Prevention of Cuba's Drilling Best Serves U.S. Interests

Mauricio Claver-Carone
Director, Cuba Democracy Advocates in Washington, D.C.

Prevention of Cuba's Drilling Best Serves U.S. Interests
Posted: 11/16/11 01:53 PM ET

Reasonable minds should be able to agree that it's not in the United
States' national interest to assist anti-American dictators in searching
for oil to support their repressive, failing regimes. It won't drop the
price of gas in the United States or do anything to enhance our "energy
independence."

Yet American assistance to make oil-drilling in the Florida Straits
profitable is exactly what Cuba's dictators Fidel and Raul Castro hope
to gain as they use the threat of oil-drilling to maneuver the Obama
Administration into once again unilaterally lifting U.S. sanctions on Cuba.

Cuba's search for leverage over the United States is not new. The Castro
brothers have been using offshore-drilling as a lure to extract economic
and political concessions from various nations since 1991, when the
collapse of the Soviet Union ended that country's hefty subsidies to Cuba.

Brazil recently declassified documents showing that in 1993 the Castro
regime offered oil rights on the "most promising" areas of Cuba's
offshore waters to then-President Itamar Franco and Brazil's national
oil company Petrobras. In exchange, Cuba wanted Brazil to shun Cuban
dissidents and cancel a meeting of Cuban exiles at Brazil's Washington
Embassy. The Franco government all-too-happily complied. Years later,
Petrobras exited Cuba empty-handed.

Castro found a new "partner" when Hugo Chavez rose to the presidency of
oil-rich Venezuela in 1998. With the backing of Chavez and Venezuela's
national oil company PDVSA, the Castro regime resumed its diplomatic
offensive signing highly publicized oil-leases with Spain's Repsol,
Norway's Statoil, Russia's Gazprom, India's ONGC Videsh, Malaysia's
Petronas, Canada's Sherritt, Angola's Sonangol, Vietnam's PetroVietnam,
and China's CNPC.

Only one company, however, actually conducted any exploratory drilling:
Spain's Repsol in 2004. The company found some oil, but not in any
commercially viable quantity. It, too, then pulled out of Cuba.
Similarly, Canada's Sherritt and Brazil's Petrobras -- perhaps the most
credible and respected of the region's oil companies outside the United
States -- publicly abandoned their efforts in 2008 and 2011,
respectively, stating Cuban oil production was not "commercially viable."

Why? U.S. sanctions drive up costs of production. Even the Castro regime
admits it. Keep in mind that Mexico's Pemex and Venezuela's PDVSA refine
most of their heavy crude in the United States, and then repatriate it.
As long as U.S. sanctions against the Castro regime are in place,
producing and refining any oil found in Cuban waters in the United
States isn't an option.

That leads to a question: If off-shore drilling in Cuban waters is not
commercially viable for respected regional oil companies experienced in
dealing with Cubans, is such drilling really viable for the Angolans,
Malaysians or the Chinese? The answer is no.

We learned this in 2006, when the Castro regime seemingly had convinced
Washington policymakers, including then-Vice President Dick Cheney and
Congressional leaders that the Chinese were ready to drill off Cuba's
shores. The drilling never materialized, but the threat served the
Castro regime's political interests as Reuters reported: "Havana is
eager to see American oil companies join forces with the anti-embargo
lobby led by U.S. farmers who have been selling food to Cuba for four
years."

It may still be working. The ideological and commercial propaganda
currently emanating from the Castros has both hypocritical
environmentalists and unscrupulous oil companies lobbying to ease U.S.
sanctions. BP's disastrous oil blow-out in the Gulf Mexico last year and
the justifiable public outrage that ensued, virtually invited the
Castros to employ the threat. Cuban Foreign Minister Bruno Rodriguez
confirmed as much in a message to former New Mexico Gov. Bill
Richardson, who recently traveled to Havana in an unsuccessful effort to
secure the release of American hostage Alan Gross.

In a flashback to 2004, Spain's Repsol is back in Cuba preparing to
drill another exploratory well early next year. If Repsol abandons its
drilling, the Castros say India's ONGC Videsh or Malaysia's Petronas
will step forward. Curiously, Chavez last year granted this peculiar
trio extensive oil-rights in Venezuela's Orinoco belt, where proven
reserves are estimated at 235 billion barrels. That's about 50 times
greater than speculations about all Cuban off-shore reserves. Foul play
can certainly be deduced.

Despite the fact that Repsol still faces exploratory hurdles (and
gargantuan production costs if oil is found), the United States is
cautiously licensing specialty oil mitigation firms to respond quickly
to any accident. Commendable as that is, Cuba's search for oil in the
Florida Straits could be thwarted altogether if the United States
swiftly tightened its sanctions on Cuba by withholding U.S. executive
visas for the Castro regime's foreign partners; stripping those partners
of drilling rights and concessions in the United States and our
off-shore waters; multiplying their legal liabilities; and legally
disqualifying use of the drilling rig Scarabeo 9 that is now enroute to
Cuba.

Irrespective of whether the United States lifts sanctions or tries again
to engage Cuba, the anti-American nature of the Castros' regime is
unlikely to provide necessary safeguards for off-shore drilling.
Precaution might bring us temporary peace of mind, but prevention would
better serve our long-term national interests.

http://www.huffingtonpost.com/mauricio-clavercarone/prevention-of-cubas-drill_b_1093925.html