Political Risk Latin America Blog @PolRiskLatam

The other way out

Posted in News and Articles, Political Risk by politicalrisklatam on November 19, 2010

by The Economist – Americas View, November 19th, 2010

For years, international Cuba watchers have predicted two possible solutions to the island’s economic problems. The “biological solution” is the death of Fidel Castro. The “geological solution” is a major oil discovery in Cuba’s section of the Gulf of Mexico. Most have assumed that biology would win.

So far, neither remedy has materialised. Fidel Castro is alive, but no longer president. And despite his looming presence in the background, Raúl Castro, Fidel’s brother and successor as president, is implementing some productive economic reforms that Fidel long resisted.

Concurrently, several international energy companies are making a push to find Cuba’s long-awaited oil. In 2011 at least three exploratory drillings are expected to go ahead. The first is expected to be a consortium led by Spain’s Repsol, the only firm with experience in Cuban waters. In 2004 the company did find oil below the seabed, but deemed it not to be commercially viable. Now, Repsol has teamed up with Norway’s Statoil and India’s Oil and Natural Gas Corporation for a second attempt. The group’s drilling rig is currently being built in China and is expected to arrive in Cuba early next year. (continue reading… )



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