US fears Cuba oil drilling, Mexico suggests talks

US fears Cuba oil drilling, Mexico suggests talks
Thu Apr 14, 2011 3:57pm EDT
By Tom Doggett

WASHINGTON, April 14 (Reuters) - A top U.S. official said on Thursday
they were concerned about Cuba opening its offshore waters to oil
drilling, while Mexico, which has a boundary dispute with the island
nation, said the three countries should try to work out differences.

"For us it is an issue of concern," said U.S. Interior Secretary Ken
Salazar about drilling in Cuban waters. "Obviously, because it's located
60 miles off the coast of Florida ... it's an issue that we're
monitoring carefully."

In light of the BP Plc (BP.L)(BP.N) oil spill nearly a year ago, the
U.S. is now worried that Cuba is unable to ensure its offshore drilling
will be safe. Lax U.S. government oversight was faulted in the BP disaster.

Salazar spoke to reporters during a break at a day-long international
conference sponsored by the U.S. Interior Department on best safety
practices for drilling in deep waters.

Cuba was not among the dozen or so countries invited to the conference.

Cuba is eager to develop its oil resources in the Gulf of Mexico, which
it estimates could total 20 billion barrels of crude. The United States
pegs the total at a more modest 5 billion barrels.

Mario Budebo, an undersecretary at Mexico's Ministry of Energy, said his
country had an offshore boundary dispute with Cuba and was less
concerned about drilling safely in Cuban waters.

He said the three countries should "get together and have discussions"
about Cuba's offshore drilling activities.

"That is still something that we have to deal with and put Cuba together
(at) the table," said Budebo.

Salazar did not respond to Budebo's suggestion. When asked later if
Salazar supported the idea, an Interior spokesperson referred the
question to the U.S. State Department. The U.S. does not have full
formal relations with Cuba.

But other Interior officials recently met with executives from Spanish
oil giant Repsol YPF (REP.MC) about the company's plans to drill in
Cuban waters.

Repsol, in a consortium with Norway's Statoil (STL.OL) and a unit of
India's Oil and Natural Gas Corp, plans to start drilling offshore Cuba
by the end of the summer. (Reporting by Tom Doggett in Washington;
additional reporting by Jeff Franks in Havana; editing by Jeffrey Benkoe)

http://www.reuters.com/article/2011/04/14/usa-cuba-drilling-idUSN1418302520110414