Since the demise of the Soviet Union forced Cuba to crack open its doors to outside investment, oil exploration and nickel mining have emerged as lucrative ventures for foreign investors.
Cuba and its foreign partners are producing roughly 68,000 barrels of oil a day, up from 18,000 a day in 1992, according to Jorge Piñon Cervera, an energy expert at the Institute for Cuban and Cuban-American Studies at the University of Miami.
Cuba still imports most of its oil and refined products -- about 100,000 barrels daily -- primarily from Venezuela on favorable terms. But it's boosting efforts to produce more at home.
In recent years, Cuba has been auctioning blocks off its north coast to foreign firms such as Spanish giant Repsol YPF and Toronto-based Sherritt International for oil and gas exploration in joint ventures with the government.
Sign Up and Save
Get six months of free digital access to the Miami Herald
CLOSE TO HOME
Some of those exploration blocs are just 50 miles from Florida and closer to the state's shoreline than the U.S. government permits for domestic drilling. But under a 1977 treaty with the United States, the area is part of Cuba's exclusive economic zone and drilling is allowed.
In 2004, Repsol disclosed its first oil strike -- quality grade light crude -- some 18 miles off Havana, but said the well wasn't commercially viable. Repsol teamed up with Norsk Hydro of Norway and India's Oil and Natural Gas Corp. and is forging ahead on exploring other sites.
The potential is huge. The U.S. Geological Survey estimates reserves of 4.6 billion barrels of oil and 9.8 trillion cubic feet of natural gas off Cuba's north shore -- a veritable bonanza -- though the estimate is debatable and the offshore sites would be difficult and expensive to exploit.
But if major deposits are discovered, it would intensify pressure on Washington to rethink the embargo, at least on energy.
Cuba watchers aren't holding their breath for change during the Bush administration -- even if Fidel Castro dies.
And since exploration is a long-term affair, "I don't think there will be a sense of urgency among U.S. oil companies to get into Cuba, " says Piñon.
Last year, Congress talked about exempting U.S. energy companies from the embargo, a proposal pushed by the American Petroleum Institute, but the effort fizzled.
Cuba's biggest foreign player is Sherritt, which arrived in Cuba in the mid-1990s. The company says it is producing about 30,000 barrels of oil a day with partner Pebercan of Montreal. Sherritt also has nickel and cobalt mining operations and electricity generating facilities in Cuba.
"You have to build value and be seen as a partner that can move forward, bringing technology to the table and training, " says Sherritt spokesman Michael Minnes.
Nickel was again Cuba's top export last year, as keen global demand for the metal, used in steel making, has driven up prices. Sherritt plans over time to boost its nickel capacity at Moa to about 49,000 tons a year from 33,000 tons.
To be sure, doing business in Cuba is an ordeal for oil companies. Pebercan, for example, announced last month that Cubapetróleo was two months late on some $69 million in oil payments -- $37 million owed to Pebercan and the rest to Sherritt.
Patrice Bedu, vice president of exploration for Pebercan, which finances operations from cash flow because bank loans are hard to find, says "We are negotiating with the Cuban government to fix the problem." But he adds: "We maintain good relations with the government. It's a temporary issue, we're sure."