The Chinese have forged a deal with Cuban leader Fidel Castro to explore and tap into massive oil reserves almost within sight of Key West, Florida. At the same time, Venezuelan President Hugo Chavez, who controls the largest oil reserves in the Western Hemisphere, is making deals to sell his country’s oil to China, oil that is currently coming to the United States.
China made a deal with Castro. What is Cuba getting?
The Chinese have already reopened an abandoned Russian oil refinery in Cuba. Much of the gas refined there is believed to be destined for Freeport in the Bahamas, where the Chinese, through front company Hutchison-Whampoa, has developed a massive port facility and airfield.
This helps Cuba. It might be noted that Cuba pumps about 80,000 barrels of oil a day in Havana and Matanzas provinces, but it is of poor quality and meets less than half of the country's needs.
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To cut to the bottom line, if this oil is in international waters there is nothing to stop an American company from drilling for it. However, the cost of developing this reserve was prohibitive in the eyes of the oil companies. And with the 1963 embargo Cuba was not going to help, lease, sell, or allow Americans to exploit that reserve.
Follow the money. American oil companies did not jump on this because there would be little, if any, profit for years to come.
