Cuba's Hunt For Oil Raises Questions For U.S. Drilling is set to begin this fall off Cuba's north coast, where geologists believe there could be nearly 5 billion barrels of oil. A significant find could affect the 50-year-old U.S. trade embargo, but it also may present new environmental threats for Florida.
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Cuba's Hunt For Oil Raises Questions For U.S.

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Cuba's Hunt For Oil Raises Questions For U.S.

Cuba's Hunt For Oil Raises Questions For U.S.

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In the deep waters off Cuba's north coast, an oil rig will be up and drilling by this fall. Geologists believe the area may contain huge deposits of undersea crude. A significant find could transform Cuba's weak economy and possibly transform relations with the United States. It would also prevent new environmental risks for the nearby Florida coast. Nick Miroff reports from Havana.

NICK MIROFF: Thirty miles west of Havana is the port of Mariel - the town that was the departure point for more than 100,000 Cubans who left the island in the 1980 Mariel boatlift. Today, it's a construction site as crews work furiously to finish new port facilities and a railway with hundreds of millions in Brazilian financing.

Mariel is being remade into a servicing hub for the Cuban oil industry of the future. This fall, the Spanish company Repsol plans to start drilling five exploratory wells in Cuban-controlled waters at depths up to 5,000 feet - about as far down as BP's Deepwater Horizon.

U.S. trade sanctions against Cuba require the rig to contain no more than 10 percent U.S. technology, which has slowed its completion. Built in China and owned by an Italian company, the rig is now in its final construction phase and set to depart from Singapore in June.

A study by the U.S. Geological Survey estimates there are nearly five billion barrels of oil in the bedrock off Cuba's north coast, enough to make the island a major energy player in the region. Cuba's own geological studies show several times that amount.

Ricardo Torres is a Cuban economist who tracks the energy sector.

RICARDO TORRES: (Spanish language spoken)

MIROFF: Thousands of jobs will be created if Cuba can go from being a net importer of energy to an oil exporting country, Torres said. Then there are the other subsidiary industries that could also arise. And even if it takes several years to bring the oil to market, he said new credit lines will open up for Cuba's cash-strapped government.

What's less clear is the impact a major discovery might have on the 50-year-old U.S. trade embargo. Those sanctions will keep American companies on the sidelines, but representatives from energy producing states have already proposed new exceptions to the embargo for U.S. oil industry firms.

Marc Frank is a reporter for the Financial Times in Havana who's been covering Cuba's long search for domestic oil supplies.

MARK FRANK: Clearly it makes the embargo less effective. And adds an additional question to why that policy still exists. What's its purpose? And so one would think it would lead to more pressure towards changing that policy.

MIROFF: Oil companies from Malaysia, Norway, India and several other nations have also signed exploratory drilling agreements, and Iran's foreign ministry spokesman said, during a Havana visit, recently, that his country stands ready to help.

Since the drilling will happen just 60 miles off the Florida coast, John McAuliff of the Fund for Reconciliation and Development, a group that advocates engagement with Cuba, says it's in Washington's best interest to work with Havana on contingency plans. After all, he says, the U.S. has the best cleanup technology and know-how.

JOHN MCAULIFF: The question is how you minimize the risk, and there's only one way to minimize the risk. And that is to have the kind of collaboration with Cuba that we have with Mexico or the Bahamas, or any other country that is exploring for oil in a way that's potentially damaging to the U.S.

MIROFF: At a U.S. government conference last month in Washington, on safe drilling practices, Interior Secretary Ken Salazar called Cuba's exploration plans an issue of concern that the Obama administration is watching closely. But Cuba wasn't among the dozen or so countries invited to the conference.

For NPR News, I'm Nick Miroff in Havana.


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