Repsol: Cuban Style Economic Culture

Isbel Diaz Torres

HAVANA TIMES — Nearly three weeks after it became widely known that the Spanish energy company Repsol had come up empty handed in its oil drilling efforts off the coast of Cuba, after the entire international media had squeezed the news dry, the Cuban press stooped to partially and manipulatively informing the people of the island of this finding.

In my opinion, the communiqué issued by Cubapetroleo (or “Cupet,” the island’s state-run oil company) overestimates the potential of Cuba in terms of the reserves of that site. It places emphasis on the zone “covering an area of 112,000 square kilometers in the Gulf of Mexico, one of the major oil producing basins worldwide, with a high potential for the discovery of new reserves. “

But this doesn’t mean that Cuba has all of the Gulf of Mexico at its disposal for drilling. Plus, the government lacks a calculation for the reserves in the particular blocks under its control. Nonetheless, the authorities here have reported the astounding figure of 20 billion barrels of oil available.

It’s curious that with “so much Cuban oil,” Repsol has abandoned the effort without even pursuing the two additional wells it had planned. This action was taken after the company spent about $150 million on the first dry well.

“How can Cupet explain to the Cuban people the decision to abandon the effort?”

Actually, not only does Cupet fail to provide an explanation, but it doesn’t even refer to Repsol’s walking away from the project. Apparently this is some special type of “economic culture” that the Cuban media, businesses and government want to promote.

What’s more, the information published on the Granma newspaper’s website wasn’t positioned to be read by anyone. This important article didn’t appear in the June 6 cover, one had to dig through the “National” section to find it in fourth place, under a less that revealing title that simply reads “Informative Note,” and without the needed explanations.

In case you have doubts, here I’m linking the national page of Granma website’s English edition for that day, where you’ll see that the note is preceded by an article on health care, another on the death of the mother of a 1997 victim of anti-Cuban terrorism, and then under two articles on Cuban rum.

The same happened in the print version in Spanish: The “informative note” was on the second page. And on the cover?: The planet Venus, Vladimir Putin, the Olympics and the environment.

Did they want the information to be known or not?

In 2005, Fidel Castro said on a televised panel discussion: “We need an economic culture among the people. There isn’t one among our country’s people. There’s no economic culture in our country therefore people don’t know where the money goes.”

I believe that for a good while it’s been known why people haven’t had an economic culture. Censorship by the Communist Party/government has kept the press from addressing and investigating these issues in a timely fashion and with the transparency and conflict this implies.

Although Cuba currently produces about half of its oil and gets the other half from Venezuela, the truth is that the deposits on land and in shallow water appear to have reached the limits of production.

That is why the government has turned its attention to its economic zone of the Gulf of Mexico, which has been divided into 59 blocks, 22 of them under “risk contracts” with the companies Statoil-Repsol-OVL (Norway, Spain and India), PDVSA (Venezuela), PetroVietnam, Petronas (Malaysia), Sonangol (Angola), CNOOC (China), Gazprom (Russia) and others.

This still means that almost 63 percent of its area is not yet under contract and some of the contracted blocks have now been abandoned by Repsol: a panorama that’s not at all encouraging and that the Cuban government and the media are determined not to face.

I confess that personally I don’t want to see a single drop coming out of those waters for the safety of the species that live there, and also with the hope that at some point we Cubans will prepare to implement a truly sustainable and environmentally responsible development model.

The real development of alternative energy sources — mainly renewable ones — will be vital for Cuba in order to achieve energy sovereignty and to avoid the tragic events triggered by British Petroleum in 2010, though Cuban journalists seem to have forgotten about that incident.

For now, I welcome the decision by Argentina to expropriate 51 percent of the shares of state-owned YPF, all of those belonging to the 57.4 percent that was in the hands of Repsol since 1999. I’ll also continue to look (not in the national press, of course) for more information about economic events on my green island.

Isbel Diaz

Isbel Diaz Torres: Pinar del Rio and Havana are my cities. I was born in one on March 1, 1976, and I’ve always lived in the other. I am a biologist and poet, though at times I’ve also been a musician, translator, teacher, computer geek, designer, photographer and editor. I’m very non-conformist and a defender of differences – perhaps due to always having been an ever-repressed “model child.” Nothing enthralls me more than the unknown, nature and art; these serve as my sources of mystery and development. A surprising activism has been born in me over the recent period. Though I’m not very sure how to channel it, I feel that it’s a worthy and legitimate energy. Let’s hope I have the discernment to manage it.


