With Fidel Castro gone, US oil sector shows interest in Cuba

Mar 21, 2008 01:00 AM

Nearly a month after Fidel Castro officially stepped down as Cuba's president and his younger brother Raul was appointed his successor, the US oil industry appears watchful of the transition, but remains hemmed in by the 46-year-old US embargo against the island state.
"There's significant interest in what may transpire and with the changes beginning to take place," David Mica, executive director of the Florida Petroleum Council, said.

It's unclear if Raul Castro will open Cuba's economy and whether the US will ditch the embargo, he added.
"A lot of eyes are watching," Mica said. "The Florida business community is paying very close attention to what's going on down there with regard to drilling and lease sales," he said.

The American Petroleum Institute opposes "unilateral" US sanctions, a spokeswoman said, though she did not directly say if the organization opposed the US embargo against Cuba, put into place in 1962.
"API does not support any US unilateral sanctions," the spokeswoman, Cathy Landry, said.

The US embargo excludes agricultural exports to Cuba.
Asked if the API would support an exemption allowing US oil companies to operate in Cuba, Landry said: "API does not have any position on an exemption. All US oil companies that are members of API comply with the law, and the law states that US companies cannot invest in Cuba," she said.

Among US oil companies, ExxonMobil would be open to operating in any new markets where allowed by US law, a spokesman said.
"Consistent with our long-standing global business strategy, ExxonMobil will pursue profitable business opportunities that meet our investment criteria as they arise in countries around the world in which we are permitted to operate," said Len D'Eramo, manager of upstream media relations for ExxonMobil. "With that noted, Cuba represents a US-sanctioned country, as such we are not permitted to operate there," D'Eramo said.

Cuban-born Jorge Pinon, an independent Florida-based energy consultant and academic fellow at the University of Miami, said Cuba's offshore waters appeal to US oil companies because of their proximity. The area "seems promising geologically," Pinon said.
"The Gulf of Mexico is known, it's not like going to the Arctic or the Orinoco Basin."
A 2004 study by the US Geological Survey determined that the North Cuba Basin holds a mean average of 4.6 bn barrels of undiscovered oil and a mean average of 9.8 tcf of natural gas.

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