U.S. Calls for Caribbean Energy Partnerships

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Written by Daniel Graeber for IIR Energy Intelligence (Sugar Land, Texas)

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Summary

While both Cuba and Venezuela are under considerable pressure, the United States wants to set up energy partnerships in the region. Tensions remain high as the U.S. secretary of state addresses a Caribbean summit.

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Rubio Seeks Energy Community

U.S. Secretary of State Marco Rubio addressed delegates at the annual meeting of the Caribbean Community, or CARICOM, at a resort in St. Kitts and Nevis, a tiny island nation near Puerto Rico, calling for energy partnerships.

"Many of the countries represented here today have energy resources that I know you seek to explore responsibly, safely, but in a way that generates wealth and prosperity for your people and your countries, and we want to be your partner in that regard," he said.

Partnerships, however, may be at odds with recent U.S. ambitions in the Americas. Questions over sovereignty were raised when U.S. military forces arrested former Venezuelan President Nicolas Maduro and his wife at their compound on Caracas, and U.S. President Donald Trump later claimed tacit control over the country.

A U.S. oil blockade for Cuba, meanwhile, threatened to cause a humanitarian disaster amid chronic fuel shortages. On Wednesday, Cuban forces intercepted a U.S.-flagged speedboat thought to be trying to infiltrate the island nation, leaving several people dead.

The U.S. government later said it would allow some shipments of Venezuelan crude to Cuba.

Data from Industrial Info Resources show Cuba has four refineries, all owned and operated by the state-controlled Cuba Oil Union, or CUPET. The Camilo Cienfuegos facility is the largest, with a nameplate processing capacity of 65,000 barrels per day (BBL/d).

Subscribers to Industrial Info's Global Market Intelligence (GMI) Refining Project and Plant databases can learn more about the Cuban refineries--including capacities, investment values and necessary equipment--in this detailed list.

"Energy is critical for the future," Rubio stressed. "It's critical for every economy in order to prosper."

Energy? Regime Change? Both?

That follows Trump's strategy of leaning on domestic oil and gas reserves to solidify the country as a global energy superpower. It's already the world leader in crude oil production, natural gas production and in exports of liquefied natural gas (LNG).

"They are, for the first time in a long time, generating oil revenue that's going to the benefit of their people," Rubio said of the Venezuelans.

Reviving the oil sector in Venezuela may require a Herculean effort given the decades of mismanagement and lack of investments. Oil production peaked in the 1970s at around 3 million BBL/d. Secondary sources reported to economists at the Organization of the Petroleum Exporting Countries that production averaged 830,000 BBL/d for January.

On Thursday, meanwhile, IIR Energy sent an alert to subscribers that state-owned Petroleos de Venezuela, better known as PDVSA, delayed planned repairs at its Cardon refinery from March to July. The plant has a processing capacity of 295,000 BBL/d.

Subscribers can get a detailed look at Venezuela's oil refining sector.

Chevron is the only U.S. company with a current license to operate in Venezuela, though easing U.S. sanctions could open the door for companies with the patience for long-term investments. The Trump administration, meanwhile, has claimed that Venezuelan oil is back on the market and feeding U.S. refineries that prefer heavier slates of oil rather than the light, sweet crude found in domestic shale basins.

On Wednesday, the U.S. government reported domestic refiners took in 339,000 BBL/d in Venezuelan crude during the seven-day period ending February 20, a recent high. The four-week moving average of 179,000 BBL/d, however, is a 21% decline from year-ago levels.

By the Numbers

• 339,000 BBL/d in Venezuelan crude to U.S.
• 830,000 BBL/d in total Venezuela production in January
• 3 million BBL/d was the country's peak

Key Takeaways

• Carrying a big stick, Rubio seeks energy partners
• U.S. allows some oil shipments to Cuba
• Venezuelan refinery work delayed

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About IIR News Intelligence
IIR News Intelligence is a trusted source of news for the industrial process and energy markets, powered by Industrial Info Resources' Global Market Intelligence (GMI).

About Industrial Info Resources
Industrial Info Resources (IIR) is the leading provider of industrial market intelligence. Since 1983, IIR has provided comprehensive research, news and analysis on the industrial process, manufacturing and energy related industries. IIR's Global Market Intelligence (GMI) helps companies identify and pursue trends across multiple markets with access to real, qualified and validated plant and project opportunities. Across the world, IIR is tracking over 250,000 current and future projects worth $30.2 Trillion (USD).