8 thoughts on “Repsol: Cuban Style Economic Culture

  • June 21, 2012 at 10:47 am
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    Despite all comments in retaliation to the US, which by the way are expected from the same people, sustainable energy is needed to create a better world “No doubt about it” with respect to oil drilling, it has caused more damage than good, and we had experieced this issues in the US as it happened with BP over the gulf of mexico. As today, solar technology has been one main focus to replace the old drilling option, as well as, the use of Nuclear Plants; Unfortunally, to the surprice of many the cost of drilling oil seems cheaper. The fact is there’s no inmediate solution to this problem…the good news is we are continuing to work in creating cheaper energy as an alternative to oil.
    ps: For those insulting and attaking posters that’s were the real ignorance lies. There’s no need for such unless you lack the capacity to make your point.

  • June 19, 2012 at 1:58 pm
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    Moses the reason why you find the concept of sustainable energy laughable is because as an immigrant you were assigned a place to live surrounded by poverty, poverty in your particular system has a direct correlation with ignorance and well ignorance is all that you display. Every first world country is working hard on moving away from oil. Iceland for example, their primary energy supply is 81 percent renewable and there are many more examples that I do not wish to educate you on. As you already learned you have to pay for knowledge out of pocket and I do not accept capital one credit cards. I hope that your journey of self-hate as a Cuban takes you exactly where you are today. Nowhere.

    p.s. A wind farm would totally rock on the side of cuba (south?), as years pass and china gets more involved on manufacturing the technology will become less expensive and we can finally put those “huracanes” to work for us.

  • June 19, 2012 at 11:32 am
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    Hey, remember that almost 63 percent of the area is not yet under contract… Cuban part would have screamed if they find oil, I’m sure about it. The government doesn’t want any “bad publicitu” about this topic.
    Thanks for your comments.

  • June 19, 2012 at 4:55 am
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    Oil industry is a lot more complex, Cuban oil exploration in deep water is very expensive and you need to find the big field that an investment would be feasible. There is a lot more oil world wide available, but it`s simply much too expensive. When oil prices go up further they will come back drilling. Cost – Benefit ratio improved.

    In case of the Cuban government, you could be true, they would have screamed, because they want to solve all there problems with this findings. Get credits and develop the economy. Without a finding they are under a lot of reform pressure.
    It takes 4 years to develop the site, most revolutionaries are too old then and a lot of corrupt oppurtunists are in high ranks. Why shouldn´t they keep quiet about a finding? Later they can do the same like the russians did, getting incredible rich within 5 years. World is full of thieves and the oilers are the worst.

  • June 18, 2012 at 3:15 pm
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    Grady, while I want to comment on your “no more oil “idea and the “perhaps they know best” statement, I can’t stop laughing long enough to write because of having read Fidel’s Reflexiones from yesterday, June 17th. Now he wants Cubans to grow the Moringa Oleífera tree as a replacement for milk, meat, and eggs. OMG, you can’t make this stuff up! Jajajajajajaja!

  • June 18, 2012 at 2:40 pm
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    I’m with you on this one, Isbel. Neither Cuba nor any other country needs more oil or oil drilling, either on the land or in the sea. We need sustainable energy production. The sun and earth can give us all the electricity we need, and much cheaper in the long run.

    The Cuban political leaders/comrades seem to talking out of both sides of the mouth on this critical issue. Perhaps they know best, but I doubt it.

  • June 18, 2012 at 11:56 am
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    I can always tell when a revolutionary-minded Cuban or someone blindly sympathetic to Cuba posts a comment. If their comments place economic or profit interests behind political interests, they betry their “cuban-ness”. To a Cuban, politics come first. In the capitalist world, however, after spending $150 million of shareholder money, if Repsol had found so much as a bucket of oil, they would have screamed it from the mountaintops. A capitalists respects the politics but adheres to the adage, “In politics there are no permanent friends or permanent enemies, only permanent interests”. Profit, short-term or long-term, is always a permanent interest.

  • June 18, 2012 at 9:05 am
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    Nice article, but economic decisions are a lot more complex, and most important, governments and oil enterprises lie a lot. Why should the even say that the found something? Big oil findings only let the prices drop, prices on goods they want to sell and they can´t develop the site anyway within the next 3 years. New plattform necesary plus transport infrastructure. Of course shareholders would favor a finding in first place, but Cuba is a highly political thing, with those thieves in the north it`s if better to be poor otherwise they might send some democratic bombs.
    Well but i guess Repsol simply found nothing and it´s too expensive to drill further, the drilled what was in the contract with the italian owner and now the others drill and then it goes to Brazil. Renewable should have been professionally developed long time ago, but Cuban “decision makers” are unable to strike a deal. Negotiating at low levels will never strike a deal or so called door openers who slow done everything until somebody puts money on the table. If the ministers or real bosses want it, they should invite the interested enterprises and make a deal. And next year you have what you want. I wasted enough time to help Cuba with low level ex ministers, vice ministers and so on.

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