Tue | Jan 22, 2019

New oil frontier

Published:Sunday | December 21, 2014 | 12:00 AM


One of the most prolific oil and gas basins on the planet sits just off Cuba's northwest coast, and the thaw in relations with the United States is giving rise to hopes that the Cubans can now get in on the action.

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

But an oil boom for the Raúl Castro-led country is unlikely anytime soon even if restrictions on US businesses are relaxed because of low oil prices and far better drilling opportunities elsewhere.

Although Cuba's oil and gas industry has long been open to foreign investment, the US 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.

Cuba needs 155,000 barrels per day, and it fills the gap with oil from Venezuela, part of a trade agreement established under former Venezuelan President Hugo Chavez. By comparison, a single large oil platform in the deep-water US Gulf of Mexico can produce 200,000 barrels per day.