"Cuba and none of the present partners have that (depth) capability without accessing American technology, and therein lies the rub," he said. "U.S. export controls forbid them to transfer that technology to Cuba."
Cuba, looking past the United States, has been in talks with Brazil's Petrobras, which has much deepwater expertise, about getting involved.
The embargo has withstood repeated legislative attempts to water it down, including unsuccessful bills in the U.S. Congress in 2006 to exempt oil companies.
But embargo foe Kirby Jones, a consultant on Cuba business and founder of the U.S.-Cuba Trade Association in Washington, said a big Cuba oil find changes the political equation.
"This is the first time that maintaining the embargo actually costs the United States something," he said. "And we need oil. We need it from wherever we can get it, and in this case it's 50 miles (80 km) off our coast," he said.
CLOSE TO U.S.
An odd fact is that Cuba will be drilling 50 miles from the Florida Keys, or more than twice as close as U.S. companies can get due to regulations protecting Florida's coast.
U.S. Rep. Jeff Flake, an Arizona Republican who has introduced bills to lift the embargo for oil companies, said the environmental argument may be key because there is much concern in Florida about potential oil spills.
"If there are going to be oil rigs off of Florida, I think most Americans would be more comfortable if they were U.S. oil rigs, rather than Chinese for example," Flake said.
He said U.S. companies are definitely interested in Cuba, but have not publicly pushed for embargo change. In interviews, industry executives emphasized they did not oppose the embargo because it is U.S. national policy and were pushing instead for access to U.S. areas that are currently prohibited, such as offshore western Florida.
"When U.S. companies are not even allowed to drill in the eastern half of the Gulf of Mexico, we have a long way to go before we can think about international waters off the coast of Cuba," said Larry Nichols, chairman of Houston-based Devon Energy.
Cuba has said it would welcome U.S. companies to their offshore field and showed its interest by sending Cubapetroleo representatives to a 2006 conference in Mexico City with companies including oil giant Exxon Mobil and top U.S. refiner Valero Corp.
The conference became the Centre of international controversy when the Sheraton Hotel kicked out the Cuban representatives after the Bush administration told the U.S.-based hotel chain it was violating the embargo by having paying Cuban guests.
The incident may have convinced the oil industry to lie low on Cuban oil.
"Nobody wants to rankle the Bush administration and get them in a tizzy about what may occur," said Benjamin-Alvarado.
The political landscape for the embargo already has changed with Raul Castro taking over in February as Cuba's president, succeeding his ailing brother, Fidel, Flake said.
Raul Castro has made small openings in Cuba's state-run economy, but perhaps more importantly he is not the anti-American firebrand and lightning rod his brother was for 49 years.
