Cuba's new oil industry (BBC)
walterlx at earthlink.net
Thu Nov 13 20:37:44 MST 2003
(So often does the western media,
and the BBC in particular, trash
Cuba's government and the social
system which is defends, that it
is a real pleasure to find such
a report as this which is both
straight-forward and accurate.
(The island's growing integration
with the Latin American economies
makes this progress more probable.
This is part of why the Cuban VP
Carlos Lage is in Bogota tonight.
(Frankly, I get tired of hearing
MYSELF complaining about the bad
reports by complaining foreign
journalists. It's so bo-o-o-ring!
(Public transportation is one of
the island's worst problems and
one it didn't succeed in dealing
with when it was dependent on the
USSR for its petroleum needs.
(If the new investments in oil
helps the island to achieve a
genuine energy independence it
will be the final nail in the
(Not a word about the "Communist
regime" or "Castro's government".
Thank you, BBC! Keep this up.)
Cuba's new oil industry
By Tom Fawthrop
reporting from Havana, Cuba
Cuba's fast-improving energy sector - with domestic oil
production now at 4.1m tons a year and accounting for 80%
of the country's energy needs - is expected to eventually
ease the country's current economic woes.
The Cuban economy has been crippled since the end of Soviet
oil subsidies in 1990, which also spelled the of subsidised
sugar exports to the USSR.
Since then, the economy has grown increasingly dependent on
tourism in order to gain hard currency to pay for needed
imports, forcing strict rationing.
But with domestic oil and natural gas production is growing
at 10% a year, Cuba has begun to meet most of its energy
needs without the need for imports.
Now it is also opening up its offshore oilfields to foreign
Foreign oil companies are actively engaged in offshore
exploration in the Gulf of Mexico with six blocks awarded
to Spain's Repsol and an adjacent four blocks are being
drilled by Canada's Sherritt Mining from the Cuba's
exclusive zone of 112,000 sq km.
The Brazilian state-owned oil company Petrobas recently
signed a new agreement to drill in 10 blocks in the Gulf.
Geological experts consider there is a good chance that
there are some oil reserves in the region, although
previous drilling attempts by Petrobas in a different
location two years ago proved abortive.
Nutec, a UK company based in Aberdeen, has signed a
contract with the Cuban government to train 100 Cuban
engineers in operational skills and safety in the
management of offshore oil-rigs, in preparation for the day
when the anticipated light crude oil starts to flow for the
first time in the Cuban zone of the Gulf of Mexico.
The first batch of ten Cubans have started the training
course in Aberdeen.
The British Ambassador in Havana, Paul Hare, told the BBC
that "this kind of UK-Cuba cooperation fits very well with
our policy of constructive engagement," in contrast to
Washington's policy of continuing to impose a 41-year old
The high density domestic crude oil that now provides 90%
of Cuba's electricity needs has forced power stations to
introduce costly conversions to cope with the high sulphur
But the long term savings in foreign exchange and the
reduction in power cuts are expected to provide a
considerable boost to the economy.
The island's continuing black-outs are on longer due to
fuel shortages, but the result of inadequate maintenance
and transmission lines plus increasing demand from the
tourist sector and hotels.
The transportation sector also desperately needs increased
fuel supplies in order to achieve full normalisation.
The country has the technology to extract biomass from
sugar-cane production and intends to utilise such new
energy sources in the future.
For higher grade oil, Cuba largely depends on imports from
Venezuela which provides preferential rates to Caribbean
countries under the San Jose Agreement.
In addition, a wide-ranging bilateral agreement between the
two countries has enabled Cuba to pay part cash, and part
in training and medical services for the oil.
Several thousand doctors, and hundreds of teachers,
engineers and sports trainers have been dispatched to
assist Venezuela's development programmes in return for
53,000 thousand barrels of oil per day being shipped to
Cuba over a five year period.
And oil experts from Venezuela have come to Cuba to help
develop the domestic oil industry and to adapt its power
With the decline and restructuring of the sugar industry,
Cuba is now dependent on its growing tourism industry for
hard currency to keep the country afloat, plus the export
of nickel and some other minerals.
The island economy is pinning its hopes on striking oil in
the Gulf of Mexico to garner oil for export in order to
invest more in the country's creaking infrastructure and
fund the country's comprehensive free education and health
Story from BBC NEWS:
Published: 2003/11/13 18:30:18 GMT
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