Cuba Scraps 1930s Oil Laws to Lure Foreign Drillers Amid Crisis
(MENAFN) Cuba on Monday overturned oil legislation dating back to 1938 and 1959, opening the door to foreign investment in hydrocarbon exploration and production as its energy crisis deepens, according to the country’s Official Gazette.
The new rules replace the old laws and bring the legal framework for oil and gas development in line with Cuba’s current constitutional, economic and technological conditions, local media reported.
The overhaul comes through Decree-Law 135/2026 and Decree 184/2026. Together, they revise the rules covering exploration, extraction, refining, transportation, storage and sale of oil and natural gas.
Foreign partners stand to gain longer contract horizons. Production-sharing contracts can now run up to 40 years, with extensions of 10 years possible. Oil concessions can last up to 30 years and be renewed for another decade. The legislation also allows oil services contracts with specialized companies.
Havana is keeping tight control, however. The state retains ownership of all oil and gas deposits, can reject permits on national security grounds and can put domestic energy needs first when allocating production.
The rules also cap cost recovery under production-sharing agreements, set concession fees and royalties, and add safeguards against tax evasion and profit transfers abroad through inflated costs or deals between related companies. Operators must meet environmental and safety requirements and can be held liable for damage caused by hydrocarbon activities.
The reform arrives as Cuba struggles with fuel shortages and prolonged power outages. The government aims to draw international participation into the sector while keeping strategic energy resources under state control.
The new rules replace the old laws and bring the legal framework for oil and gas development in line with Cuba’s current constitutional, economic and technological conditions, local media reported.
The overhaul comes through Decree-Law 135/2026 and Decree 184/2026. Together, they revise the rules covering exploration, extraction, refining, transportation, storage and sale of oil and natural gas.
Foreign partners stand to gain longer contract horizons. Production-sharing contracts can now run up to 40 years, with extensions of 10 years possible. Oil concessions can last up to 30 years and be renewed for another decade. The legislation also allows oil services contracts with specialized companies.
Havana is keeping tight control, however. The state retains ownership of all oil and gas deposits, can reject permits on national security grounds and can put domestic energy needs first when allocating production.
The rules also cap cost recovery under production-sharing agreements, set concession fees and royalties, and add safeguards against tax evasion and profit transfers abroad through inflated costs or deals between related companies. Operators must meet environmental and safety requirements and can be held liable for damage caused by hydrocarbon activities.
The reform arrives as Cuba struggles with fuel shortages and prolonged power outages. The government aims to draw international participation into the sector while keeping strategic energy resources under state control.
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