Cuba Unlikely to See Oil Boom Anytime Soon: Experts

© AP Photo / Hasan JamaliA Cuban oil boom is unlikely anytime soon due to plummeting oil prices and lack of deep-water drilling technology and expertise.
A Cuban oil boom is unlikely anytime soon due to plummeting oil prices and lack of deep-water drilling technology and expertise. - Sputnik International
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Plummeting oil prices and lack of deep water drilling expertise will not allow Cuba to increase oil production anytime soon, experts say.

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MOSCOW, December 20 (Sputnik), Ekaterina Blinova – A Cuban oil boom is unlikely anytime soon due to plummeting oil prices and lack of deep-water drilling technology and expertise.

"US oil services firms, which have been prevented from working in Cuba, could provide technology to operators in Cuba to help increase production somewhat. Also, US refiners could find a new market in Cuba for gasoline and diesel or refining technology. But a factor that helped push Cuba to seek closer ties with the United States also could impede major oil exploration there: low oil prices," the Associated Press reported, citing Bob Fryklund, chief strategist for oil and gas exploration and production at IHS.

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Despite the fact that the Cuban oil industry has long been seeking foreign investment, the US embargo has prevented the development of deep-water oil production in the country. Thus far, Cuba is extracting no more than 55,000 barrels of oil per day, while it actually needs 155,000 barrels per day. In order to plug the gap, the country obtains oil from Venezuela, as a "part of a trade agreement established under former Venezuelan President Hugo Chavez," the Associated Press underscores.

The media outlet emphasizes that by comparison, a single American deep water oil platform in the Gulf of Mexico can produce 200,000 barrels per day. Since the US is abolishing its longstanding sanctions policy against Cuba, American firms could provide the state with their most advanced drilling technologies. Alas, sliding oil prices are forcing drillers to abandon risky projects, since they are unlikely to result in high margins.

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According to the US Geological Survey, there are about 4.6 billion barrels of undiscovered oil in Cuba.

"Plummeting oil prices make significant exploration of the billions of barrels of crude believed to be buried off Cuba’s part of the Gulf of Mexico prohibitive right now," notes OilPrice.com media source.

"It’s there somewhere, but efforts over the past two years by majors such as Spain’s Repsol and Malaysia’s Petronas to find the oil have come up dry—or at least not wet enough for commercial development," the media outlet stresses.

Cuban officials are counting on the development of the country's oil industry. Gas and oil exploration projects are like "a beacon of economic hope" for Havana, the Associated Press remarks. However, 2015 is unlikely to become the year of Cuban oil.

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