Development of vast tracts of oil in Cuban-controlled waters awaits a green light from the White House, and the go signal may be just a few years away. By Jim Ostroff, Associate Editor November 19, 2009 America’s long-term energy supplies could get a significant boost from Cuba. That’s right -- Cuba.The island nation controls an offshore bonanza of up to 20 billion barrels of crude oil just inside its territorial waters, barely 60 miles off the coast of Florida. The U.S. embargo against Cuba will keep anyone from getting to the oil in the Florida Straits in the near term. But it’s only a matter of time before the strings are untied. Already, oil firms such as Brazil’s Petrobras, Spain’s Repsol-YPF, Russia’s Zarubezhneft and others from Canada, Malaysia and Norway have bought leases in the area, but bringing up oil would require U.S. know-how and equipment that’s now banned. Sponsored Content American energy companies have a virtual lock on the technologies needed to engage in ultra-deep sea drilling, oil recovery and ocean rig-platform building, and routinely partner with foreign oil companies around the world. Advertisement All the interested parties are willing to wait for a thaw in U.S.-Cuban relations. “U.S. oil companies know they’re prohibited from selling (sophisticated) oil drilling technology to intermediaries doing business with Cuba” and would incur huge fines for violations, says Jonathan Benjamin-Alvarado, an associate professor of political science at the University of Nebraska, Omaha. And foreign firms know that doing an end-run around the embargo would get them blacklisted by the U.S. from participating in lucrative oil production projects in the Gulf of Mexico. The best guess is that in two to five years, the U.S. will issue special licenses to U.S. firms to participate in Cuban offshore drilling, much as Obama issued licenses that enable firms to sell cell phones and telecommunications equipment to Cuba. Taking that route is far less controversial than tinkering with the embargo. Production from Cuban wells of around 2 million barrels a day would help to offset the continuing decline in production from existing U.S. oil fields. Domestic production topped out at 8 million barrels daily in the early 1970s and is around 5.4 million barrels today, including output from Alaska’s now-declining giant North Slope oil fields. U.S. refiners are also crafting long-term plans to build fuel refineries in Cuba. Such installations would help to meet Americans’ motor fuel needs, replacing some of the domestic output likely to be curtailed by carbon dioxide emissions constraints that would make it tough to expand facilities in the U.S. Of course, building refineries in Cuba would require a change in Havana’s ban on foreign ownership and likely, a change in the government, too, an unlikely prospect in the near term. For weekly updates on topics to improve your business decisionmaking, click here.