22OCT

Cuba offers oil fields on 30-year terms

3 min read

17:12UTC

Decree-Law 135 took force on 19 October, repealing oil laws from 1938 and 1959 and letting investors, Cuban private firms included, bid for petroleum concessions.

← Back to Cuba opens oilfields, US cuts dollar routes Jump to analysis ↓

PoliticsAssessed

Key takeaway

Cuba now offers oil concessions, but no tender has yet been called.

Cuba published Decree-Law 135/2026 on oil and gas in the Gaceta Oficial, the state gazette where Cuban laws take effect, on 12 October; it took force on 19 October⁠¹. The law repeals oil statutes from 1938 and 1959 and adds the petroleum concession to the routes open to investors. A concession runs up to 30 years, extendable by 10, and Cuba's Council of Ministers grants it, normally after an open tender.

Its regulation, Decree 184/2026, lets Cuban micro, small and medium enterprises (MSMEs), larger private companies and non-agricultural cooperatives apply, each needing Council of Ministers approval. Under Decree 184 a concessionaire's royalty bill falls by 2 per cent when its crude goes to a domestic refinery. The decree-law was signed on 3 September, the day Decree-Law 128 on foreign investment was approved, the package behind September's direct-hiring decree. It then waited 39 days for publication.

Cuban authorities put domestic output at about 40 per cent of the oil the island consumes, Agence France-Presse reported, without giving a year⁠². Pedro Abigantus, an official at the Ministry of Energy and Mines (MINEM), said, according to AFP, that the concession "may prove more attractive" for some investors than the production-sharing contracts offered since the 1990s, in which a foreign partner takes a share of the oil it finds.

Any concessionaire would work beside Unión Cuba-Petróleo (CUPET), the state oil company, which sits on Treasury's SDN list. No tender had been called by 22 October.

Deep Analysis

In plain English

Cuba has oil under its land and sea, but it pumps only part of what it uses and imports the rest. A new law, Decree-Law 135, lets companies apply for a concession: the right to look for oil and produce it in a set area for up to 30 years, plus 10 more if extended. Foreign firms can apply, and so can Cuban private businesses and cooperatives, though each needs approval from Cuba's cabinet, the Council of Ministers. The oil stays the property of the Cuban state. The company takes the risk and the cost of drilling.

Deep Analysis

Root Causes

Cuba's deposits remain the inalienable property of the socialist state under the decree-law. A concession gives the right to explore and produce, not ownership of the oil in the ground, so the state keeps control while shifting the investment risk to the concessionaire.

The production-sharing contracts offered since the 1990s made the state a partner in every well. With little cash for that share, Havana needs a model in which an outsider pays for everything up front.

The 2 per cent royalty cut for crude sent to a domestic refinery shows the aim: Cuba wants more of its own crude processed at home, to reduce the fuel it has to import past US interdiction.

What could happen next?

Opportunity
Russian or Chinese state oil firms without US exposure are the likeliest first bidders when a tender is called.
Consequence
No production can result before a tender, an award and years of exploration, so the law does not ease the current fuel shortage.

Source Landscape

This story draws on neutral-leaning sources from France

France

Primary parallel: Iran launched its Iran Petroleum Contract in 2016 to draw foreign oil firms back after sanctions relief. France's Total signed for South Pars phase 11 in July 2017 and withdrew in 2018 when the US reimposed sanctions, showing that better contract terms do not hold an investor once US banks are closed to it.

Counter-parallel: Mexico opened upstream oil to private firms in its 2013 energy reform, with no sanctions in the way. Its first auction in July 2015 still awarded only two of 14 offshore blocks, so even an open, unsanctioned regime can draw few bidders in its first round.

Immediate effect: the decree-law took force on 19 October, but no tender has been called, so no new barrel can result for years. Exploration, appraisal and development in any oil province take most of a decade before first production.

Structural effect: Article 105 prices oil, gas and derivatives on the international market reference, and Article 200.2 lets concessionaires insure with foreign insurers where Cuban insurers cannot cover the risk. Both clauses answer investors' first questions.

Neither answers the payment question: a concessionaire paid in dollars must route revenue through banks willing to touch Cuba after the Banco Exterior de Cuba designation.

Consensus view: Ricardo Torres, a Cuban economist at American University in Washington, has argued for years that Cuban reforms stall in implementation rather than in law. Decree 184 fits that pattern: a Cuban small firm may apply for a concession, but exploration at the concessionaire's own cost and risk, as Article 30 puts it, needs capital no Cuban private firm can raise on the island.

Counter-view: Zarubezhneft, the Russian state oil company that has already worked Cuban onshore fields, has no US banking exposure to lose. Analysts at the Russian Academy of Sciences' Institute of Latin America see concessions as a route for Russian and Chinese state firms, for which an SDN-listed partner carries little extra cost.

Key tension: Whether any bidder from outside Russia or China will take a 30-year concession that must operate beside Unión Cuba-Petróleo, a company on the SDN list.

First Reported In

Update #15 · Cuba opens oilfields, US cuts dollar routes

Gaceta Oficial· 22 Oct 2026

Read original →

Causes and effects

Caused by

Cuba lets foreign firms hire directly

The oil law was signed the day Decree-Law 128 on foreign investment was approved, the package behind the 4 September Decree 325.

Occurred 4 Sept 2026

Read story →

This Event

Cuba offers oil fields on 30-year terms

Havana opened its oil fields to concessions in the same weeks Washington closed the dollar routes an investor would use to pay for one.

Different Perspectives

UN General Assembly

The Assembly passed last year's resolution against the US embargo by 165 votes to 7, with 12 abstentions, and votes again on 28 October. That count is the baseline against which Havana's lobbying claims and Washington's pressure will be measured.

Mexican Navy (Secretaría de Marina)

A Mexican Navy team inspected Grace at Progreso and found fuel in its ballast tanks, according to the US Coast Guard. The account of Mexico's role comes from Washington; the Mexican government's own position on the stop is not on record in the sources reviewed.

Pedro Monreal, independent Cuban economist

Monreal says the gazette contains no rule for the exchange-house licence ADT 64 received, so nobody knows how a second firm could apply. He says a representative rate would need at least ten houses in five provinces, Havana included.

Prisoners Defenders and OCDH (Madrid-based exile monitors)

Prisoners Defenders counted a record 1,351 political prisoners at the end of September, and OCDH logged at least 344 repressive actions that month. OCDH asked the European Union on 11 September to investigate possible trafficking in Cuba's medical brigade in Italy.

Florida Attorney General James Uthmeier

Uthmeier announced a no-bond state warrant for Raúl Castro on 19 October over the 1996 Brothers to the Rescue shootdown, after reopening the state investigation last year. The four men killed flew for a Miami exile group, and the warrant restricts Castro's travel rather than reaching him in Cuba.

Cuban government (Foreign Minister Bruno Rodríguez Parrilla)

Rodríguez said on 21 October that Washington is pressing governments to abstain or leave the hall in the 28 October UN vote and called Florida's Raúl Castro warrant worthless. Havana is presenting its October oil and trade rules as openings and the US measures as an energy blockade.

Written with AI from Lowdown's published reporting. Not individually reviewed by an editor. Editorial standards.