy, solar and hydropower.
The cost of achieving this goal has been estimated at US$3.5 billion, largely funded by foreign investors.
New power-generation units fuelled by various sources of RE will help gradually replace what is regarded as Cuba’s “dilapidated” oil-based electricity grid.