Cuba has no coal, and its hydroelectric potential is slight. Bagasse (sugarcane waste) has traditionally supplied most of the sugar industry's fuel. In 2001, Cuba's total installed capacity was 4,486,000 kW; total production in 2000 was 14,100 million kWh, of which 94.6% came from fossil fuels, less than 1% from hydropower, and the remainder from other sources. In the same year, consumption of electricity totaled 13.8 billion kWh. A 1,650-MW nuclear plant, built with Soviet assistance in Cienfuegos, was to have been operational by 1993, supplying 15% of Cuba's annual electrical output. On 6 September 1992, however, President Fidel Castro announced that work on the plant had been indefinitely stopped, since Russia was demanding hard-currency payment.
Crude oil was first produced in Cuba in 1942. The domestic petroleum industry was nationalized in July 1960, and all subsoil deposits were also nationalized; domestic and foreign holdings (mostly US) were expropriated or confiscated after foreign-owned refineries refused to process oil from Eastern Europe. Crude oil production dropped from 52,000 tons in 1959 to 10,000 tons in 1961, but had risen to 868,000 tons by 1985. As of 1991, production totaled less than 700,000 tons. As a result of energy shortages following the collapse of the Soviet Union, Cuba attempted to increase oil production in the 1990s. Production in 1999 was estimated to have increased 23% from the previous year, when it came to 31,000 barrels per day. By 2002, production totaled 49,300 barrels per day, more than double production in 1991.
In 2000 Cuba signed a five-year agreement to import crude oil and refined oil products from Venezuela, but the government eventually plans to generate enough power from its crude oil reserves to become self-sufficient in energy. In 2000 Cuba offered offshore exploration rights in its territorial waters in the Gulf of Mexico to international oil companies. Among the firms awarded contracts was Sherrit International, which announced in 2003 that it planned to invest $110 million in its Cuban oil and gas operations.
Natural gas production in 2001 amounted to 501 million cu m(17.6 billion cu ft). Proven gas reserves were estimated at 70 billion cu m (2.5 trillion cu ft) at the beginning of 2003.