Forbes "eat" the Castro's oil blackmail to US

Christopher Helman, Forbes Staff/

In a few months Spanish oil company Repsol will start drilling for oil off the coast of Cuba, in a spot just 70 miles south of Key West. Soon Repsol–and its JV partners Norway’s Statoil and India’s ONGC–will be joined by rigs from PetroVietnam, Malaysia’s Petronas and Venezuela’s PDVSA. But you won’t see any U.S. companies there. Inexplicably, the U.S. maintains its economic embargo against the Castro regime.

This wrong-headed policy represents a dangerous threat to the environment and a huge missed opportunity to the U.S. oil industry. The U.S. embargo will do nothing to prevent oil drilling from taking place in Cuban waters. But it will prevent that work from being done by the most experienced companies with the highest-quality equipment. Norway’s Statoil is a proven operator with a long history in the North Sea and the Gulf. The rest of those companies are just getting started offshore.

A group of U.S. lawmakers in September urged Repsol (ticker: REPYY.PK) to call off its Cuba plans or face the threat of U.S. lawsuits. Repsol wisely called that bluff.

At least the Obama administration is doing something to ensure that Repsol’s drilling rig is up to snuff. According to an excellent article from Bloomberg today, Repsol’s Chinese-built Scarabeo 9 rig will soon by boarded by four U.S. inspectors (two from the Coast Guard, two from the Dept. of Interior) who will do what they can to check out the rig and watch some drills. But, according to the article, there will be real limits to what the inspectors can inspect. They won’t get to check the rig’s all-important blowout preventor, or the well casing or drilling fluids that are to be used. Though the U.S. inspectors will discuss any concerns they have with Repsol, they will have no enforcement authority.  More >>