Havana, Cuba.

WASHINGTON — As speculation surfaces of oil prospects in Cuba, officials are worried that the United States’ embargo will fall short with trade, as the island continues to attract global investments from countries such as China.

“If we insist on maintaining the embargo, other countries will benefit from that increased trade,” said Ronald Saligo, professor of economics at Rice University, through a teleconference Aug. 17 at a luncheon of the National Foreign Trade Council (NFTC). “There is a great deal of potential here. The question is whether we are going to sacrifice those for this (embargo) policy, which has not succeeded in 50 years.”

Legislation lifting the U.S. travel ban and removing sales of agricultural commodities to Cuba is still pending. Yet, recent reports from the White House indicate that the Obama administration might be willing to ease travel restrictions including granting general licenses for students, researchers and educators — a policy similar to that of the Clinton administration.

Jake Colvin, vice president Global Trade Issues of the NFTC, said they expect the House Foreign Affairs Committee either to make a decision on the travel ban by the end of this month or put it off until after midterm elections.

A group of experts from the NFTC, Center for Democracy in the Americas, Rice University and congressional staff took a four-day trip to Cuba, from July 8 to 12, to explore energy policies. At the luncheon, they summarized the urgency to invest in Cuba’s oil reserves that has deadlocked because of the embargo.

Sarah Stephens, executive director of the Center for Democracy in the Americas, took the trip. She said the U.S. should act swiftly with the embargo, particularly because Cuba has begun exploratory drilling, with her findings indicating that it’s ripe to become a major oil producer and refiner.

Stephens pointed to Repsol, a Spanish oil company that is paying an Italian firm to build an oil rig in China, which will explore oil off the shores of Cuba by next year. Lisa Margonelli, who directs the New America Foundation’s Energy Policy Initiative and who accompanied Margonelli to Cuba, agreed that if these companies are commissioning a “whole rig” it suggests there’s a fair amount of oil.

“Are we looking at lots of discrete pockets that would require one strategy or is there a big thing in there that could be producing a significant amount of oil in a ten-year time frame?” said Margonelli, while adding that although two exploratory wells have been drilled in Cuba, the amount of time to explore a whole field would be five to ten years because of mapping and production.

Although it would take time, experts at the luncheon agreed that the U.S. should keep a close watch on Cuba in its effort to improve economic engagement with the world. Saligo added that the benefits outweigh the cons.

He said Cuba would provide additional energy security, since exports in Canada and Mexico are decreasing. The island also has the potential to produce sugar cane ethanol, a renewable energy fuel that is more cost-effective and environmentally sustainable than petroleum.

Saligo said relying on trade exports from Cuba will supplement the U.S. goal to produce 36 billion gallons of ethanol by 2022 — a requirement of the Energy Dependence and Security Act signed in 2007.

Venezuela, Dubai and Brazil are investing in drilling exploratory wells in Cuba, which has also attracted attention.

The members at the luncheon are working on compiling a report of their findings in Cuba.

Raisa Camargo is a reporter with the Hispanic Link News Service.

Image: neiljs @ Flickr.

Ecuadorean President Rafael Correa.

Today in Latin America

Top Story — Ecuadorean President Rafael Correa said he will push legislation to allow the expropriation of private oil companies from Spain, Brazil, Italy and China if they refuse signing his new services-based contracts.

Correa said that everyday millions of dollars went to private oil companies when they should be going to the state.

“The oil companies are playing with us. In the coming weeks there are going to be very considerable actions. I have no regard for these companies, which have abused our country,” Correa said, according to The BBC.

Ecuador is the fifth largest oil producer in Latin America, but 56 percent of the country’s 13.4 million inhabitants live in poverty and 80 percent of the country’s indigenous population live in poverty, according to the World Bank.

Also in 2008, Correa defaulted on loan worth $3.2 billion, calling international lenders “monsters.”

“I’m out of patience. We are sending a bill to Congress that would allow for the expropriation of oil fields should the companies not want to sign the new contracts,” Correa said during a televised address on Saturday.

Just Published at the Latin America News Dispatch

• By targeting gangs, police may end up profiling immigrant communities. Alison Bowen has more on her blog, Beyond Borders.
• Lesly Kernisant of the Haitian American-led investment group SImACT discusses the challenges of bringing investment to Haiti.

Headlines from the Western Hemisphere

North America

• U.S. Customs and Border Protection agents shot at a man who tried to drive into California from Mexico after failing to present proper identification.
• According to the United Nations, Mexico has become a major supplier of sex slaves throughout the Americas.

