For decades, the only promise most Cubans
saw in the ocean north of their island was the current that carries
homemade rafts to Florida. That all changed a few years ago when
geologists estimated that between 5 billion bbl. and 10 billion bbl. of
oil lie beneath the waters off Cuba's
northwest coast. Suddenly it seemed as though the hemisphere's sole
communist nation might finally end its desperate dependence on oil-rich
allies like the former Soviet Union and Venezuela - and perhaps even escape its impoverished economic time warp altogether. Washington's
own Cuba time warp got a jolt as well. The oil discovery has renewed
debate over whether a crude-thirsty U.S. should loosen its 46-year-old trade embargo against Cuba
and let yanqui firms join the drilling, which is taking place fewer
than 100 miles off U.S. shores. Despite the Bush Administration's hard
line on Cuba, Republicans in Congress have proposed legislation to
exempt Big Oil from the embargo. That clamor is sure to rise -
especially if Barack Obama, who is more open to dialogue with Havana,
becomes the next President - now that Cuba's state oil company,
Cubapetroleo, or Cupet, has announced a stunning new estimate of more
than 20 billion bbl. bubbling off its shores. "This is not a game,"
Cupet's exploration manager, Rafael Tenreyro, assured reporters in Havana last week. If
true, those potential reserves could make Cuba a major petro player in
the hemisphere. (The U.S. has reserves of 29 billion bbl.) And it could
render the embargo an even more ineffective means of dislodging the aging Castro brothers, Fidel and current President Ra[a {u}]l.
"If it really is 20 billion, then it's a game changer," says Jonathan
Benjamin-Alvarado, a Cuba oil analyst at the University of
Nebraska-Omaha. "It provides a lot more justification for changing
elements of the embargo, just as we did when we allowed agricultural
and medical sales to Cuba" a decade ago.But is the Cuban calculation really on the level? Skeptics ask if the
20-billion-bbl. estimate is just a ploy to rekindle investor interest,
at a time when falling oil prices could make the maritime find less
attractive to the potential international partners Cuba needs to
extract the oil. The effort is all the more urgent, they add, because
reduced oil revenues could also make friends like left-wing Venezuelan President Hugo
ChÁvez less able to aid Cuba with cut-rate crude shipments and capital
to improve the island's aged refineries. "The Cuba numbers from my
point of view are not valid," says Jorge Pinon, an energy fellow at the
University of Miami and an expert on Cuba's oil business. "I think
they're feeling a lot of pressure right now to accelerate the
development of their own oil resources." Benjamin-Alvarado gives Cuba's
geologists more benefit of the doubt; but he calls the 20-billion-bbl.
estimate "off the charts." "I trust them as oil people, and their
seismic readings might be right," he says, "but until we see secondary,
outside analysis, this is going to be suspect." CONTINUE READING..