Cuba’s oil: due for development C uba’s internal power demand is expected to rise in the coming years in response to growth in private business, expan- sion of foreign business investment in the country, and progress and expansion in important power con- suming industries such as biotech- nology, tourism and construction. Today, Cuba generates about 95% of its internal electricity from hydro- carbons and their byproducts. Unión Cuba Petróleo (CUPET) is Cuba’s largest oil company. It is owned and operated by the Cuban government and is involved in the extraction of petroleum deposits, refning and distribution of petro- leum products (see Figure 1). For the period to 2030, CUPET has conceived several ambitious plans and projects in order to enhance its proftability and productivity, as well as to develop its oil refn- ing industry. Among these can be mentioned: • Expand the refning capacity of the oil refnery located in Cienfuegos province to 150 000 b/d • Modernise and update equip- ment and accessories operating in the refneries, mostly combustion systems, boilers, vessels, tanks, heat exchangers, wastewater treatment structures, control valves and auto- mation systems • Produce dielectric oils for 33kV electrical transformers at Sergio Soto refnery • Install sweetening units for Jet A-1 (Merox) fuel in Ñico López refnery • Introduce liquefed petroleum gas (LPG) into the national power mix • Elevate the quality of national fuels to international standards • Increase storage capacity nation- Cuba’s ambitions for energy self-suffciency require major investment in the nation’s oil reserves and refning industry AMAURY PÉREZ SÁNCHEZ University of Camagüey wide, both for crude oil and petro- leum products • Reduce/optimise the costs of logistics operations • Intensify the exploitation of oil deposits located inland and offshore • Expand the production level of existing oil deposits by means of enhanced oil recovery (EOR) technologies. Private investment To achieve sustainability in energy in the near future, the Cuban gov- ernment has incorporated new per- spectives and opportunities into its oil industry offered by recently approved foreign investment poli- cies, in order to increase effciency, reduce costs and boost production capacity. Accordingly, the main objectives of joint ventures and associations with foreign frms and companies are threefold: search- ing for unconventional oil; offshore exploration; and EOR. There are other collateral activities requiring direct capital investment such as technical services for oil extraction operations, the supply of modern, oil related technologies, equipment and resources, as well as provision of fnancial, engineering and man- agement services. The frst business contract related to oil extraction operations between the Cuban government and a foreign frm was signed in 1990, in order to exploit the oil wells located at Block III south of Varadero beach. In the last three years, around 42 shared production agreements (SPA) have been agreed between CUPET and foreign frms, in accordance with the frst Cuban Foreign Investment Law, approved in 1995, and 2014 legislation whose terms ease busi- ness transactions and increase the scope of the proposed investment objectives. In Cuba, the National Offce of Mineral Resources (NOMR) is the government institution in charge of certifying and approving potential investment projects and investors in the oil industry. Each business contract signed is protected under Cuban government decree and www.eptq.com PTQ Q1 2017 00 F M M M W W W M M M M F GG G F F F F F R R R F F F F F F F F F F F F F F W W W W W W W W W W W W W W W W W W Facilities Refineries Oil wells Gas plants Maritime terminals F M R W G Figure 1 CUPET infrastructure and facilities