Cuba’s Offshore Oil Development: Background and U.S. Policy Considerations

Neelesh Nerurkar
Specialist in Energy Policy

Mark P. Sullivan
Specialist in Latin American Affairs

Cuba is moving toward development of its offshore oil resources. While the country has proven oil reserves of just 0.1 billion barrels, the U.S. Geological Survey estimates that offshore reserves in the North Cuba Basin could contain an additional 4.6 billion barrels of undiscovered technically recoverable crude oil. The Spanish oil company Repsol, in a consortium with Norway’s Statoil and India’s Oil and Natural Gas Corporation, is expected to begin offshore exploratory drilling in early 2012, and several other companies are considering such drilling. At present, Cuba has six offshore projects with foreign oil companies. If oil is found, some experts estimate that it would take at least three to five years before production would begin.

In the aftermath of the Deepwater Horizon oil spill, some Members of Congress and others have expressed concern about Cuba’s development of its deepwater petroleum reserves so close to the United States. They are concerned about oil spill risks and about the status of preparedness and coordination in the event of an oil spill. Dealing with these challenges is made more difficult because of the long-standing poor state of relations between Cuba and the United States. If an oil spill did occur in the waters northwest of Cuba, currents in the Florida Straits could carry the oil to U.S. waters and coastal areas in Florida, although a number of factors would determine the potential environmental impact. If significant amounts of oil did reach U.S. waters, marine and coastal resources in southern Florida could be at risk.

The Obama Administration has been making efforts to prepare for a potential oil spill in Cuban waters that could affect the United States. This has included: updating oil spill area contingency plans covering Florida and developing a broader offshore drilling response plan; engaging with Repsol over its oil spill response plans (including plans to inspect the oil rig that Repsol will use); and licensing U.S. companies to provide personnel and export equipment needed for oil spill preparedness and response. Some energy and policy analysts have called for the Administration to ease regulatory restrictions on the transfer of U.S. equipment and personnel to Cuba for oil spill preparedness and response. Some have also called for direct U.S.-Cuban government cooperation to minimize potential oil spill damage, looking at U.S. cooperation with Mexico as a potential model as well as information sharing and cooperation through multilateral channels under the auspices of the International Maritime Organization. In contrast, some policy groups call for the United States to focus on preventing Cuba from engaging in offshore oil exploration altogether.

In the 112th Congress, five legislative initiatives have been introduced taking varying approaches toward Cuba’s offshore oil development, and there have been two oversight hearings. H.R. 372 would authorize the Secretary of the Interior to deny oil leases and permits to those companies that engage in activities with the government of any foreign country subject to any U.S. government sanction or embargo. S. 405, among its provisions, would require the development of oil spill response plans for nondomestic oil spills in the Gulf of Mexico, including recommendations for a joint contingency plan with Mexico, Cuba, and the Bahamas. H.R. 2047 would impose visa restrictions on foreign nationals and economic sanctions on companies that help facilitate the development of Cuba’s offshore petroleum resources. S. 1836 and H.R. 3393 would provide that foreign offshore oil developers would be liable for damages from oil spills that enter U.S. waters. For additional information on Cuba, see CRS Report R41617, Cuba: Issues for the 112th Congress.


Date of Report: November 28, 2011
Number of Pages: 24
Order Number: R41522
Price: $29.95

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Latin America and the Caribbean: Fact Sheet on Leaders and Elections

Julissa Gomez-Granger
Information Research Specialist

Mark P. Sullivan
Specialist in Latin American Affairs

This fact sheet tracks the current heads of government in Central and South America, Mexico, and the Caribbean. It provides the dates of the last and next elections for the head of government and the national independence date for each country


Date of Report: December 2, 2011
Number of Pages: 6
Order Number: 98-684
Price: $19.95

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Brazil-U.S. Relations

Peter J. Meyer
Analyst in Latin American Affairs

As its economy has grown to be the seventh largest in the world, Brazil has consolidated its power in South America, extended its influence to the broader region, and become increasingly prominent on the world stage. The Obama Administration’s national security strategy regards Brazil as an emerging center of influence, whose leadership it welcomes “to pursue progress on bilateral, hemispheric, and global issues.” In recent years, U.S.-Brazil relations have generally been positive despite Brazil’s prioritization of strengthening relations with neighboring countries and expanding ties with nontraditional partners in the “developing South.” Although some disagreements have emerged, Brazil and the United States continue to engage on a number of issues, including counternarcotics, counterterrorism, energy security, trade, human rights, and the environment.

