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Cuba Facts is an ongoing series of succinct fact sheets on various topics, including, but not limited to, political structure, health, economy, education, nutrition, labor, business, foreign investment, and demographics, published and updated on a regular basis by the Cuba Transition Project staff.
Based on recently released 2006 crude oil and refined products production and consumption data by Cuba’s Oficina Nacional de Estadisticas (ONE), we calculate that the market value of Venezuela’s crude oil and refined products exports to Cuba amounted to over $3.3 billion. This compares with ONE’s market value of $2.2 billion for petroleum imports during the same period. By extrapolating year to date values and volumes we conservatively estimate that the market value of Venezuelan oil subsidies could well surpass the $4 billion for 2007. This clearly reflects the extent of the economic dependence by It is important to highlight that our estimate is not based on the
“contractual” cost of the volume by If reports are accurate that Not included in these crude oil cost figures are over $250 million dollars
that The following are other highlights and developments in these recently released figures. • We estimate that 2006 total Venezuelan import volumes by • North coast Cuba 2006 crude oil production amounted to 2.900 million tons (app. 50,055 bd) compared with 2.935 million tons in 2005 a decrease due to the natural decline of the Varadero oil field (discovered in 1971) and the disappointing production results of the Santa Cruz del Norte field. These figures are often reported by the Cuban press as barrels of oil equivalent (boe), a calculation that takes into account natural gas production, making the total crude oil volume much larger. Our figures above are based on only crude oil liquids production. • 16,721 barrels per day of the above production was • Cuban heavy-sour crude oil production continues to be used to fuel Cuba’s thermoelectric power plants; while lighter Venezuelan crude oil blend imports, estimated at 53,214 barrels per day, are processed as refinery feedstock. • Natural gas production increased substantially to 1,085 MMm3 from 2005 levels of 743 MMm3, reflecting a much improved recovery and processing rate by Sherritt/Cupet’s Energas joint venture. • Cuba’s aging and inefficient two oil refineries are barely running at
twenty two percent of its combined total rated capacity of 200,000 thousand
barrels per day. This underscores the importance of the re-built • Total demand for refined products and fuel crude oil dropped by 1.65% over 2005 levels, from 142,850 barrels per day in 2005 to 140,491 barrels per day in 2006. • 2006 demand for LPG (propane/butane) and Kerosene declined dramatically from 2005 levels, thirty-two and forty seven percent respectively, reflecting the implementation of the government’s substitution strategy from liquid fuels to electric powered cooking stoves. • Diesel demand increased substantially partly reflecting the introduction of thousands of diesel power generators to make up for the downtime experienced by the aging national thermoelectric power system. It is important to note that this strategy has had a substantial monetary cost increase when we compare 2006 annualized diesel prices of $180 a barrel compared with $106 per barrel for fuel oil. Conversely fuel oil demand dropped by thirty percent due to the cut back in fuel oil fired thermoelectric production. • Canadian producer Sherritt is also reported to
undertake considerable investments in processing and desalination facilities
for the future export of its Cuban equity crude oil production. All of this
in anticipation of a 2008 fuel switching strategy in the electric power and
industrial sectors as a consequence of the start-up of the In summary,
Source: 2006 Oficina Nacional de Estadisticas
de Cuba
Cuba 2006 Estimated Oil Imports &
Source: 2006 Oficina Nacional de Estadisticas de Cuba * Volume calculation based on consumption
less refinery production data. ** Market values are US Gulf Coast
waterborne refined products prices and Venezuelan crude oil landed values for
year 2006 as reported by the United States Department of Energy’s Energy Information
Administration.
_____________________________________ *Jorge R. Piñon is
a senior research associate at the University of
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33124-3010, Tel: 305-284-CUBA (2822), Fax: 305-284-4875, and by email at ctp.iccas@miami.edu. The CTP Website is
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