New York (Platts)--21Mar2008

Nearly a month after Fidel Castro officially stepped down as Cuba's
president and his younger brother Raul was anointed his successor, the US oil
industry appears watchful of the transition, but remains hemmed in by the
46-year-old US embargo against the island state.

"There's significant interest in what may transpire and with the changes
beginning to take place," David Mica, executive director of the Florida
Petroleum Council, said Friday. It's unclear if Raul Castro will open Cuba's
economy and whether the US will ditch the embargo, he added.

"A lot of eyes are watching," Mica said. "The Florida business community
is paying very close attention to what's going on down there with regard to
drilling and lease sales," he said.

The American Petroleum Institute opposes "unilateral" US sanctions, a
spokeswoman said, though she did not directly say if the organization opposed
the US embargo against Cuba, put into place in 1962. "API does not support any
US unilateral sanctions," the spokeswoman, Cathy Landry, said in an email on
Thursday.

The US embargo excludes agricultural exports to Cuba. Asked if the API
would support an exemption allowing US oil companies to operate in Cuba,
Landry said: "API does not have any position on an exemption. All US oil
companies that are members of API comply with the law, and the law states that
US companies cannot invest in Cuba," she said.

Among US oil companies, ExxonMobil would be open to operating in any new
markets where allowed by US law, a spokesman said.

"Consistent with our long-standing global business strategy, ExxonMobil
will pursue profitable business opportunities that meet our investment
criteria as they arise in countries around the world in which we are permitted
to operate," said Len D'Eramo, manager of upstream media relations for
ExxonMobil.

"With that noted, Cuba represents a US-sanctioned country, as such we are
not permitted to operate there," D'Eramo said.

Cuban-born Jorge Pinon, an independent Florida-based energy consultant
and academic fellow at the University of Miami, said Cuba's offshore waters
appeal to US oil companies because of their proximity. The area "seems
promising geologically," Pinon said Friday. "The Gulf of Mexico is known, it's
not like going to the Arctic or the Orinoco Basin,"

A 2004 study by the US Geological Survey determined that the North Cuba
Basin holds a mean average of 4.6 billion barrels of undiscovered oil and a
mean average of 9.8 trillion cubic feet of natural gas.

--Leslie Moore Mira; leslie_moore@platts.com