Who Will Help Cuba Exploit its Offshore Oil Wealth?

June 16, 2008

Several guest commentators, including Cuba expert Vicki Huddleston, responded to questions posed by the Inter-American Dialogue’s Latin America Energy Advisor. The full issue is available through subscription on their Web site.

Q. Cuba reportedly plans to start drilling sometime next year to access several billion barrels of crude believed to lie off the country’s coast. With Cuba’s limited resources and technology, who will help the Caribbean nation exploit its offshore oil wealth? Will US companies be allowed to be involved? What impact would production from the fields have on Cuba’s economy?

A. Citing rising oil prices, President Bush called for repealing the ban on drilling for oil along our continental shelf. Vice President Cheney, in an effort to justify US drilling in offshore waters, claimed that China was drilling for Cuban oil 60 miles from the Florida coast. Ironically, neither Bush nor Cheney have any intention of allowing American companies to exploit any of the 4.6 billion barrels of unproven oil reserves or the 9.8 trillion cubic feet of natural gas off of Cuba’s coast. Yet, allowing US petroleum companies to do so would go a long way toward resolving both their concerns. If we had access to Cuba’s offshore oil, it would diversify our sources—Venezuela is now our fifth largest supplier—and help dampen the upward price spiral at the pump. If American companies with expertise in oil exploitation and protection of the environment were able to cooperate with the six oil companies that have contracts to search for Cuba’s offshore resources, we would have considerably greater confidence that the latest and safest technology would reduce the environmental impact and diminish the possibility of a spill that might impact states along the Gulf of Mexico. Critics will argue that allowing American companies to become involved in exploiting Cuba’s oil is a concession to an autocratic government. But excluding American companies will not prevent others from doing so nor change the Cuban leadership. Rather, it will simply exclude us from a new source of oil and possibly heighten the risk to the environment. As the competition for oil grows, our isolationist policy may become more costly to us than to Cuba.