Cuban Dream

For 58 years Cuba has been suspected of harboring a great oil reservoir. Last week, with no less than five major companies holding extensive concessions on the island, it finally looked as though the suspect would have to stand trial. Prodded by a three-month-old act of Cuban Strongman Batista's docile legislature, a subsidiary of the Atlantic Refining Co. spurred its crews of U. S. geologists and drillers engaged in a thorough investigation of vast concessions. Close on their heels were Sinclair Cuba Oil Co. and Royal Dutch Co. operatives.

Suspicion of Cuban reserves dates back to an 1880 incident involving an unfortunate Chinese. Digging a water well in Motembo for his master, he presumably stopped for a smoke, at any rate was blown to bits. Promptly forming a company, his master drilled three 900-foot holes on the site, brought in Cuba's first gushers, each producing distillate. Geologists thought this shallow production came from a deeper and much larger reservoir, but drilling equipment was inadequate and nothing further was done about it.

Thirty-eight years later the search for oil was renewed in earnest. The War had ended, leaving Europe's battle-torn fields producing only a third of their pre-War yield of beet-sugar. On the New York Coffee and Sugar Exchange, Cuban cane-sugar soared from 6 to 22 1/2-c- per pound.

Foreign and domestic capital poured in and sugar operations mushroomed to enormous proportions--80% of Cuba's entire industry. Sugar refineries, steaming night and day, burned anything they could lay their hands on, even green trees. Cuba's legislature passed a law allowing crude oil destined for the sugar industry to come in duty free, but the demand for fuel was insatiable and oil companies began to look into the old possibility of a big native supply from which pipe lines could be run directly to the refineries.

All Cuba was footing a dance to sugar millions. Jewels, silks, perfumes, palaces, race horses and solid gold plate were the order of the day. Oil companies, in step with sugar, leased thousands of acres for exploration. In May 1920, when the dance was maddest, people suddenly began to talk of Europe's next sugar-beet crop. By December the crop was a reality--nearly 50% larger than the year before. Cuba's boom was over; private fortunes went down the spout with the island's banking system; the dream of large-scale oil production faded and concessions remained virtually unexplored.

Now, 18 years later, the possibility of Cuba's harboring a great oil reservoir is again under investigation. Geologists are examining cores from thousands of feet below the surface; radio seismograph crews are sounding in Cuba's hills. Designed to bolster the island's limited revenues, the new petroleum law passed by the legislature all but forces activity on concessions by requiring each concessionaire to drill within five years at least one well to 4,000 feet unless oil is struck at lesser depth; the alternative to such exploitation is Government confiscation.

Only present production in Cuba is from small shallow wells at Bacuranao, Guanabacoa and Corralillo. Last year total Cuban output of crude oil was 8,193 bbl.

In the case of small independents and wildcatters, their offices often in their hats, the prospect of drilling and completing a 4,000-foot well, at an estimated cost of $50,000, seems decidedly remote. But to major companies with ample money and equipment, this is no great hardship. By last week, although none would admit as much--or much of anything--these companies looked like the major entrants in the forthcoming race for Cuba's oil: Atlantic Refining's subsidiary, with slightly under 740,000 acres in all provinces except Oriente; Cia Petrolera La Estrella de Cuba, subsidiary of Royal Dutch Co., with 44,460 acres in Havana and Matanzas provinces; Union Oil of Cuba, and Sinclair Cuba Oil Co. with increasing acreage spotted throughout the island. If any of these companies strike deep production-- long suspected in Cuba's lower Cretaceous (Chalk) region--it may set off a boom as loud as the sugar spree, or as wild as the first days of the East Texas field when land worth ten dollars one day was worth a thousand the next.

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