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Tuesday, July 7, 2009

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Deveaux confirms Cuban oil negotiations By VERNON CLEMENT JONES ~ Guardian Business Editor ~ vernon@nasguard.com: The energy minister is now confirming The Bahamas is in negotiations with Cuba, among others, over disputed ocean territory — the fate of millions of dollars in oil drilling royalties hinging on that outcome. Negotiations are with "Cuba, The United Kingdom (Turks and Caicos) and The United States," Earl Deveaux told Guardian Business Wednesday. The comments come the same week as a Guardian Business report voicing the concerns of a University of Miami energy fellow and former Amoco Corp. president. Jorge Piñón suggests Cuba may now be moving to drill in the same Sal Cay Bank area The Bahamas lays claim to. "Developments certainly should be monitored," he told Guardian Business Wednesday. It's an "interesting possibility that Cuba's North Belt Thrust (a potential area for drilling) could extend into The Bahamas' (Exclusive Economic Zone)." He points directly to Cay Sal Bank as the area of vulnerability. It's an uninhabited area of 100 small islands between Andros and Cuba. It's also very close to where both Cuban and Bahamian research indicates significant oil reserves lie just beneath the ocean's floor. This country is looking to lease that same area to exploration company BPC, although its own efforts are very much lagging behind Cuba's. Piñón's caution comes as Cuba now readies itself for oil exploration, having leased offshore drilling rights for its northwest shores. While the country itself is without the technological wherewithal for deep-water drilling, it has signed leases with China as well as companies from Spain and Canada. It's an issue heating up for The Bahamas, given any findings from Cuban explorations near the disputed area has real implications for relations between the two nations as well as for their respective coffers. Deveaux isn't offering details on where exactly negotiations now stand. Earlier this week, he reiterated that government had also received proposals for oil drilling, but added that no further leases would be granted until existing territorial disputes are resolved. It's a matter that has everything to do with this nation's EEZ, which represents the area of sea the country has special rights over as it pertains to exploration and the use of marine resources. "There is a current moratorium until the boundaries are clearly agreed," said the minister, making no specific mention of Cuba. "The problem arises when there are conflicts in national boundaries or other unresolved issues." His statement follows the May joint venture announcement from license holders BPC Limited and new partner StatoilHydro. Together they are seeking to explore oil possibilities in The Bahamas. That hinges entirely on winning government OK to explore previously untouched waters. The recession and its negative effect on oil prices may have bought The Bahamas some time to deal with any competing claims for the Sal Cay area as the call for offshore drilling abates. Friday, June 26, 2009