Which OPEC member could benefit hugely from Cuba's nascent offshore oil industry?

Venezuela.

As Cuba starts its first offshore drilling and foreign companies eye more prospects, the Latin American republic led by President Hugo Chavez may be among the biggest winners.

The reason is that after years of subsidizing the island nation of former president Fidel Castro and now his brother Raul, a Cuba that starts making money from oil might slowly wean itself off Venezuelan aid.

Cuba now refines about 50,000 barrels of oil a day, about a third of its requirements. Venezuela makes up the difference for free, said Jorge Pinon, the former president of Amoco Oil Latin America and an expert on the Cuban oil industry. Pinon now is a research fellow at the Center for International Energy and Environmental Policy at the University of Texas.

Instead of cash, Cuba pays back its Latin American neighbor by sending doctors, teachers and other skilled labor in a sort of international bartering system, Pinon said in an interview.

Cuba may have vast oil reserves, mostly offshore. The U.S. Geological Survey estimates the island has reserves equivalent to 941 million barrels of oil.

Oil-hungry China has extended a line of credit to Cuba for the purpose of expanding the country's refining capacity to 150,000 barrels a day. That expansion should be completed by 2015, Pinon said. That would be just in time, Cuban authorities hope, for the Spanish-contracted Scarabeo-9 oil rig to find and start producing oil offshore.

Repsol, Spain's biggest oil company, is using that rig to drill only 56 miles from the Florida coast. The rig itself was built in China.

An expanded and improved Soviet-era refinery in Cienfuegos on Cuba's southern coast, previously refurbished by Venezuela, is expected to enable the country to meet its domestic demand. That would immediately benefit the Chavez regime because the oil would be sent to Venezuela for sale on world markets.

With the extra revenue, Venezuela could start paying the Cuban government in cash for the skilled labor exchanges between the two countries, Pinon said.

Despite its resources, Cuba will be unable to export much of its refined or crude oil because most of the world's refineries have some form of business relationship with U.S. oil companies, Pinon explained. To maintain those working relationships, the U.S. embargo against the communist regime extends well beyond the Western Hemisphere.

On the assumption that Cuba produces more oil than it actually needs, that will become a challenge, Pinon said. He added that Cuba could likely find markets for its excess crude in Venezuela and China.

Being far away from markets, however, such trading wouldn't be economical, considering a country's oil refining infrastructure is set up in such a way that oil is designed to flow out of the country -- not back in.

In Tuesday trading the price of crude was up a nickel to $104.05 a barrel.