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    Country drills for own oil as Venezuelan flow falters
    Cuba once got most of its oil cheap from its socialist ally Venezuela,
    largely paid for by exporting medical staff and supplies.
    Published: 09:43 , Refreshed: 09:38 Pulse News Agency International By AFP

    Near the Cuban seaside village of Boca de Camarioca, a giant drill runs
    into the ground and out to sea, probing for oil.
    Cuba once got most of its oil cheap from its socialist ally Venezuela,
    largely paid for by exporting medical staff and supplies — but economic
    crisis in Venezuela has stemmed the flow of crude.
    That has caused “instability” of supplies on the communist island, says
    Roberto Suarez, joint director of the state oil monopoly Cuba Petroleo
    (CUPET).
    “We are making every effort to explore and identify zones that might
    produce oil.”
    The island is being forced to look for alternatives at home as analysts
    warn that, without Venezuela, there are few available abroad.
    Urgent search
    Cut-price oil from Venezuela helped rescue Cuba from the downturn it
    suffered in the 1990s after the collapse of the Soviet Union, its most
    powerful patron.
    But Venezuela’s oil exports have plunged by 40 percent since 2014,
    according to independent analysts.
    Cuban authorities have been regularly resorting to energy rationing
    since last year.
    Cuba consumes 130,000 barrels of oil a day but only produces 50,000
    itself, estimates Jorge Pinon, a former oil executive and now an analyst
    at the University of Texas at Austin.
    Venezuela for years supplied more than 100,000 barrels of crude a day to
    Cuba, which refined and exported the excess.
    But that industry has declined too. UN statistics body Uncomtrade says
    output at the key Cienfuegos refinery plunged from $500 million in 2013
    to $15.4 million last year.
    A total halt to Venezuelan oil imports would cost Cuba $1.5 billion a
    year, Pinon estimates — a further blow to its already grim finances
    after it entered recession last year.
    Billions of barrels
    Dressed in orange overalls, engineer Geisel Escalona supervises the work
    of the 58-meter (190-foot) drill, rented from the Chinese company Great
    Wall.
    CUPET hopes to drill a well dubbed “Varadero 1,008” to tap part of a
    reserve which it estimates to hold 11 billion barrels of oil.
    In the best case scenario for Havana, that would turn Cuba into a
    well-funded small power overnight — able to project the Americas’ only
    Communist regime years into the future.
    But for now, there is no breakthrough.
    The company’s on-shore oil platforms have run dry and attempts to drill
    in the Gulf of Mexico have been fruitless.
    Now, it is using a technique known as “horizontal drilling” in this
    village east of Havana, probing for possible off-shore oilfields with a
    drill that slants underground from an on-shore location.
    “We have reached down to 1,350 meters… and we hope to get down to
    8,200 meters,” Escalona said.
    CUPET already has nine other wells drilled in the broader Varadero zone.
    Between them they account for more than 98 percent of Cuba’s home oil
    production, Suarez said.
    Lifeline from Russia?
    Cuba also appears to be reaching out beyond its shores — it received
    249,000 barrels of crude from Russian state oil firm Rosneft in May.
    That was part of a deal for 1.8 million barrels signed in March with a
    Cuban state metal company. Full terms of the deal were not made public.
    Pinon interpreted it as “a test for a lifeline while they wait for
    Venezuela’s political and economic collapse.”
    However he judged that under the current political conditions, it was
    unlikely Moscow would return to supporting Cuba to the extent it did
    during the Cold War.
    Other traditional allies such as Algeria and Iran, he said, also appear
    economically unable to do much to help Cuba at the moment.
    “I know of no other country that has the financial strength, the level
    of oil production and the political alignment with Cuba which could
    replace Venezuela without it having an impact on the Cuban economy,”
    said Pinon.
    “Brazil, Angola, Algeria, China, Russia? I doubt it.”

    Source: Cuba: Country drills for own oil as Venezuelan flow falters –
    World – Pulse –
    www.pulse.ng/world/cuba-country-drills-for-own-oil-as-venezuelan-flow-falters-id6802843.html

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