Cuban oil rig set to cause waves in Washington – Reuters
17 May 2011
By Daniel Wallis
LA JOLLA, Calif. , May 17 (Reuters) - The arrival of a unique
oil rig off communist Cuba is set to cause waves in Washington,
raising questions about U.S. drilling permits and the response to
any disaster, a conference heard on Tuesday.
Spanish giant Repsol YPF is due to bring the Chinese-built
Scarabeo 9 rig to the Caribbean island later this year to drill at
least one well in partnership with Norway's Statoil and a unit of
India's ONGC.
"I think it's going to have a much bigger impact on U.S.
domestic policy than it is on Cuba," said Jorge Pinon, visiting
research fellow with Florida International University Latin
American and Caribbean Center's Cuban Research Institute.
The main reason is that Repsol plans to use the high-tech
semi-submersible Scarabeo 9 for a deepwater drilling bid in Cuba's
Gulf of Mexico zone, parts of which are within 50 miles (80 km) of
the Florida coast.
That puts the planned drill site close to areas where the Obama
administration blocked U.S. drilling in the eastern Gulf of Mexico
after BP's massive Deepwater Horizon oil spill last year.
"A lot of people are going to be knocking on doors in
Washington, saying 'How come the Cubans are drilling and we're not
allowed to drill in the eastern Gulf?'," Pinon told a Latin
American energy conference in La Jolla, California.
U.S. EMBARGO
The Scarabeo 9 is unique because Repsol had to find an oil rig
that met the terms of the 49-year-old U.S. embargo on Cuba, which
limits the amount of U.S. technology that can be used in equipment
used there. The embargo also prevents U.S. companies from operating
on the island.
Pinon said the $750 million rig, which can drill in 12,000 feet
(3,650 meters) of water, was due to leave Singapore next month and
should arrive in Cuba in September or October.
He said the only U.S.-made part on the Scarabeo 9 was the blow
out preventer -- one of the pieces of equipment that failed during
the Deepwater Horizon disaster.
And that raises the other issue likely to make waves when the
rig, owned by Italian service company Saipem and being prepared in
Singapore, arrives off Cuba: what happens if there is a similar
accident to the one off Louisiana?
"The U.S. embargo means Repsol can't pick up the phone to
Washington," Pinon said. "Any equipment to help in a problem would
have to come from the UK or Norway or somewhere else."
He said the U.S. government should formulate a "One Gulf"
strategy with the international oil companies working in Cuba, as
it is trying to do with Mexico, so that in the case of any
emergency they could turn to the United States for help.
The U.S. government has said it would let U.S. companies that
handle accidental oil spills operate in Cuban waters if the need
arose. Pinon said that should be formalised.
Repsol drilled an offshore well in Cuba in 2004 and said it
found oil, but described it as "non-commercial".
After drilling at least one well, Repsol is due to pass the
Scarabeo 9 to Malaysia's state oil firm Petronas. Venezuela's PDVSA
may also be in line to get the rig for its Cuban blocks.
The oil industry is watching the Repsol project very closely and
if it finds significant reserves, more companies are likely to want
to explore in Cuban waters.
Cuba has said it may have 20 billion barrels of oil offshore,
although the U.S. Geological Survey has estimated 5 billion
barrels. (Editing by Ron Popeski)
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