In early June, Vice President Dick Cheney gave a speech to U.S.Chamber of Commerce and he told the audience that Chinese companies were drilling 60 miles off the coast of Florida. He added that the ban on E&P off the East and West coasts and Gulf Coast of Florida should be lifted. That simple statement was picked up by those in favor of oil and gas drilling and those against. For those wanting the ban being lifted, it was proof positive that the U.S. had to do something and for those against lifting the ban, it also was proof positive that the U.S. had to make sure that the ban is never lifted. Now: the facts. China is not drilling off the coast of Florida. Simple enough. Not really. Petrobras, Petrovietnam, India’s Oil and Natural Gas Corp., Repsol, Norways StatoilHydro, Malaysia’s state-run Petronas, Canada’s Sherritt International and China’s Sinopec are all in line to help cash in on Cuba's upcoming oil and gas rush. The area that will be the center of attention is known as the Deep Cuba Basin and according to some conservative estimates, it has potential reserves of 4.6 billion to 9.3 billion barrels of oil and from 9.8 trillion to 21.8 trillion cubic feet of gas depending on who gives you their estimate. Cuba has 59 leases covering 74,000 square miles of the Gulf and they put out the welcome mat for the world’ energy industry. There is no drilling and probably won't be until 2009. After that, though, all bets are off. Despite the fact, Cheney's office issued an apology, the story has taken off and developed a life of itself. The vice president said he was sorry, but the real fact is that U.S. companies will be on the sidelines watching as foreign companies will begin drilling in the Gulf of Mexico. The Cold War era embargo against U.S. companies doing business with Cuba is still in force and there's no move to lift it. Stay tuned. More to come. This story is far from over and watch it become a political issue in the upcoming presidential races. –John A. Sullivan, News Editor, Oil and Gas Investor, www.OilandGasInvestor.com, jsullivan@hartenergy.com
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