UPI on Cuba's Oil Refinery Upgraded with Venezuelan Help

MIAMI (UPI) -- A Soviet-era oil refinery in Cuba is getting back online
with the help of the communist island's close regional ally and
petroleum benefactor, Venezuela.

Later this week Venezuelan President Hugo Chavez is scheduled to arrive
in Cuba for the grand reopening of the Camilo Cienfuegos refinery, a
relic of the former Soviet Union's sway over Cuba until its demise in
the late 1980s.

The refinery has been dormant since then, though with the help of
Venezuela and some $136 million in repairs funded by Caracas, the plant
is expected to go online Friday, according to Cuban state media.

The plant will re****tedly be able to process some 65,000 barrels a day.
Venezuela meanwhile sends about 100,000 bpd to Cuba as a discounted
price, part of Chavez's Petrocaribe agreement for Caribbean nations.

Cuban officials have lauded the return of operations at Camilo
Cienfuegos, though some speculate that the plant may still need more
work before becoming fully operational because of its longtime dormancy.

"It was a mess, that refinery," said Larry Birns, director of the
Council on Hemispheric Affairs in Wa****ngton and noted expert on Cuba.

Chavez is an ardent sup****ter of improving Cuba's oil-producing
capacity in light of much international speculation about the island's
potential offshore petroleum reserves.

So far, five international oil companies have paid reserve fees to the
Cuban government to secure exploration rights there.

Last year, during the Non-Aligned Movement Summit in Havana, the
leftist Chavez said that Cuba's potentially lucrative offshore oil
reserves could one day catapult the island onto the world petroleum
stage and maybe even earn the country a place in the Organization of
Petroleum Ex****ting Countries.

"Fidel is headed for OPEC," said Chavez jokingly during the meeting
drawing representatives from 118 countries and more than 50 world
leaders. "He is finding oil."

Though it seems unlikely that Cuba would be invited into OPEC based
solely on speculation about what might reside beneath its ocean floors,
there are indications that its offshore deposits are the world's next
great untapped source of oil.

According to the U.S. Geological Survey, some 4.6 billion barrels of
crude oil and 9.8 trillion cubic feet of natural gas may well be
lurking below the ocean floor of the Northern Cuban basin. The reserves
are said to possibly rival the estimated reserves in Alaska's Arctic
National Wildlife Refuge.

That kind of crude would more than meet Cuba's daily oil intake --
about 205,000 bpd -- and provide enough excess to transform the country
from being dependent on Chavez's largesse to a global player on the oil
market.

Several nations are already banking on Cuba's oil potential. China has
invested an estimated $1 billion in Cuba with the intention of
exploring its offshore deposits. Last week India's state-run oil
company penned a deal with Cuba to explore off shore as well.

Some analysts are skeptical about the hype surrounding the supposed
untapped oil wealth that could springboard Cuba from impoverished
communist state to self-sufficiency and financial windfall.

"It's been a big smoke screen for a long time ... the Soviets used to
say there were large deposits off the shores of Cuba, though it hasn't
been proven," Maurcio Claver-Carone, a member of the U.S.-Cuba
Democracy Political Action Committee, told UPI.

Claver-Carone also contends that Castro used the basin as a means of
promoting foreign investment in Cubapetroleo, Cuba's state-owned oil
company.

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