Slow going

What do sugar and ethanol, golf course development, and deep-water oil exploration have in common?

They are all on the list of possible foreign investment projects in Cuba, and they are all slow to develop.

I have commented before that when it comes to golf course/real estate projects, the announcement-to-action ratio is off the charts; see here, here, and here.

Sugar projects are slow too. The reason may be that even though Cuban government policy is to encourage foreign investment generally, and not to exclude ethanol development, Fidel Castro has voiced reservations about using food crops to produce fuel. So I speculate that that is the reason for the slow going. At any rate, last week there was yet another statement, this one from the sugar minister, about Cuba’s openness to foreign investment in the sugar sector.

When it comes to offshore oil, it’s slow going too. Cuba made news last week by announcing estimates of its offshore reserves that are double those of the U.S. Geological Survey. But a manager of Cuba’s state oil company also announced that the much anticipated drilling by Repsol will take place in mid-2009 – fully five years after its exploratory well was drilled – and that Canada’s Sherritt has relinquished rights to two offshore blocs rather than proceed to the drilling phase. In Repsol’s case – where the formation of a consortium with Norsk Hydro is a positive sign – the reason for the delay may be simply that higher oil prices have made deep-water rigs scarce.