Will Cuban Oil Find Break U.S. Embargo?

Cuban President Fidel Castro addresses a crowd of Latin American students gathered in Pedernales,in Holguin province, Cuba, for the anniversary of the attack on the Moncada barracks Wednesday, July 26, 2006. The attack, in 1953, is said to be the beginning of the Cuban Revolution.(AP Photo/ Javier Galeano) (Javier Galeano - AP)

Peters, of the Lexington Institute, agrees. "I think if you call (oil companies) up and ask them, 'What is your position on this?' they'd say yes, we're behind an exemption in the embargo. But I'm not sure if they would get behind it in a major way yet."

In response to queries from The Associated Press, the American Petroleum Institute in Washington, D.C., the industry's lobbying arm, issued this statement:

"We cannot speak to individual interest in Cuba, but we can say that API members are more focused on expanding access on the U.S. portion of the outer continental shelf, which is much closer to the existing pipeline network and where they have more information about oil and natural gas reserves."

All of this is still somewhat premature, says Pinon, the former oil executive and research associate. "We are still three to five years away from commercializing any of those Cuban reserves."

There is at least an 18-month backlog on the leasing of deep-water rigs, he says, and "crude oil is worth zero if you can't move it or process it. Even if they find the oil, what are they going to do with it?"

Benjamin-Alvarado, a regular visitor to Cuba who has been following that nation's energy development for 15 years, concurs. Cuba, he says, needs help "downstreaming" _ upgrading its ports, refineries and maintenance equipment.

Already, though, Venezuela's state oil monopoly, PDVSA, has signed a $100 million deal to revamp Cuba's Cienfuegos refinery, a Russian relic from Cold-War days, and to increase oil storage capacity at the Port of Matanzas.

"Every day the United States puts off making the path into Cuba, that window of opportunity closes a little more," says Benjamin-Alvarado. Once Cuba gets to the platform stage of deep-water drilling, he says, "the Americans are going to be left out."