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    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

    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

    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

    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.