Mexico City – Cuban officials invited U.S. corporations Friday to lobby against the U.S. trade embargo and invest in the communist nation’s energy sector, as they announced plans to double their drilling capacity and explore for oil in the island’s Caribbean waters.
In the first private-sector oil summit between the two countries, executives from U.S. giants like Exxon Mobil Corp., Caterpillar Inc. and Valero Energy Corp. were meeting with Cuban government officials in Mexico City this week to learn about Cuba’s potentially lucrative oil reserves.
“We would be happy if North American companies also participated in future projects,” said Raul Perez de Prado, Cuba’s vice minister of basic industry.
U.S. executives should work to “eliminate the absurd barriers that today limit” investment, Perez de Prado said, referring to the 45-year-old U.S. trade embargo designed to undermine Fidel Castro’s communist government.
In the two years since petroleum deposits were found off its coast, Cuba has inked exploration deals with Canadian, Chinese, Indian and Norwegian firms.
But U.S. corporations, their hands tied by the embargo, have been forced to watch the flurry of activity taking place less than 60 miles off the coast of Florida.
This week’s gathering could be “a watershed moment” that ushers in a change in U.S. policy, said Jonathan Benjamin-Alvarado, a political scientist at the University of Nebraska, Omaha, who studies the Cuban energy sector.
One year after Cuban and U.S. agricultural officials held similar meetings in Mexico in 1999, the U.S. government passed a law allowing food and agricultural exports to Cuba on a cash basis.
Cuba says it has since purchased $1.5 billion in American food.
ExxonMobil Ventures Mexico Ltd. President Joe Newhart said the three-day meeting was his company’s first chance to meet Cuban energy authorities, and called it an “opportunity to see what goes on in Cuba firsthand.” Benjamin-Alvarado said working with Cuba would offer U.S. oil companies a host of opportunities, from building refineries to storing oil if a hurricane should wipe out supplies in Houston, for example.
Cuba’s first well – found in 2004 by Spanish petrochemical company Repsol-YPF – was not considered commercially viable, but the discovery of reserves fueled the government’s hopes of becoming more self-sufficient amid tightened U.S. sanctions.
The island nation has since invested $1.7 billion into its energy sector with help from Canada, Europe and Latin America.
Juan A. Fleitas, general director of oil monopoly CUPET SA, said Cuba plans to revamp its energy sector in the next few years, including doubling its drilling capacity and exploring its 59 deep-water blocks.
Foreign companies have agreed to explore 10 blocks so far, and six others are under negotiation.
Cuba, once almost wholly dependent on foreign fuel imports, now produces more than 30 percent of its own crude.
Mike Martinez, president of Mexico-based oil engineering firm Bay-Inelectra, suggested that Cuba could offer the United States a viable oil source amid instability in the Middle East and elsewhere.
“Now we’re dealing with a lot more unstable places, like Nigeria and Venezuela with (President Hugo) Chavez,” said Martinez, whose family fled Cuba in the 1960s.
The meeting, which ends Saturday, is sponsored by the U.S.-Cuba Trade Association; Texas-based Valero, the biggest U.S. oil refiner; the Louisiana Department of Economic Development; and the Texas Port of Corpus Christi, among others.
