Tag Archive for: oil
HAVANA, March 22th Cuba would have to spend nearly $2 billion a year to meet its domestic oil needs if Venezuela’s National Assembly and interim president Juan Guaidó manage to stop deliveries to the Caribbean island.
HAVANA, March 12th The interim president of Venezuela, Juan Guaidó, has decreed the cessation of oil shipments made by the Government of Nicolás Maduro to Cuba, for which he has requested the help of the international community that supports and recognizes him. Read more
HAVANA, Jan 31th (Reuters) – Cuba said on Tuesday it had signed a deal with Algeria to import fuel over the next three years, as it seeks to offset a steep decline in oil shipments from its key ally Venezuela.
HAVANA, July 28th Venezuela’s grim situation is impacting not only millions of households around the country — it is also sending panic waves across the Caribbean all the way to Cuba, a solid ally that for decades now has relied heavily on Chavismo’s generosity.
Cuba, has alienated itself from the rest of the world and has largely relied on Venezuela to stay financially afloat. But Venezuela’s falling oil prices is causing Cuba to distance itself from the South American country.
So far this year Venezuelan oil shipments to the island have declined by 19.5 percent, forcing an energy rationing that is reminding people of the early 90s, when the Soviet Union dissolved and Cuba lost its top provider almost overnight.
Now with Venezuela’s wealth slowly fading away, the geopolitical chessboard may change in a way that some say will inevitably drive Havana closer to the U.S.
“Venezuela’s inability to help Cuba creates a void that will very likely be filled by the U.S.,” said foreign policy expert Giovanna De Michelle to Fox News Latino.
“Cuba’s opening to foreign investment has been slow, but now they don’t have another option if you consider Venezuela’s grim situation,” said Felix Arellano, also an internationalist.
Venezuela and Cuba started strengthening ties soon after Hugo Chavez, a socialist and open admirer of Fidel Castro, came to power in 1999. The alliance, fueled by a close personal friendship, helped the Castro brothers keep the island afloat amid the Soviet Union domino collapse.
Currently – and for more than a decade now – Venezuela supplies more than 50 percent of the island’s intake of oil at very preferential terms. In exchange, starting 2003 Cuba started providing human resources to Venezuela, mostly teachers and medical doctors to support Chavez’s various social programs, like Barrio Adentro and Misión Robinson, which focused on reducing analphabetism.
According to the most recent information available, in 2013 Venezuela provided Cuba with 99,000 barrels of crude oil a day. To date, Cuba has sent approximately 200,000 workers to Venezuela.
This oil-for-workers deal greatly benefitted both Castro’s and Chavez’s agendas: while Cuba kept running on cheap oil, Venezuela found a way to secure and preserve the social programs that are the backbone of Chavismo.
After Chavez died in 2013, his handpicked successor Nicolas Maduro kept the close relationship with Fidel and Raul Castro — according to an FNL count, Maduro has visited Cuba 15 times since becoming president three years ago.
“The new economic scenario doesn’t mean that political relations between Cuba and Venezuela will turn sour,” according to foreign analyst Edgar Otalvora. “Ideologically, they will remain close,” he said, pointing at Raul Castro’s cautious speech before the National Assembly on July 8th.
However, Castro did turn heads when he acknowledged the repercussions that Venezuela’s deepening crisis is having on Cuba.
He said Cuba’s economy grew just 1 percent in the first part of the year, half of what the government had planned for, due in part to “a certain contraction in the fuel supplies agreed upon with Venezuela, despite the firm will of President Maduro and his government to fulfill them.”
“Logically that has caused additional tensions in the functioning of the Cuban economy,” Castro told the National Assembly.
Analysts say the severity of the financial and political crisis in Venezuela may force Cuba to change course sooner rather than later.
“Havana needs to also start drawing investments from Europe, Brazil, Canada and China,” Arellano told FNL. “The down part for the Castro brothers is that this might require political changes in the near future.”
As for the U.S., it is very likely Washington will keep pushing to increase its influence in Cuba regardless of November’s election outcome.
“American investors are betting big on Cuba, which will probably result in the ease of the U.S. embargo [over the island] in the near future,” De Michelle said.
“This will improve the wellbeing of the Cuban people and will make Venezuela’s aid less necessary,” the expert added.
