• Submitted by: lena campos
• Business and Economy
• 05 / 03 / 2013

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Remember all the hype about Cuba drilling for oil in Caribbean waters and American companies missing out on the bonanza because of the U.S. embargo? Well, like all the other Cuban get-rich-quick schemes of the past 50 years, this one seems to have flopped too.

Last week, Florida's Sun Sentinel reported that "after spending nearly $700 million during a decade, energy companies from around the world have all but abandoned their search for oil in deep waters off the north coast of Cuba near Florida." Separately, CubaStandard.com reported on Friday that "the shallow-water drilling platform used by Russian oil company OAO Zarubezhneft will leave Cuban waters June 1, to be redeployed to Asia."

According to the Sun Sentinel story, Jorge Piñon, an oil-industry guru who had been cheering Cuba's exploration attempts, said "Companies are saying, 'We cannot spend any more capital on this high-risk exploration. We'd rather go to Brazil; we'd rather go to Angola; we'd rather go to other places in the world where the technological and geological challenges are less.'"

It wouldn't be the first time the dictatorship thought it had found a short cut to wealth. In 1970 it put all its faith in the "ten-million ton harvest," which promised to get the nation off Soviet dependency by forcing every Cuban to work in the cane fields. It failed.

Then there was that cow, Ubre Blanca, literally "white udder" in Spanish. She was a cross between two breeds and in 1982 Cuba claimed that she produced a world-record of 24 gallons of milk in one day. When she died, in 1985, Fidel Castro instructed Cuba's genetic scientists to get to work on making more of her. Almost 30 years later Cuban researchers were still at it. In June 2002, the Telegraph reported that "Dr Jose Morales, the head of the White Udder cloning project, is confident that a breakthrough is imminent. 'We're very close,' he said. 'We have big things coming. This project is very important to Comandante Castro.'"

Then came promises of an oil boom and last week the predictable bust. The Brazilian state-owned Petrobras PETR4.BR +1.79% had given up on deep-sea drilling in Cuban waters in 2011. Repsol REP.MC -0.53% gave up in May 2012. The deep water platform it was using was then passed to Malaysia's state-owned Petronas, which also came up empty. Venezuela's PdVSA had no luck either. In November Cuba announced that the rig that had been in use would be heading to Asia. Last week came the end of shallow-water drilling.

The loss to the regime is not just about the foreign exchange that oil implied. The threat of spills, as well as lost opportunity for American companies, were ways for Cuba to engage the U.S. and perhaps even get the embargo lifted without having to make any human-rights concessions. Some Democrats, whose party is more often found in opposition to oil exploration, tried to help. At a House subcommittee hearing in November 2011 on the matter, Rep. Ed Markey (D., Mass.) argued that "companies like Exxon Mobil, XOM +1.21% Chevron CVX +1.43% and the ConocoPhillips COP +1.37% " should be doing the "first drilling" in Cuban waters. "I would hope that the Majority's opposition to lifting the embargo against Fidel does not outweigh their fidelity to creating more jobs for American businesses and American workers in our own country."

For now Mr. Markey's dreams of helping the dictatorship are, at best, on hold. And Cuba remains a tropical backwater whose only claim to fame is its large collection of political prisoners.

Source: ONline.wsj.com