Dilma Rousseff of the ruling center-left Workers’ Party was inaugurated to a four-year presidential term on January 1, 2011. She is Brazil’s first female president. Rousseff inherits a country that has benefited from what many analysts consider 16 years of stable and capable governance under Presidents Cardoso (1995-2002) and Lula (2003-2010). She has pledged to build on her predecessors’ accomplishments by maintaining strong economic growth and fostering greater social inclusion. Rousseff’s 10-party electoral coalition holds significant majorities in both houses of Brazil’s legislature; however, keeping the unwieldy coalition together to advance her policy agenda has already proven challenging. Although her Administration has had to deal with a number of corruption scandals, Rousseff remains popular among the general population. In September 2011, 71% of Brazilians approved of her performance in office.

With a gross national income (GNI) of $1.83 trillion, Brazil is the largest economy in Latin America. Over the past eight years, the country has enjoyed average annual growth of over 4%. This growth has been driven by a boom in international demand for its commodity exports and the increased purchasing power of Brazil’s fast-growing middle class. The country has also benefitted from a series of policy reforms implemented over the course of two decades that reduced inflation, established stability, and fostered growth. These policies have enabled Brazil to better absorb international shocks like the recent global financial crisis, from which Brazil emerged relatively unscathed. After strong growth in 2010, however, the Brazilian economy has begun to slow. While the country has the resources necessary to weather another potential downturn in the global economy in the near-term, several constraints on mid- and long-term economic growth remain.

The 112th Congress has maintained interest in U.S.-Brazil relations. Several pieces of legislation have been introduced, including bills that would suspend foreign assistance to Brazil (H.R. 2246) and the issuance of visas to Brazilian nationals (H.R. 2556) until the country amends its constitution to allow for the extradition of its citizens, and bills (H.R. 3039 and S. 1653) designed to accelerate visa processing for citizens of Brazil and other countries. Additionally, the House initially adopted a provision (H.Amdt. 454), which was dropped from the final legislation (H.R. 2112), that would have prevented the United States from providing payments to the Brazil Cotton Institute as it agreed to do to temporarily resolve a World Trade Organization dispute with Brazil.

This report analyzes Brazil’s political, economic, and social conditions, and how those conditions affect its role in the world and its relationship with the United States.


Date of Report: November 22, 2011
Number of Pages: 35
Order Number: RL33456
Price: $29.95

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Chile: Political and Economic Conditions and U.S. Relations

Peter J. Meyer
Analyst in Latin American Affairs

Since its transition back to democracy in 1990, Chile has consistently maintained friendly relations with the United States. Serving as a reliable but independent ally, Chile has worked with the United States to advance democracy, human rights, and trade in the Western Hemisphere. Chile and the United States also maintain strong bilateral commercial ties. Total trade has nearly tripled to over $17.9 billion since the implementation of a free trade agreement in 2004, and the countries signed an income tax treaty designed to boost private sector investment in February 2010. Additional areas of cooperation between the United States and Chile include investigating dictatorship-era human rights abuses, promoting clean energy technologies, and supporting regional security and stability.

Sebastián Piñera of the center-right “Coalition for Change” was inaugurated to a four-year presidential term in March 2010. Piñera’s electoral victory was the first for the Chilean right since 1958, and brought an end to 20 years of governance by a center-left coalition of parties known as the Concertación. Since taking office, Piñera has largely maintained the open economic policies and moderate social welfare policies of his Concertación predecessors while proposing reforms designed to boost economic growth and reduce poverty. He has struggled to implement his legislative agenda, however, as his political coalition lacks majorities in both houses of the Chilean Congress. Piñera has also struggled to deal with a series of large-scale protests and strikes over issues ranging from indigenous policy to the education system. The Chilean populace has resorted to such tactics to demonstrate its increasing dissatisfaction with the country’s political system, which it views as unresponsive to citizen demands. As the generalized sense of discontent has spread, Piñera’s approval rating has steadily declined—reaching 31% in October 2011. The political opposition has not benefitted from Piñera’s unpopularity, however, as public approval of the Concertación has fallen to just 14%.

With a gross national income of $170 billion and a per capita income of $9,950, Chile is classified by the World Bank as an upper-middle-income developing country. Successive governments have pursued market-oriented economic policies that have contributed to the development of what many analysts consider the most competitive and fundamentally sound economy in Latin America. This solid economic framework has helped the country weather recent shocks, such as the global financial crisis and a massive February 2010 earthquake. After a 1.7% contraction in 2009, the Chilean economy grew by 5.2% in 2010 and is expected to grow by 6.5% in 2011. Strong economic growth—paired with targeted social assistance programs—has also contributed to a significant decline in the poverty rate, which fell from 38.8% in 1989 to 19.4% in 2010.