Caribbean

• Cuban writer and journalist Carlos Franqui died in Puerto Rico at age 89. Franqui was a prominent figure in the Cuban Revolution, but left Cuba in 1963 and broke openly with the government after the Russian invasion of Czechoslovakia in 1968.
• Humberto Ríos Labrada became the first Cuban to win a Goldman Environmental Prize. He has been granted permission by both the Cuban and U.S. governments to attend the ceremony on Monday.
• Haiti’s fuel problem is affecting its electricity output.

Central America

• A 5.6 magnitude earthquake hit western Guatemala Sunday morning, about 14 miles east of the town Suchiate. No damage or injuries have been reported.
• Iranian Ambassador to Nicaragua said the country spent $1.5 million to build a hospital in Nicaragua as he refuted U.S. Secretary of State Hillary Clinton’s claim that Iran was making “disturbing” inroads in the United States’ backyard.

Andes

• China plans to lend Venezuela $20 billion and form a joint venture to pump crude oil from the an Orinoco Belt block.
• Venezuelan boxer Edwin Valero was arrested over the weekend in connection with the death of hif wife.
• Despite massive amounts of U.S. aid, Colombia continues to struggle with poverty.
• Delegates have begun to arrive in Cochabamba for Bolivia’s alternative to the U.N.’s climate change summit in Copenhagen held last year.

Southern Cone

• A Brazilian judge overturned a verdict that would postpone the construction of a new hydroelectric dam in the Amazon rainforest.
• The ocean census revealed an enormous colony of microbes off the coasts of Chile and Peru. Scientists believe they could be the direct descendants of some of the world’s earliest life forms.
• A delegation from Uruguay is headed to the Netherlands to attend a hearing on a case Argentina brought against Uruguay regarding a paper factory built on a mutual border.

Image: Presidencia de la República del Ecuador @ Flickr.

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Today in Latin America

Top Story — Russia signed a deal with Venezuela to jointly develop an oil field in the country’s Orinoco River region, according to Business Week.

Work in the Junín-6 field could begin this year and is reported to have the potential to produce 450,000 barrels of oil per day, according to Deputy Prime Minister Igor Sechin.

Russia’s National Oil Consortium would take a 40 percent share of the project, while Venezuela’s state-owned Petroleos would take the remaining 60 percent. Up to $20 billion in investments could be put into the project and if completed could see oil from the field being shipped to United States markets, Sechin said.

“After today’s agreement is ratified by the parliament of Venezuela, the consortium of Russian firms will transfer a bonus amounting to $600 million,” said Russian Prime Minister Vladimir Putin, who presided over the signing ceremony.

Headlines from the Western Hemisphere

North America

• The Mayor of Ciudad Juárez José Reyes Ferriz said there was “no logical explanation” for the massacre of 16 people, mostly teenagers, that took place in his town over the weekend.
• Paraguayan soccer player Salvador Cabañas told his father he will play in the World Cup, a week after being shot in the head in the bathroom of a Mexico City bar.

Caribbean

• Haitian Prime Minister Jean-Max Bellerive called a group of U.S. missionaries who were arrested while trying to remove 33 children from Haiti “kidnappers” who knew “what they were doing was wrong.”
• The Cuban government declared a two-month amnesty for illegal gun-owners to register them without penalty.

Central America

• Colombian President Álvaro Uribe met with newly elected Honduran president Porfirio Lobo, in the first step toward renewing ties between the countries.
• Honduras awaits the resumption of foreign aid, now that it has a new president.
• The Panama Canal’s administrator said the toll will increase for ships passing through the canal, despite complaints that it will further aggravate the shipping market crisis.

Andes

• The Peruvian government declared that five regional departments were in a state of emergency after heavy rains. More rain is expected.
• Venezuela and Russia signed a joint deal to develop an oil field in the Orinoco River region.

Southern Cone

• The Brazilian government awarded an environmental license to a controversial plan to build a hydroelectric dam in the Amazon at Belo Monte.
• Argentine president Christina Fernández de Kirchner may seek changes to the country’s central bank charter in an effort to use the bank’s reserves to create more jobs.
• Uruguay’s president-elect José Mujica wants former Argentine soccer star, current national team coach and recovering cocaine addict Diego Maradona to work on an anti-drug campaign.

Image (Wikicommons): Vladimir Putin.