Cuba - Chinese built oil rig departs Singapore for Repsol's Cuban offshore blocks
29 August 2011
Source: Petroleumworld.com
Havana, Aug 29, 2011
A new, Chinese-built drilling rig was expected to depart
Singapore on Friday or later this weekend on its way to Cuba where
it will be used to usher in a new era in offshore oil exploration
for the communist-led island. The Scarabeo 9, owned by Italian oil
giant Eni SpA's [ENI.MI) offshore unit Saipem [SPMI.MI] and
contracted in Cuba by Spanish oil firm Repsol YPF [REP.MC], was
anchored in Singapore and ready to leave on what an Eni spokesman
said would be an 80-day voyage. A Western diplomat in Havana
said the rig would stop in South Africa and Brazil before reaching
Cuba in November, with the expectation it will start drilling
shortly after arrival.
Repsol drilled a well in Cuban waters in 2004 and found oil
there, but for various reasons, including the longstanding U.S.
trade embargo against the island, has not drilled again. For Cuba,
a big oil find will give its struggling economy a boost and reduce
or eliminate its dependence on oil-rich leftist ally Venezuela ,
which ships 113,000 barrels a day to the island at reduced
prices.
Opponents of the Cuban government fear that if significant oil
reserves are discovered, it will only further entrench the
communist system and its leaders. Cuban President Raul Castro,
80, is in the midst of liberalizing the Soviet-style economy with
the goal of assuring the survival of communism once he and his
elderly leadership group are gone.
The Scarabeo 9, which has the latest technology and is capable
of drilling in up to 12,000 feet (3,600 meters) of water, was built
in Yantai CIMC Raffles Shipyards in Yantai, China , but after a
number of delays was shipped to the Keppel FELS [KPLM.SI] shipyard
in Singapore last fall for completion.
Repsol, in a consortium with Norway's Statoil [STL.OL] and a
unit of India's ONGC [ONGC.BO], is expected to drill one or two
wells before passing the rig to Malaysia's state-owned oil company
Petronas and then on the ONGC unit, ONGC Videsh, both of which have
leased their own exploration blocks in Cuba's offshore.
Venezuela's PDVSA has said it plans to drill in Cuban waters
within a year, while China's national oil company is considering
whether to lease offshore blocks as well, a Cuban oil official
recently told Reuters.
Cuban waters border the U.S. part of the Gulf of Mexico and that
of Mexico, but U.S. oil companies are forbidden from working in
Cuba due to the U.S. embargo put in place five decades ago with the
aim of toppling Cuba's communist government.
Story by Jeff Franks from Reuters. Additional reporting by
Stephen Jewkes in Milan and Marc Frank in Havana; Editing by Vicki
Allen.
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