Congress has expressed interest in a number of issues in U.S.-Chilean relations in recent years. During the 111th Congress, both houses passed resolutions (S.Res. 431 and H.Res. 1144) expressing sympathy for the victims of the Chilean earthquake, and the House passed a resolution (H.Res. 1662) commending the country’s rescue of 33 trapped miners. The 112th Congress could take up issues such as the U.S.-Chile bilateral income tax treaty that was signed in 2010 and is awaiting submission to the U.S. Senate for ratification.

This report provides a brief historical background of Chile, examines recent political and economic developments, and considers current issues in U.S.-Chilean relations.


Date of Report: November 9, 2011
Number of Pages: 24
Order Number: R40126
Price: $29.95

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Latin America and the Caribbean: Fact Sheet on Leaders and Elections

Julissa Gomez-Granger
Information Research Specialist

Mark P. Sullivan
Specialist in Latin American Affairs

This fact sheet tracks the current heads of government in Central and South America, Mexico, and the Caribbean. It provides the dates of the last and next elections for the head of government and the national independence date for each country.


Date of Report: November 9, 2011
Number of Pages: 6
Order Number: 98-684
Price: $19.95

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Panama: Political and Economic Conditions and U.S. Relations

Mark P. Sullivan
Specialist in Latin American Affairs

Donald J. Marples
Section Research Manager

With five successive elected civilian governments, the Central American nation of Panama has made notable political and economic progress since the 1989 U.S. military intervention that ousted the regime of General Manuel Antonio Noriega from power. Current President Ricardo Martinelli of the center-right Democratic Change (CD) party was elected in May 2009, defeating the ruling center-left Democratic Revolutionary Party (PRD) in a landslide. Martinelli was inaugurated to a five-year term on July 1, 2009. Martinelli’s Alliance for Change coalition with the Panameñista Party (PP) also captured a majority of seats in Panama’s National Assembly. Panama’s service-based economy has been booming in recent years, largely because of the ongoing Panama Canal expansion project (slated for completion in 2014), but economic growth slowed in 2009 because of the global financial crisis and U.S. economic recession. Nevertheless, the economy rebounded in 2010, with a growth rate of 7.5%, and strong growth is continuing in 2011.

The CD’s coalition with the PP fell apart at the end of August 2011when President Martinelli sacked PP leader Juan Carlos Varela as Foreign Minister. Varela, however, retains his position as Vice President. Tensions between the CD and the PP had been growing throughout 2011, largely related to which party would head the coalition’s ticket for the 2014 presidential election. The strength of the CD has grown significantly since 2009, and it now has a slim working majority on its own in the legislature. In the aftermath of the break with the PP, President Martinelli’s approval ratings dropped by 20 percentage points to about 46%. While President Martinelli had largely retained high approval ratings in the past, some civil society groups have criticized him for taking a heavy-handed approach toward governing and for not being more consultative. Critics also contend that President Martinelli has undermined the independence of the judiciary.

The United States has close relations with Panama, stemming in large part from the extensive linkages developed when the Canal was under U.S. control and Panama hosted major U.S. military installations. The current relationship is characterized by extensive counternarcotics cooperation; support to promote Panama’s economic, political, and social development; and a bilateral free trade agreement (FTA) recently approved by Congress. U.S. bilateral assistance amounted to an estimated $3 million for FY2011, and the FY2012 request is for $2.8 million. This funding does not include additional assistance to Panama allocated under the Central America Regional Security Initiative, a successor to the Mérida Initiative in Central America that assists countries in their efforts to combat drug trafficking and organized crime.

The United States and Panama signed the bilateral FTA in June 2007, and Panama’s National Assembly approved the agreement in July 2007. After more than four years, the U.S. Congress considered and approved FTA implementing legislation, H.R. 3079, on October 12, 2011, which President Obama signed into law on October 21, 2011 (P.L. 112-43). U.S. Congressional concerns regarding the FTA had included Panama’s labor rights and tax transparency issues, but the Obama Administration had worked with Panama to resolve concerns over these issues.

For additional information, see CRS Report RL32540, The Proposed U.S.-Panama Free Trade Agreement; CRS Report R40622, Agriculture in Pending U.S. Free Trade Agreements with South Korea, Colombia, and Panama; and CRS Report R41731, Central America Regional Security Initiative: Background and Policy Issues for Congress.


Date of Report: October 25, 2011
Number of Pages:35
Order Number: RL30981
Price: $29.95

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