Cuba tells islanders 1st exploratory oil well dry

Posted on Wednesday, 06.06.12

Cuba tells islanders 1st exploratory oil well dry
By ANDREA RODRIGUEZ
Associated Press

HAVANA -- Cuba is finally letting its citizens know that an exploratory
offshore oil well turned out to be a bust, more than two weeks after
Spanish oil company Repsol informed the world.

An official notice from Cubapetroleo published in Communist Party
newspaper Granma on Wednesday said the deep-water well was unsuccessful,
but that doesn't mean there's no oil in the 43-square-mile
(112-square-kilometer) exploration area in question.

It is "one of the main productive basins on the world level, with high
potential for the discovery of new hydrocarbon reserves in accordance
with geological studies," the statement read.

The cash-strapped country is banking on a big oil strike that would
provide a sorely needed economic lifeline, so it was disappointing news
when Repsol announced May 18 that it its well , sunk at cost topping
$100 million, had failed and would be plugged.

It is common for exploratory wells to come up dry, and oil companies
factor the risk into their operational calculus.

But Repsol soon announced that it would opt out of its contract to drill
a second well, and said it would almost certainly abandon Cuban offshore
exploration altogether. There was no word of the company's pullout in
Wednesday's official notice.

Cuba does not have any independent newspapers or broadcasters and most
islanders have little or no access to the Internet, so likely few people
were previously aware that the well had struck out.

The Scarabeo-9 drilling platform, built and assembled in China and
Singapore with less than 10 percent U.S.-made parts to avoid triggering
penalties under Washington's economic embargo against Cuba, has since
been floated west to a point off the western province of Pinar del Rio.

There, it has been used by PC Gulf of Malaysia since May 24 for another
exploratory well, with Russia's Gazpromneft as a partner, according to
the official statement. PDVSA, the state-owned oil company of key Cuban
ally Venezuela, afterward will get its chance in a separate bloc off the
Cape of San Antonio, the island's most westernmost point.

Geological studies suggest anywhere from 5 billion to 9 billion barrels
worth of oil may be lurking off Cuba deep below the Gulf of Mexico, and
island authorities are hoping there may be even more.

Cuba reported last year that it produced 4 million tons of crude and
natural gas in 2010, around 46 percent of national consumption.
Subsidized oil from Venezuela makes up the difference.

http://www.miamiherald.com/2012/06/06/2835881/cuba-tells-islanders-1st-exploratory.html