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Page added on July 12, 2014
Putin pledges to help revive Cuba’s offshore oil exploration
Russian President Vladimir Putin pledged to help revive Cuba’s struggling offshore oil exploration on Friday at the start of a six-day tour of Latin America as Russia aims to reassert its influence on the communist-ruled island.
Putin was joined in Havana by close ally and so-called Russian oil czar Igor Sechin, the chairman of state oil company Rosneft, to finalize a deal to explore for oil off Cuba’s northern coast.
The Russian president also promised to reinvest $3.5 billion of Cuban debt with Russia into development projects on the island, part of a deal in which Russia forgave 90 percent of Cuba’s debt, or almost $32 billion, most of it originating from Soviet loans to a fellow communist state.
Both measures inject much-needed foreign investment into Cuba and demonstrate an act of defiance against the United States, which maintains a 52-year-old economic embargo that effectively shuts out many Western companies from doing business in Cuba.
“We will provide support to our Cuban friends to overcome the illegal blockade of Cuba,” Putin said.
Putin’s journey to the back yard of the United States comes as he is under pressure from the West to help restrain pro-Russian separatists in Ukraine and urge them to find a negotiated solution.
Sechin is one of the Russian executives the United States has targeted for economic sanctions over theUkraine crisis. The United States has blacklisted individuals believed to be part of Putin’s inner circle, and Sechin is among the most influential people in Russia.
Putin will also visit Argentina and Brazil for bilateral talks, and while in Brazil he will participate in a summit of the so-called BRICS nations of Brazil, Russia, India, China and South Africa on Tuesday and Wednesday.
On his first stop in Cuba, the Cold War ally of the former Soviet Union situated only 90 miles (145 km) from the United States, Putin met with former President Fidel Castro and current President Raul Castro before receiving the Medal of Jose Marti, Cuba’s highest decoration.
Fidel Castro, 87, stepped down in favor of his brother for health reasons in 2008 after 49 years in power. For an hour he and Putin discussed international affairs, the global economy and Russian-Cuban relations, the Kremlin said.
Any major oil find would radically improve Cuba’s economic trajectory.
Cuba produces about 55,000 barrels per day (bdp) through aging onshore wells and imports about 110,000 bpd on favorable terms from socialist ally Venezuela.
Following a number of foreign companies whose wells have all come up dry, Russian oil company Zarubezhneft last year began drilling in Cuba’s Boca de Jaruco area. That project has been suspended.Zarubezhneft also has been helping Cuba extract from existing onshore wells.
An aide to Putin in Moscow said on Thursday that Zarubeznheft would sign a new deal in Cuba along with Rosneft, but in the end only Rosneft was present.
“Developing new blocks on Cuba’s offshore shelf is (expected) in the very near future,” Putin said.
12 Comments on "Putin pledges to help revive Cuba’s offshore oil exploration"
JuanP on Sat, 12th Jul 2014 2:40 pm
This hits close to home. The waters I fish, camp, and raft in on a weekly basis are downstream from these exploration sites. One more thing to worry about!
These are all good things for Cuba, but I hope they don’t find any oil on their northern waters; a spill there could be hard to contain with the very strong currents in that area.
bobinget on Sat, 12th Jul 2014 4:00 pm
Juan, Putin knows there is little or no oil or gas around Cuba. This is all bout sticking it to Obama.. Who of course is responsible for fifty years old embargo. In return, Putin will regain old Russian military bases and trade agreements. (Russians love bananas, tobacco,
sugar, rum, high tech biotech, medical personal)
Russia already has the oil Cuba needs.
Three European majors came up with six multi million dollar dry holes in 2012/13.
Believe me if we thought there was any chance of oil
around Cuba we would be there.
JuanP on Sat, 12th Jul 2014 4:15 pm
Bob, I agree this was all Russia’s initiative for political reasons and that it is very unlikely they will find large amounts of oil.
I believe Putin is investing time and money in improving relations with other anti US and non aligned countries around the world, because of the PR campaign mounted recently against him and Russia in western media by, mostly, the US government.
Makati1 on Sat, 12th Jul 2014 9:47 pm
I would be more concerned about BP being back in the Gulf than any Russian company. The Russians are more likely to not do something stupid that will cause problems for them with the Americans. BP on the other hand…
As for location. I see an expanded Russian military presence in the Gulf, ‘protecting’ their interests from northern terrorists. Many large ships coming and going and quite capable of carrying missiles that would be minutes from the US. And only proper with the missiles being placed on Russia’s borders by that same country. Tit-for-tat.
