Hopes, Fears and Doubts About Cuba’s Oil Future

One of the most plentiful oil and gas basins on the planet sits just off Cuba’s northwest coast, but experts say low oil prices and better opportunities elsewhere mean a Cuban oil boon is unlikely in the near future — even if U.S. business restrictions are relaxed.

AP reports:

It’s a prospect welcomed by Cubans desperate for economic growth yet deeply concerning for environmentalists and the tourism industry in the region.

… “(Cuba) is not going to be the place where operators come rolling in,” says Bob Fryklund, chief strategist for oil and gas exploration and production at the analysis firm IHS.

Although Cuba’s oil and gas industry has long been open to foreign investment, the U.S. embargo has denied it some of the world’s best deep-water drilling technology and expertise. As a result, Cuba produces just 55,000 barrels of oil per day. About one-third of that is produced by a Canadian firm called Sherritt International.

The U.S. Geological Survey estimates there are 4.6 billion barrels of oil lying beneath Cuba, not all of which could be pumped and refined. The U.S. Gulf of Mexico, by contrast, contains an estimated 10 times that much. Also, Mexico contains bigger and better-known fields, and its government recently amended its constitution to allow foreign investment in its oil industry.

— Posted by Alexander Reed Kelly.