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Oil rig to drill south of Keys by September

U.S. Rep. Ileana Ros-Lehtinen, whose constituency includes the Keys, said this week that she will reintroduce legislation this session aimed at preventing “ the Cuban regime from becoming the oil tycoons of the Caribbean.”

Ros-Lehtinen, a Miami-Dade Republican, is responding to reports that construction of a huge, Chinese-made semi-submersible oil rig is almost complete and will be leaving Singapore by June. The rig, named the Scarabeo 9, will likely begin drilling for oil about 6,500 below the surface of the Straits of Florida by late summer or early fall. It will be positioned about 40 to 50 miles from Key West.

Jorge Piñon, a former energy industry executive and current visiting research fellow at the Cuban Research Institute at Florida International University, said the transit time for the rig to get here is about 60 to 70 days.

“My worst-case scenario is late September, including set-up time,” Piñon said, regarding when drilling will begin.

The rig will have a crew of about 220 people, none of them American because of the nearly 50-year trade embargo imposed by the United States. The rig is owned by Saipem SpA, a subsidiary of Italian oil company, Eni SpA. The first company to operate the vessel will be Repsol from Spain.

Construction of the rig began at the CIMC Raffles Shipyard in China and was moved to the Keppel FELS shipyard in Singapore last fall. The rig will be drilling for oil in an area known as the Jagüey. The depth it will be drilling is about 1,500 feet deeper than the Macondo Prospect, made infamous by the British Petroleum DeepWater Horizon oil spill that poured millions of gallons of crude into the Gulf of Mexico in the spring and summer of 2010. It was the largest oil spill in U.S. history.

The inevitability of the rig’s arrival is worrisome to both critics of the Communist Cuban government and to those who fear an oil spill in the Jagüey could be devastating to Florida’s environment, and in turn, its tourism-dependent economy. What’s even more concerning to some is that the embargo would likely delay any help U.S. companies or government agencies could offer Cuba in the event of a spill.

Punitive legislation

News of the Scarabeo 9 broke about two years ago, prompting Ros-Lehtinen, who is chairman of the House Committee of Foreign Affairs, to introduce legislation two sessions in a row that would prohibit entry into the United States any foreign principal of a company or shareholder who owns a controlling stake in a company that has made an investment of $1 million or more in a Cuban energy operation. The bill would also make it illegal or any U.S. citizen to invest in or work for a Cuban offshore drilling project.

Ros-Lehtinen introduced the bill in the 110th and 111th Congresses and her staff said this week that she plans on introducing it again on the news that the Scarabeo 9 rig could be soon on its way.

“The Cuban regime is desperately attempting to prolong its overdue existence and tyrannical influence by setting up this oil rig. The U.S. must apply stronger pressure to prevent other companies from engaging commercially, and any other means, with this crooked and corrupt regime.” Ros-Lehtinen said in an e-mailed statement Wednesday.

The bill does not have a Senate counterpart, according to members of Ros-Lehtinen’s staff. Messages were not returned by staff of Republican Sen. Marco Rubio or Democrat Sen. Bill Nelson for this report.

Another Florida congressman, Rep. Vern Buchanan, R-Sarasota, introduced a bill a month ago that would punish oil companies doing business with Cuba by directing the U.S. Interior secretary to deny them American oil permits.

“Repsol has 20 drilling permits awaiting approval for projects in the Gulf of Mexico. My bill essentially tells Repsol to decide whether it wants to continue doing business with Cuba or the United States,” Buchanan said in a statement.

Nelson introduced a similar bill in 2008.

How much oil?

Cuba and other foreign oil companies have identified up to 20 prospective wells in the Cuban Basin of the Caribbean that could yield billions of barrels of oil. The U.S. Geological Survey estimated in 2008 that there were between 7 and 14 billion barrels in the Northwest Cuba Basin, where the Scarabeo 9 will be operating. Repsol and the Cubans think there are more than 20 billion barrels.

Kevin Book, with the Washington, D.C.-based energy research firm ClearView Energy Partners, said the only reliable way to find out how much oil is in the basin is by drilling exploratory wells, like Repsol and a host of other foreign energy companies plan to do beginning this year.

“There is no hard data of which I am aware substantiating proven economically recoverable reserves in the Cuban Basin, but there also aren’t any contemporary seismic surveys using digital imaging. The best way to get new data is to drill an exploratory well, and it’s clear that Repsol intends to do that,” Book said in an e-mail.

At least six other countries plan on using the Scarabeo 9 once Repsol finishes its drilling operations. They include Statoil of Norway, ONGC of India, Petrôleus of Venezuela, Brazil’s Petrobras, Russia’s Gazprom and Petronas of Malaysia, according to several media reports.

News of the arrival of the Scarabeo 9 comes a week after President Barack Obama announced his administration will open up more areas off the Mid- and South-Atlantic coast and Alaska’s National Petroleum Reserve to oil exploration and production in an effort to lower near-record-high gasoline prices.