Venezuelan President Hugo Chavez met with Cuba's interim leader, Raul Castro, earlier this week to sign new accords, among them a pledge to reopen the doors of a long-dormant, Soviet-era oil refinery.
Other oil agreements include improvements to Cuba’s oil tanker ports.
The deal augments a standing agreement between the two countries in which Venezuela sells oil to the energy- and cash-strapped Cuba at a heavily discounted price.
Potential oil reserves off the coast of Cuba have in recent years piqued the interest of both regional and global oil powers like Venezuela, the largest oil producer in South America, and China, which has sent oil rigs to Cuba.
According to the U.S. Geological Survey, some 4.6 billion barrels of crude oil may be below the ocean floor of the Northern Cuban basin. The reserves are said to possibly rival the estimated reserves in Alaska's Arctic National Wildlife Refuge.
That kind of crude would more than meet Cuba's daily oil intake -- about 205,000 barrels per day -- and provide enough surplus to transform the country from being dependent on Chavez's largesse to a global player on the oil market.
Several nations are already banking on Cuba's oil potential. China has invested an estimated $1 billion in Cuba with the intention of exploring its offshore deposits. Last week India's state-run oil company signed a deal to explore offshore as well.
Despite the hype, some remain skeptical.
Mauricio Claver-Carone, a member of the U.S.-Cuba Democracy Political Action Committee, said the potential for striking real oil riches out there is more fallacy than fact.
"It's been a big smokescreen for a long time. ... The Soviets used to say there were large deposits off the shores of Cuba, though it hasn't been proven," said Claver-Carone, who also contends that Castro is using the basin as a means of promoting foreign investment in Cubapetroleo.
"Only Cubapetroleo is allowed to drill offshore ... though foreign countries can inject billions of dollars into Cuba, which can turn around and say they have nothing (in the offshore fields)," he said.
Council of Hemispheric Affairs Director Larry Birns said, however, the continued high price of oil on the international market makes exploration and extraction of Cuban reserves “more economically desirable” than ever.
“The Cubans have always wanted to get it going again, but the cost has always been prohibitively expensive,” Birns told UPI. “But with the cost of gas as high as it is it has become more economically desirable.”
Several U.S. lawmakers have petitioned for normalized business relations with Cuba in hopes of not entering the Cuban oil race behind Venezuela and China, among them Sen. Larry Craig, R-Idaho.
Craig argues that while U.S. firms are prohibited from doing business with Fidel Castro's regime and from exploring fields off the shores of southern Florida due to environmental restrictions, Cuba is already planning its own offshore exploration and cultivating ties with China.
Cuba is only 90 miles from the United States at its closest part. An agreement brokered in 1977 splits the waters between the two nations in half. The United States does not permit drilling on its half, though Castro is reportedly eager to explore Cuban waters.
"The bottom line is that Cuba will develop its oil fields within 45 miles of our shore. We can sit by and complain, only to watch rigs go out and start extracting oil, or we get involved," Craig told UPI in June 2006.