• Submitted by: manso
• Editorial Articles
• 11 / 20 / 2010

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Nov 19th 2010, 16:34 by The Economist online. HAVANA. Several international energy companies are making a push to find Cuba’s long-awaited oil. In 2011 at least three exploratory drillings are expected to go ahead. The first is expected to be a consortium led by Spain’s Repsol, the only firm with experience in Cuban waters. In 2004 the company did find oil below the seabed, but deemed it not to be commercially viable.

Now,Repsol has teamed up with Norway’s Statoil and India’s Oil and Natural Gas Corporation for a second attempt. The group’s drilling rig is currently being built in China and is expected to arrive in Cuba early next year.

Those companies will now face competition from Gazprom, Russia’s state oil giant, which has just bought a 30% stake in four Cuban offshore exploration blocks in an apparent late bid to join the action. Malaysia’s Petronas has leased rights to the areas from the Cuban government since 2007. A third entrant is PDVSA, the state oil company of Venezuela, Cuba’s ally and benefactor. PDVSA will probably secure Brazilian cooperation. Companies from China, Vietnam,and Angola are also in negotiations.

How much oil might actually lie in Cuba's sector of the Gulf of Mexico is a matter of dispute. The Cuban government estimates the figure to be 20 billion barrels"an amount which, if recoverable, would transform the country and end its current dependence on subsidised Venezuelan oil.

The United States Geological Survey’s estimate is 4.6 billion barrels, a modest but nevertheless significant quantity. Any oil would be difficult to extract, as the potential reserves lie beneath exceptionally deep waters. But prospectors are encouraged by the fact that adjacent American and Mexican fields have proved highly productive.

The latest activity is both tantalizing and alarming for the United States. Its trade embargo means that American oil companies are unable to bid for drilling rights. The policy also restricts the amount of American technology that can be used in exploring for oil in Cuban waters, which partly explains why Repsol has commissioned a Chinese bespoke rig. If a meaningful amount of oil is found just out of the United States’s reach, the embargo’s powerful advocates might
begin to face formidable opposition from energy-industry lobbyists in Washington.

Another set of concerns involves the environment, since Cuba’s Gulf zone lies within 80km (50 miles) of Florida’s coastline. A spill could be extremely hard to contain, given Cuba’s lack of relevant technology or experience, and the lack of any bilateral agreement between Cuba and the United States. Then again,the Deepwater Horizon spill showed that America’s own capacity to clean up after itself is limited.

Source: http://groups.yahoo.com/group/CubaNews/message/119007