The article skimmed over the fact that many anti-US agreements will be made and signed at the BRICS meetings in Brazil this week. But then, it is a US ‘news’ source.
Northwest Resident on Sat, 12th Jul 2014 9:54 pm
bobinget — I believe you are correct — IF there was any oil in or around Cuba, it is a sure bet that America would have found a way to get that oil. The fact that Cuba is still Cuba and that an anti-American regime has been in power so long in Cuba is proof that there isn’t anything there that America wants. Otherwise, they would have found a way to cajole, slime, bribe, extort or force their way in.
Norm on Sun, 13th Jul 2014 6:29 am
Putin will put in Cuban missiles again? Those who don’t know history are doomed to repeat it. Like this voting block, Teabaggers on Welfare in Trailers, or TOW IT.
Davy on Sun, 13th Jul 2014 7:24 am
Mak, in is fantasy of war, missiles, and NuK’s. Mak don’t you think Russia has enough on its plates being a basket case Bric economy spreading itself thin in a geopolitical game of who is the biggest and baddest. I can’t wait to see an economic correction with a drop in oil demand and corresponding oil price drop. OOOps then what will Putt do. It will be like the coyote stepping over the cliff and roadrunner looking at him like ooops.
Arthur on Sun, 13th Jul 2014 10:36 am
Putin is being serious about no longer accepting dollars, not even from old Soviet owned Cuban debts.
Davy on Sun, 13th Jul 2014 11:18 am
Art, good just more complications for Putt. Like Rock says business is business so if you want to play politics it will cost Russia money. You have to pay to play. If Chavez could speak he would tell Putt his gamming cost money. I am sure Chavez had fun doing it as Putt will but their countries will pay for breaking the mold and starting anew. Besides the Putt game is a fad that will run its course. No other system can replace the dollar in the short term. In the long term the global system is dead anyhow so who cares. That is except Mak. It is a major fantasy of Mak.
rockman on Sun, 13th Jul 2014 2:43 pm
I have no idea what exactly the potential for Deep Water Cuban oil might be. And IMHO no one else does either. The Cuban offshore geology is much more complex then the DW US offshore trends. And I’ll reminded folks that it took a much larger number of wells and a great deal more capex before the first significant DW GOM oil field was discovered. And as I read years ago it took 50+ wells in the North Sea before the first major oil field was discovered. And the N. Sea isn’t DW.
Relatively speaking the DW offshore Cuba has been virtually unexplored so far. Which doesn’t mean there’s significant potential there. But it also doesn’t mean it doesn’t exist either.
And even though it’s been producing for more then 30 years the DW GOM isn’t that that foolproof even today. As the $148 million dry hole I was involved with at Devon not long ago proved.
Just one snippet: “The Cuban sector of the deepwater Gulf of Mexico (Cuban EEZ) has significant hydrocarbon exploration potential in a variety of trends.
An offshore extension of the productive Cuban fold and thrust belt, and its associated foreland basin, remain undrilled and constitute a probable major petroleum province of the future. Additional potential is foreseen in traps and reservoir facies associated with Florida and Campeche escarpments, around the flanks of basement high “knolls,” as well as in the deep, open gulf basin.
Oil recovered from DSDP Site 535, in the central portion of the Cuban EEZ, confirms the existence of thermally-mature, viable oil source rocks even in the deepest water areas.”
Another reminder: oil has never been easy to find: many dozens of dry holes were drilled before mighty Ghawar was discovered. Just as hundreds of dry holes were drilled before the 7 billion bbl East Texas Field, the second largest US oil field was discovered…almost 30 years after the discovery of the giant Spindletop Field. And the East Texas Oil Field lies only a few counties north of the Spindletop Field.
Makati1 on Sun, 13th Jul 2014 8:21 pm
rockman, I respect your analysis as it doesn’t have any BS. You are talking from a solid base of experience. I respect that. Thanks.
Too many here have Cold War blinders still attached, but that may be good as Obama is bring it back to pump US arms sales. If they think there will not follow a Russian military presence in the Gulf as this Cuba trade progresses, they don’t have a very good grasp of history. Nor would the Russians be out of line to do so. As I said, tit-for-tat.
Davy on Sun, 13th Jul 2014 9:12 pm
Mak, Cuba is a joke and a Russian presence in Cuba is a joke, Mak. It is nothing but a drain on Russia’s already meager resources being stretched very thin now in an ever increasing engagement in far flung hot spots across the globe. You have 3D cold war blinders on Mak always seeing missiles flying and large navy’s on the move.