Cuba deep water wells may boost oil output six-fold, Pinon Says – Bloomberg
18 May 2011
By Carlos Manuel Rodriguez
Cuban deepwater exploration projects that will begin this year
have a high probability of success and may increase the island
nation's oil output by more than 500 percent, said Jorge Pinon,
energy fellow at the University of Miami Center for Hemispheric
If successful, the new round of exploration may lead to
production of 200,000 to 300,000 barrels of oil a day, Pinon said
in an interview yesterday in La Jolla, California. Cuba imported
96,000 of oil a day in 2009 while it produced 47,500 barrels daily,
according to a presentation from Pinon.
"The probability of success in finding hydrocarbons is great,"
said Pinon, a former head of BP Plc's operations in Latin America
who recently visited Cuba. The communist nation would own about 60
percent of crude produced from projects resulting from the
exploratory wells, he said.
The exploration projects will be the first conducted in Cuba
since 2004 and they may start as soon as September, when the rig
Scarabeo 9 is expected to arrive to the Caribbean island. The first
project will be headed by Madrid-based Repsol YPF SA (REP) and
Statoil ASA (STL) will also participate, Pinon said. The deepwater
Cuban blocks to be explored are located about 60 miles south of
Florida, he said.
The blocks are part of 22 concessions awarded by the Cuban
government to foreign oil companies. In 2004, Repsol did not find
enough oil in a deepwater project to make it commercially
"The fact that five years after the 2004 non-successful
exploration, Repsol and Statoil continue there is telling us there
must be something there," Pinon said. The next 18 months will be
"key" for the exploration projects, he said.
Oil & Natural Gas Corp., India's biggest energy explorer,
Malaysia's Petroliam Nasional Bhd., and Venezuela's Petroleos de
Venezuela SA are other companies that are involved in the seven
upcoming exploratory projects.
Under an optimistic scenario, Cuba may produce enough oil to
meet its own consumption needs, Pinon said.
The U.S. trade embargo on Cuba is a key reason why offshore
drilling hasn't developed in the communist island's waters, the
Cuban government has said. The embargo caps the amount of U.S.
parts on any rig that may operate in Cuba at 10 percent.
The Scarabeo 9 platform being built by Italy's Saipem SpA (SPM)
is the only rig that complies with the U.S. embargo limits, Pinon
The U.S. Geological Survey estimates that Cuba's North Basin
region holds 4.6 billion barrels of oil, according to a 2004
To contact the reporter on this story: Carlos Manuel Rodriguez
in Mexico City at firstname.lastname@example.org
To contact the editor responsible for this story: Dale Crofts
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