Another scenario is that Venezuela’s opposition keeps gaining ground and, if and when in power, brings to a halt the financial aid it has publicly condemned more than once — many say Cuba is benefitting way more than Venezuela with the current arrangement.
“The loss of the Cuban doctors wouldn’t be such a big problem for Venezuela, given the fact that some of them just work as spies and they can be replaced with our own doctors,” Arellano said.
On top of this, it is no that secret many of these social workers have used their appointment to Venezuela as an opportunity to flee the island’s regime.
According to Colombian authorities, in 2015 as many as 720 Cuban medical doctors entered to their territory from Venezuela. Hundreds of them then requested U.S. visas.
HAVANA, Sept. 3 MEO Australia has executed the Cuba Block 9 Production Sharing Contract (PSC) with the national oil company Cuba Petróleo Union (CUPET) in a ceremony in Havana.
The execution of the Block 9 PSC represents the culmination of over three years of negotiations between MEO and CUPET and is MEO’s first entry into the Cuban oil and gas sector.
The Block 9 PSC area is in a proven hydrocarbon system with multiple discoveries within close proximity, including the multi-billion barrel Varadero oil field. Block 9 contains Motembo field, the first oil field discovered in Cuba.
The exploration period of the Block 9 PSC is split into four sub-periods totalling eight and a half years with withdrawal options at the end of each sub-period. MEO will immediately commence work on the initial activity of evaluating the existing exploration data in the block and reprocessing selected 2D seismic data before determining whether to proceed with a subsequent 24-month exploration sub-period that includes acquisition of new 2D seismic data.
MEO’s Managing Director and CEO Peter Stickland commented, “We are delighted to complete the execution of MEO’s first oil and gas block in Cuba. As an early mover into Cuba, MEO is now one of the few western companies with a footprint in the expanding Cuban hydrocarbon sector. The geology of the block has analogies to petroleum systems in which MEO’s technical personnel have significant experience, and we see substantial potential in Cuba overall and Block 9 in particular.”
MEO has been in discussions with CUPET since prequalifying as an onshore and shallow water operator in early 2013. Block 9 was MEO’s preferred entry block due to the confirmed presence of hydrocarbons and the close proximity to existing production and infrastructure.
Block 9 covers approximately 2,380 sq km of predominantly low lying farmland on the north coast of Cuba approximately 130 km east of Havana. It has an existing petroleum exploration dataset of modern 2D seismic and multiple wells.
MEO has pursued this opportunity in collaboration with Petro Australis Limited, an unlisted Australian company. In the event Petro Australis qualifies for participation in Cuba, it has an option, which it can exercise within 24 months, to secure up to a 40% Participating Interest in Block 9.
HAVANA, July 24 A first-of-its kind oil summit in Cuba organized by U.S. energy-industry heavy hitters is expected in October.
The meeting, set for Havana from Oct. 18-21, comes amid loosening tensions and expanding diplomatic relations between the United States and Cuba.
“The symposium is both historic and unique, the first-ever bringing together of high-level experts and leaders from the U.S. to join in discussion with parallel experts and leaders in Cuba and other Gulf and Caribbean nations,” reads the mission statement of the Safe Seas — Clean Seas conference.
It is organized by two former high-ranking executives of the International Association of Drilling Contractors — Lee Hunt and Brian Petty, respectively former president and executive vice president of global government affairs for the trade group.
Hunt and Petty said the purpose of the conference is to work on establishing uniform environmental and safety policies for offshore drilling throughout the Gulf of Mexico and the Caribbean Sea.
As things stand between the United States and Cuba, this is not possible now. The opening up of a U.S. embassy in Havana and a Cuban embassy in Washington, D.C., this week further signaled strengthening ties between the neighboring countries. But the more-than-50-year-old U.S.-imposed trade embargo against Cuba remains.
Because of the embargo, most American companies skilled in oil cleanup would be prohibited from providing immediate assistance if an oil spill occurs during a Cuban offshore drilling operation.
There are special U.S. government licenses available to American companies allowing them to do business with an oil rig drilling in Cuban waters, but not nearly enough to effectively deal with a disaster.
Based on the amount of equipment, vessels and services required to contain the 2010 DeepWater Horizon spill, Lee estimates less than 5 percent of these U.S. resources would be legally available to respond in Cuban seas.
