l Latin American Program

The United States and Cuba:Implications of an Economic Relationship

Washington DC, May 24, 2010

Energy Security and Cooperation

Jorge R. PiñonVisiting Research Fellow

Florida International UniversityCuban Research Institute

The views express in this paper reflects strictly personal views of the author and in no way an expression of the views in his official capacity nor the views of any organization with which he is affiliated.

Jorge R. Piñon 1Energy Security and Cooperation

Hydrocarbon Timeline:

1903-1959Shell – Exxon – Texaco – SinclairAmoco – Gulf Oil1960-1991Soviet Union Sugar/Oil Barter RelationshipDiscovery of the Varadero Oil FieldCienfuegos Refinery1993-2010Foreign Oil Companies Participation PSA & Law

77Venezuela Services/Oil Barter RelationshipRefinery Expansion Program

The United States and Cuba:Implications of an Economic Relationship

Jorge R. Piñon 2Energy Security and Cooperation

Cuba’s Petroleum Balance 2008

Petroleum Demand 160,000 bd Crude Oil Production 52,000 bd Petroleum Imports 93,000 bd Natural Gas Production 20,000 boed

Forecast Market Demand 2025 315,000 bd

The United States and Cuba:Implications of an Economic Relationship

Jorge R. Piñon 3Energy Security and Cooperation

Venezuela-Cuba Oil for Services Barter Agreement Year Debt Total G&S Bartered

90days 25yrs 2006 $1,372 $ 915 $ 2,287 $ 835 2007 $1,430 $ 953 $ 2,383 $1,487 2008 $1,691 $1,691 $ 3,382 $1,355 2009E $1,510 $1,007 $ 2,517 $2,100 2010E $1,680 $1,120 $ 2,800 $3,185

Total $7,683 $5,686 $13,369 $8,962

The United States and Cuba:Implications of an Economic Relationship

Jorge R. Piñon 4Energy Security and Cooperation

The United States and Cuba:Implications of an Economic Relationship

Jorge R. Piñon 5Energy Security and Cooperation

The United States and Cuba:Implications of an Economic Relationship

Jorge R. Piñon 6Energy Security and Cooperation

The United States and Cuba:Implications of an Economic Relationship

Jorge R. Piñon 7Energy Security and Cooperation

Implications of an Economic Relationship:

2010 > U.S. Challenges and OpportunitiesUpstream oil and natural gasDownstream oil Electric Power Generation and LNGBio-fuels – Sugarcane EthanolEnvironmental Stewardship

The United States and Cuba:Implications of an Economic Relationship

Jorge R. Piñon 8Energy Security and Cooperation

United States – Cuba Energy Security & Cooperation

Develop a bilateral policy which would contribute toward Cuba’s energy independence and support a national energy policy which would embrace:

modernization of the energy infrastructurebalanced sourcing of: oil, natural gas, LNG,sugarcane ethanol and solar powerenergy conservationenvironmental stewardship

The United States and Cuba:Implications of an Economic Relationship

Jorge R. Piñon 9Energy Security and Cooperation