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Zarubezhneft Getting Ready for Drilling Offshore Cuba

Russia’s Zarubezhneft is getting ready to begin its oil and gas exploration campaign offshore Cuba.

Songa Mecur, the semi-submersible rig to be used for the campaign, is expected to arrive to Trinidad next week, where it will undergo preparations work before setting sail to Cuban waters.

The drilling program is expected to start in November.

Zarubezhneft in 2009 signed production sharing contracts with the communist country’s oil company Cubapetroleo for two offshore blocks located in the Cuban sector of the Gulf of Mexico. In the upcoming exploration campaign the company hopes to unlock hydrocarbons hidden in Cuba’s offshore Block L.

Cuba estimates that its offshore fields hold approximately 20 billion barrels of oil, which could, once unlocked provide a major boost to its economy.

In May this year, the Spanish oil company, Repsol, after a failed attempt to discover oil in a well offshore Cuba, decided to abandon any further offshore drilling plans in the Caribbean nation’s waters.

Earlier this week,  Cubapetróleo (Cupet) informed the local media that Catoche 1X well drilling offshore Cuba was unsuccessful. The well was drilled by a consortium established by Malaysia’s Petronas and Russia’s Gazprom. The consortium then released the Scarabeo 9 rig to Venezuela’s PDVSA which will try it’s luck at the Cabo de San Antonio 1x offshore well.

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Petronas, PDVSA Searching for Oil Offshore Cuba

Cuba’s state oil company, Cubapetróleo (Cupet) sent a statement to the country’s media saying that a company from Malaysia, a subsidiary of Petronas, had started drilling operations at the Catoche 1X well offshore Cuba.

The Malaysian company is using the Scarabeo 9, a 6th generation semi submersible drilling rig, for the operation. The Catoche 1X well was spudded on May 24. The rig had been under a contract with the Spanish oil major Repsol, who, following the disappointing results of its recent well, decided to scrap plans for further drilling off the Caribean country’s coast.

Cupet has said that Repsol’s failure to find oil doesn’t mean that the oil isn’t there and has added that the area has “a high potential for discovery of new hydrocarbon reserves, according to geological studies performed.”

Cuba estimates that its offshore fields hold approximately 20 billion barrels of oil, which could, once unlocked provide a major boost to the communist country’s economy.

Furthermore, the Cupet’s announcement says that once the drilling of Catoche 1X is completed the Scarabeo 9 will move to the Cabo de San Antonio 1x well, operated by Venezuela’s PDVSA.

Scarabeo 9, capable of operating in water depths of up to 3,600 meters, was built by Singapore’s Keppel specifically for drilling operations in Cuban waters.

Due to the United States trading embargo against Cuba, Repsol had to come up with a rig with almost no U.S. made parts in it, and according to Reuters, the only U.S. manufactured part on the Scarabeo 9 rig is a blowout preventer, a part that malfunctioned and caused the Deepwater Horizon disaster in the U.S. Gulf of Mexico in 2010.

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Cuba’s Oil Drilling Plan Is A Great Reason To End U.S. Embargo

Apr. 6 2011 – 12:06 pm

Christopher Helman

Cuba has announced plans to start drilling for oil off its shores, in the Gulf of Mexico, as early as this summer. The first well will likely be spudded by Spain’s Repsol, in partnership with Norway’s Statoil. They have reportedly contracted a drilling platform. Other companies lined up to drill include Russa’s Gazprom, India’s ONGC-Videsh, Malaysia’s Petronas, and Venezuela’s Pdvsa. All of these are state-controlled companies; none (except for Statoil) have much, if any, experience drilling deepwater wells anywhere, let alone in the Gulf of Mexico.

The deepwater drilling would likely take place about 100 miles from Key West, Fla. Should Americans be worried about a deepwater disaster in Cuban waters sullying Florida beaches? Well, not according to Rafeal Tenrreyro, head of exploration for Cuba’s state oil company Cupet. Tenrreyro reportedly said on Monday that “safety is more than guaranteed. Cuban institutions have made sure that is the case.”

Perhaps Cuba’s offshore drilling regulators are just as capable as the seasoned engineers reviewing permits at the U.S. Bureau of Ocean Energy Management (BOEMRE), but I doubt it.

The U.S. economic embargo against Cuba is clearly a failure and now that the Cold War is over its continuation has only served to force Cuba into the arms of Venezuela’s Hugo Chavez, who provides Cuba with 100,000 bpd of cut-price oil through Pdvsa.

Now is the time to lift the embargo, or at least ease it to allow U.S. oil companies and drilling contractors to compete for drilling prospects in Cuba.

It’s a no-brainer that we would rather have Chevron drilling 100 miles off Florida than Gazprom or Pdvsa. Plus, the U.S. offshore drilling industry needs the business–which would be substantial if estimates of a possible 20 billion barrels come to pass.

Though BOEMRE has finally begun to issue new drilling permits in the U.S. part of the Gulf, the pace of activity remains glacial. It makes no economic or even political sense to prevent American capital, know-how, and newfound emphasis on deepwater safety from being deployed in Cuba.

President Obama’s Interior Secretary Ken Salazar met with officials in Mexico Monday to discuss the creation of a “gold standard” on drilling in the Gulf. But any agreement would be more like a lead standard unless Cuba were included.

( Original Article )

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