The embargo also impacts the types of rigs and ships that can take part in an offshore Cuban operation. To comply with the embargo, a rig or vessel must have fewer than 10 percent of its parts made in the United States. If the ship is not compliant with the embargo, companies using it could face U.S. sanctions.
This was an issue in 2012 and 2013, when several international companies used an Italian-owned, Chinese-built semi-submersible rig to look for oil in the Florida Straits between Cuba and Key West.
The rig, the Scarabeo 9, met the specifications of the embargo. But there was concern among American officials, environmentalists and oil industry people that the embargo would hinder cleanup efforts in the event of a spill.
The operations largely came up empty, but the Cuban government thinks there are large supplies of oil and gas below the ocean floor in the deep waters of the Straits and Gulf of Mexico.
With that in mind, Hunt and Petty said it is necessary to “discuss the strategic and policy developments that would enable Cuba, and foreign upstream operators in Cuba, to trade with U.S. companies in certain areas of equipment and services, in particular those U.S. oilfield products and technologies that serve a dual purpose of not only enabling safe drilling practices, but also effective, successful emergency responses to oil spills to assure clean seas.”
More companies are looking to drill in the same area, according to industry sources. Media in Angola recently reported that country’s state-owned Sonangol oil company will be ready to drill in the Gulf between 2016 and 2017.
Ricardo Cabrisas Ruiz, Cuba’s vice president of the Council of Ministers, stressed, however, that such operations will be difficult without the U.S. lifting the embargo.
But some industry watchers have their doubts that, even with the lifting of the embargo, Sonangol is ready to embark on such a large operation off Cuba.
“I think this is a very long shot,” said Jorge Pinon, director of the Latin American and Caribbean Energy Program at the University of Texas, Austin. “Sonangol recently announced a cutback of over $1 billion in their budget due to low oil prices. I believe it when I see it.”
HAVANA, July 22 (UPI) Cuba expects to kick start its deepwater oil exploration activity with assistance from Angola’s state-run energy company Sonangol, a Cuban official said.
Cuba is opening its doors more for Western powers after a long Cold War policy of isolation from the United States. The country in the past worked to cut the amount of oil it imports from Venezuela through development of its own offshore reserves.
An unnamed official from Cuba’s Cubapetroleo, or Cupet, told energy reporting service Argus the preliminary deal with Sonangol outlines drilling schedules.
“The matters to be determined include which of the blocks contracted by Sonangol will be drilled, the sourcing of a rig and the timing of the start of the work,” the official said.
The U.S. Geological Survey, which reviewed Cuba’s offshore potential as the thaw began earlier this year, estimated there were about 4.6 billion barrels of crude oil and 9.8 trillion cubic feet of natural gas in the form of undiscovered, technically recoverable, reserves in Cuba. About three-quarters of that is said to be located within 50 miles from shore.
The United States and Cuba formally restored diplomatic relations earlier this week. Prior to the trade embargo enacted in 1962, U.S. companies held interests in several petroleum refineries in Cuba.
The Cupet official told Argus there was scant interest from U.S. energy companies despite invitations from Cuba.
“We want to ensure all is in place for interested companies if and when the United States lifts its damaging economic embargo on our country,” the official said.
Venezuela dominates the sector by meeting more than 60 percent of the country’s petroleum demand. The second largest refinery in Cuba processes only Venezuelan crude oil.
HAVANA, July 5 (acn) Seven citizens, including an Argentinean, were given up to 13 years of prison in Cuba after being convicted with corruption in a Cuban oil company, which was inflicted huge financial loss and damage of 14 crude oil wells.
A Cuban televisión report said this week that Argentinean Emilio Enrique Cotter, representative of the Uruguayan DFS company was given 10 prison years, while the rest of those involved in the corruption case, all Cubans, were given from 2 to 13 years.
The event dates back to mid 2009 and the defendants were convicted for bribery, acts in the detriment of economic activity or contract processing, failure to meet their duties in economic entities, abuse of authority and falsification of private documents.
Cuban State Security official Eduardo Perez said that the corrupt mentality of the Argentinean Emilio Cotter led him to bribe some of the Cubans, but that there are clues that Cotter´s real aim could have been that of damaging Cuban economy, since he could not justify the source of the money he would give the Cubans or the legal domicile of the DFS company in Uruguay.
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