It was supposed to be Cuba’s economic savior: vast untapped reserves of black gold buried deep under the rocky ocean floor.
But the first attempt in nearly a decade to find Cuba’s hoped-for undersea oil bonanza has come up dry, and the island’s leaders and their partners must regroup and hope they have better luck – quickly.
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But Cuba has more at stake, and only a few more spins left of the roulette wheel. The enormous Scarabeo-9 platform being used in the hunt is the only one in the world that can drill in Cuban waters without incurring sanctions under the U.S. economic embargo, and it is under contract for only one to four more exploratory wells before it heads off to Brazil.
“If oil is not found now I think it would be another five to 10 years before somebody else comes back and drills again,” said Jorge Pinon, the former president of Amoco Oil Latin America and a leading expert on Cuba’s energy prospects. “Not because there is no oil, but because the pain and tribulations that people have to go through to drill in Cuba are not worth it when there are better and easier options in places like Angola, Brazil or the U.S. Gulf of Mexico.”
A delay would be catastrophic for Cuba, where 80-year-old President Raul Castro is desperately trying to pull the economy out of the doldrums through limited free-market reforms, and has been forced to cut many of the subsidies islanders have come to expect in return for salaries of just $20 a month.
It could also leave the Communist-governed island more dependent on Venezuela, where President Hugo Chavez is ailing with cancer. Chavez provides Cuba with $3 billion worth of heavily subsidized oil every year, a deal that might evaporate if he dies or fails to win re-election in October.
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Their window for finding oil is pretty small. But their desperation really stems from decades of trying to operate on a command economy instead of the free market. This has reduced them to penury, not their lack of oil. People have a lower standard of living in Cuba now than they did before the revolution and country has been turned into an antique auto museum by the Castros' bitterly clinging to a failed economic system.
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