Cuba announces new plans for oil exploration

Cuba has announced new plans to drill for oil from land, while experts say its prospects for deep-water explorations remain grim because of more promising opportunities in Mexico, Brazil and West Africa.

The state-owned Cuba Petroleo (CUPET) this year plans to drill a 27,000-foot-long well, the longest ever drilled on the island, according to an EFE news agency dispatch based on a Havana television news report late Tuesday.

That well and others will be drilled from land in a region 60 to 100 miles east of Havana, using horizontal drilling techniques to reach deposits of heavy crude a few miles offshore, according to the report. CUPET drilled 10 such wells in 2013.

CUPET produces about half of the communist-ruled country’s oil consumption. Venezuela provides another 115,000 barrels per day, including 25,000 barrels for refining in a Cienfuegos plant owned as a joint venture by the two countries.

CUPET’s announcement Tuesday does not signal a change in the country’s plans for oil exploration, said Jorge Piñon, a former Amoco executive and now a Cuba oil expert at the University of Texas.

Cuba has long been drilling wells from land to underwater reservoirs, he said, and the world’s longest horizontal well was about 40,000 feet.

Far more important for Cuba’s energy future are the prospects for drilling in deep waters, Piñon added, and those remain dim because more promising areas of the globe are attracting the companies and equipment required for deepwater explorations.

“Cuba faces today tough competition to attract international oil companies due to new frontier areas of oil exploration such as Mexico, Brazil, Guyana-Suriname and West Africa.,” Piñon told El Nuevo Herald. “These areas are less contentious than Cuba, due primarily to the political pressures exerted by the U.S. commercial embargo.”

Mexico recently agreed to open some of its state oil monopoly to foreign investments, and Brazil, Angola and other West African nations have been stepping up their own explorations.

One embargo restriction is that offshore drilling platforms working in Cuba have no more than 10 percent of U.S. components. The Scarabeo 9 semi-submersible platform, for instance, was built specifically to meet the U.S. restrictions.

Piñon noted that Scarabeo 9 hit a dry hole in Cuban waters in 2012 and is now on a five-year contract to Italy’s ENI in Angola, “which makes it highly unlikely that she will be back in Cuban waters anytime soon.”

Former Sen. Bob Graham of Florida, who was in Havana last week to discuss oil spill prevention and preparedness, said Cuban officials told his group they are negotiating with foreign companies for about 10 exploration blocks off the northern coast.

The officials also said that they are convinced that large deposits of crude exist in deep waters off the northern coast and believe they will be able to resume deep water drilling at some point, Graham told El Nuevo Herald on Tuesday.

The embargo’s 10 percent limit “raises the question of an exemption of the standards of the embargo … an exemption to use others rigs,” said Graham, adding that was only an option worth considering.

The U.S. and Cuban governments already cooperate on issues such as hurricane tracking, search and rescue and drug interdictions, said Graham, a Democrat and former Florida governor who has long supported sanctions on Cuba.

Graham, 77, made his first trip to Cuba as part of a group of environmental and disaster experts arranged by Julia Sweig, a Cuba analyst and senior fellow at the New York-based Council on Foreign Relations.

He and another member of the visiting group, William K. Reilly, co-chaired the National Commission on the Deepwater Horizon Oil Spill and Offshore Drilling established after the BP oil spill in the Gulf in 2010.

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