The Economist reports on wildcat drilling for oil off the coast of Cuba, in a deepwater zone of the Gulf of Mexico, just around the Yucatan from some of Mexico's most productive wells. Two foreign (and obviously non-US) companies are involved in the exploration. The implications of finding oil in Cuban waters are fascinating.
First, it would provide a major wealth injection into the moribund Cuban economy, and thus extend the longevity of the Castro government. All too often elsewhere, this has led to a rise in corruption, but the Cuban situation is sufficiently different from, say, West Africa, that such an outcome isn't a certainty. In any case, a major oil find would likely make the current US policy of isolation futile, leading the way to future engagement.
Second, if the oil resources were comparable to those on the other side of the Yucatan Peninsula, they could provide oil in excess of Cuba's needs, creating another oil exporter on America's doorstep. This would be a further incentive for normalization, however unpopular that might be with the exile community.
In addition, success in deepwater offshore Cuba could suggest attractive prospects elsewhere in the Gulf, beyond the recent deepwater developments and discoveries. That would be good news for US energy security, irrespective of the impact on Cuba.
Now it only remains to wait for the results of the drilling. If successful, oil could be flowing in four or five years, enough time to work out all the possibilities that my noodling above barely begins to cover.
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