Energy Tribune

Cuba’s Energy Revolution, Revolution, Revolution…

July 1, 2008

The revolution lives in Cuba. And it’s not just the revolution started by Fidel Castro four decades ago. It’s an energy revolution. Got that? It’s a revolution.

On Tuesday morning during a “ministerial session” at the World Petroleum Congress, that point was made. And then repeated. And repeated. And repeated. And repeated one more time. These sessions, which give energy ministers an opportunity to pitch their countries to foreign investors, are usually well-rehearsed and get straight to the point. Top government officials quickly identify their most attractive lease blocks, give details on their country’s investment terms, and then ask for questions.

Not the Cubans. The hour-long session began with Yadira Garcia Vera, the director of the Ministry of Basic Industries, delivering (in Spanish) the outlines of Cuba’s energy landscape, which included her declaration that the country is undergoing — what else? “an energy revolution.”Her remarks were then translated into English for the 30 or 40 people in attendance. Garcia made it clear that while her country wanted to become self-sufficient in oil, energy efficiency was a top priority. This part of the “revolution” she explained, meant the systematic replacement of incandescent light bulbs with compact fluorescents, as well as the exchange of older domestic appliances, refrigerators, televisions, fans, and other electricity-consuming goods, for new, more efficient models. She also gave details on the country’s plans to shutter its old electric power plants and replace them with smaller, more efficient power plants, all of which would be interconnected.

Garcia then gave a rundown of Cuba’s upstream sector, explaining that the investment rules were changed in 1991 in order to allow foreign investment. She also explained that Cuba has leased 24 offshore blocks in its offshore exclusive economic zone and that there were high hopes for a big oil find in that region. After a few more mentions of the energy revolution, she explained that visitors were then going to be treated to a 20 minute-long DVD presentation. The title of the video: “The Energy Revolution in Cuba.”

What followed was a near-word-for-word rehash the information that Garcia had just delivered. Thus, we were reminded that Cuba planned to replace its older power plants. That it had big hopes for its offshore oil industry; that the foreign investment laws were passed in 1991; that 24 offshore blocks had been leased; and that there was lots of potential for a major oil find in the exclusive economic zone. The highlight of the DVD was the segment that focused on energy efficiency. Cuba’s “energy revolution” was being led by ordinary Cubans who were, believe it or not, replacing their incandescent light bulbs with compact fluorescents. One segment showed old refrigerators being replaced with newer ones. Another showed a Cuban boy switching off a light bulb.

The thrills continued with shots of the lead energy revolutionaries themselves. The obligatory footage included images of a fiery Fidel Castro from the 1960s. Shortly after that, came images of the current-day Castro, looking frail and pale. And immediately after that, came Fidel’s pal, Venezuelan president Hugo ChÃvez. First came footage of Fidel with ChÃvez. Then ChÃvez by himself. ChÃvez in a red shirt. ChÃvez in a suit. ChÃvez with Fidel again. Then ChÃvez with some unnamed African leaders.

After the parade of revolutionaries, came a declaration that Cuba was working to have “rational use of energy and that it wanted to limit the electricity consumption of its people. This plan has the total support of the leadership of our country. And with that line came the one and only shot of Fidel’s brother, and the new leader of Cuba, Raul Castro.

Finally, with just about 15 minutes left in the hour-long slot allotted to the Cubans, Rafael Tenreyo Perez, the exploration manager for CubaPetroleo, was finally allowed to deliver the goods. He explained the production sharing agreements that Cuba has signed with foreign companies and projected a map (in Power Point) that gave a more detailed look at the offshore blocks that Cuba is hoping to lease.

Fortunately, Tenreyo did not mention the you-know-what. But he did claim that given the exclusive zones proximity to other oil provinces in the Gulf of Mexico, It is possible to discover big and even giant oil fields in Cuban waters. And that’s clearly what the Cubans are hoping for.

The only news that was committed during the ministerial session came after the formal session was over. That’s when Tenreyo told the handful of reporters in attendance that the first offshore well in the exclusive zone could be drilled within the next 12 months. Several companies are active in the zone, but Tenreyo said that the first company to drill will likely be one of the companies who have rights to blocks. That means Malaysia’s Petronas, Spain’s Repsol YPF, or India’s ONGC.

The energy revolution will not be televised. But for Cuba, it may just begin offshore.