Russian drilling rig latest to pull out of Cuban waters

Russian drilling rig latest to pull out of Cuban waters
Published on April 20, 2013
By Jeffrey Todd
Nassau Guardian Business Editor

NASSAU, Bahamas -- Amid crucial repairs to the drilling apparatus, the
Russian oil rig located just 100 kilometers (62 miles) from the Bahamian
border plans to pack up and leave by June 1.

In a release by Songa Offshore, crews are evaluating "shear ram
malfunctions and technical inspection of connector bolts in accordance
with manufacturer's instructions".

"The campaign in Cuba ends June 1, and the rig will thereafter be
demobilized back to Asia where the rig is actively marketed," the
release stated. Songa Offshore is the drilling equipment company working
under contract for JSC Zarubezhneft, a Russian-based oil company in Cuba.

Jorge Pinion, research fellow at the Center for International Energy and
Environmental Policy at the University of Texas, said that signs out of
Cuba right now are "disappointing".

Pinion is also the former president of Amoco Oil in Mexico and Latin
America and a well-known industry insider for the region.

"Time is running out. Based on the announcement by Songa Offshore and
the lack of other news out of Cuba, I would say it's disappointing," he
told Guardian Business yesterday.

The analyst noted that "any news of out Cuba will have an important
impact" on what happens in The Bahamas. While the two are not
inextricably linked, executives from the Bahamas Petroleum Company (BPC)
are keenly watching events unfold just 100 km from its proposed
exploratory drill site. Success in Cuba, where it has failed to discover
commercially viable quantities of oil before, would be the best
indication yet that The Bahamas has oil.

"That would create momentum that will carry on in the public and for
Bahamian authorities," Pinion stated.

Simon Potter, the CEO of BPC, recently attended a conference in Havana
on oil exploration and made a presentation.

He stated in the company's annual report, released this week, that
repairs are ongoing to "critical equipment", which have constrained the
drilling process.

This repair process, combined with a June 1 deadline for the rig, could
make successful operations difficult in Cuba.

However, there are other indications that drilling activities are moving
forward with some success.

According to a leading publication in Latin America, the Russian company
has opened an office in Havana to ramp up the possible production of oil
and natural gas reserves.

Back in February, Russian Prime Minister met with Cuban leaders and
agreed to "write-off" around $30 million in debt. The leaders also
sought to strengthen economic ties.

In The Bahamas, government has given the apparent green light for an
exploratory drill sometime in the next 12 to 18 months. Officials are
getting ready to present new legislation that would impose a regulatory
framework for the possible industry.

Republished with permission of the Nassau Guardian"

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