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Posted June 11, 2004 by publisher in Business In Cuba

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By Doreen Hemlock and Diana Marrero Staff Writers | Sun-Sentinel
The future of Cuba’s economy over the next few years may hinge on a wild card: the discovery of commercially viable oil off the island’s shores.

Cash-rich oil company Repsol-YPF S.A. of Spain is set to drill an exploratory well off Cuba’s 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.

Recent surges in world oil prices have only worsened problems, raising Cuba’s oil import bill likely by tens of millions of dollars this year, said economist Jorge Perez Lopez.

But if Repsol finds a large deposit of low-sulfur, light crude in Cuban waters that’s considered worth tapping, then Havana’s cash crunch could “go away in a minute,” said Philip Peters, vice president of the Lexington Institute of Arlington, Va.

“Oil is obviously the wild card,” said Peters.

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. Cuba’s 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. (For study, see [url=http://www.cefa.fsu.edu]http://www.cefa.fsu.edu[/url] .)

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: Russia’s post-communist regime didn’t.

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 won’t be “a blank slate,” said Mark Entwistle, Canada’s ambassador to Cuba from 1993-97. “There will be a myriad of existing, developed relationships with other foreign companies, governments and individuals.”

Those include Canada’s Sherritt International Corp., a big metals and energy producer in Cuba, and Spain’s Repsol—seeking the oil offshore.

Doreen Hemlock can be reached at .(JavaScript must be enabled to view this email address) or 305-810-5009.

  1. Follow up post #1 added on June 12, 2004 by publisher with 3905 total posts

    I think they have been drilling for oil for many years. Can they just sell off their drilling blocks and take the money and run?



    Cuba consulting services

  2. Follow up post #2 added on July 06, 2004 by Angel Sanchez

    Una de las cosas que veo muy oportunistas es que cada vez que alguna situaciûn internacional se le pone difcil a Cuba, mejor dicho al Reich de Fidel Castro, siempre surge algo como esto. Cuando armû lo del Mariel, empezû a quemar Circulos Infantiles, echandole la culpa a la CIA y a anunciar peleas de boxeo entre Stevenson y Mohammed Ali. Ahora que hay una ofensiva mundial en contra de los abusos que ha cometido con infelices disidentes y negritos robandose un barco para irse, casi esta encontrando “la madre de los petrûleos”


  3. Follow up post #3 added on September 07, 2004 by JOHN

        TO ALL CRUDE OIL PURCHASING COMPANIES WORLD WIDE.
    DEAR PRESENTER,
            COULD YOU PLEASE USE THIS FORUM TO INFORM CRUDE OIL PURCHASING COMPANIES WORLD WIDE THAT THE NIGERIA NATIONAL PETROLEUM CORPERATION(NNPC)HAS CRUDE OIL FOR SALE FOR THE YEAR 2004/05.ANY INTERESTED COMPANY SHOULD CONTACT US WITH THE E-MAIL ADDRESS BELOW:
                .(JavaScript must be enabled to view this email address)


            THANKS
          JOHN TERENCE.


  4. Follow up post #4 added on December 08, 2004 by sandeep

    its very bad to read such a paragragh


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