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Profits Likely If Oil Found in Cuban Waters
The future of Cubaâs economy over the next few years may hinge on a wild card: the discovery of commercially viable oil off the islandâs shores. Cash-rich oil company Repsol-YPF S.A. of Spain is set to drill an exploratory well off Cubaâs northwest coast in the Gulf of Mexico this summer. If Repsol finds a major deposit of viable crude, then cash-strapped Cuba stands to gain access to enough export dollars to significantly boost its standard of living. U.S. oil companies likely would seek a piece of the action, boosting pressure on the White House to peel back the decades-old U.S. embargo on the communist-led island. That was one of the conclusions Thursday at a conference on U.S.-Cuba economic relations held in Coral Gables and organized by Florida International University. Panelists said debt-wracked Cuba now faces a serious credit crunch, limiting the dollars and euros available to buy badly needed oil and food abroad. Cuba imports about half its oil, mainly from Venezuela and Russia, but the government lacks the big bucks needed to expand local oil production. But if Repsol finds a large deposit of low-sulfur, light crude in Cuban waters thatâs considered worth tapping, then Havanaâs cash crunch could "go away in a minute," said Philip Peters, vice president of the Lexington Institute of Arlington, Va. The daylong conference looked at strategies Florida might use to tap opportunities in Cuba, when the U.S. embargo is further reduced or lifted. Tim Lynch, who directs an economic forecasting center at Florida State University, predicted a boom with open U.S.-Cuba trade. Cubaâs economy would soar, with growth rates jumping from 2.6 percent last year and likely 3 percent this year to perhaps 7-12 percent yearly. Investment would pour into telecom and transport, spurring billions of dollars in new business with the United States and creating thousands more U.S. jobs, especially in Florida. Yet Florida business leaders voiced caution. Cuba-born Carlos M. de la Cruz, who oversees a Coca-Cola and Budweiser distribution group with sales of roughly $500 million a year, warned a new government in Havana might not fling open the doors to foreign investment: Russiaâs post-communist regime didnât. Plus, a new regime in Cuba might still face a credit crunch, just as other developing nations in the Caribbean now do, said de la Cruz of Miami-based Eagle Brands Inc. A former Canadian diplomat in Cuba also reminded Florida firms to expect competition in a post-embargo Cuba, one no longer led by four-decade president Fidel Castro. A post-Castro Cuba wonât be "a blank slate," said Mark Entwistle, Canadaâs ambassador to Cuba from 1993-97. "There will be a myriad of existing, developed relationships with other foreign companies, governments and individuals." Those include Canadaâs Sherritt International Corp., a big metals and energy producer in Cuba, and Spainâs Repsol -- seeking the oil offshore. Posted by: Jesika Espinola 2004-06-13 |
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