The Lure Of Cuban Energy Independence: One Twist After Another – Analysis

Elena Maffei, Research Associate at the Council on Hemispheric Affairs/

utne.com

On May 29 during a press conference presenting Repsol’s four-year strategic plan, the company’s president, Antonio Bufrau, announced that the Spanish oil giant will almost certainly stop prospecting for oil in Cuban territory after a costly well it drilled turned out to be dry. This recent disappointment parallels the 2004 finding by Repsol that established that its explorations on the northwest coast of the country would not yield commercially viable quantities of oil. After spending $150 USD million in explorations throughout the country, Repsol is likely to turn its attention to more profitable fields in countries such as Brazil and Angola.

With the conclusion of the Spanish company’s operations on the island, the Cuban dream for energy independence could vanish, especially considering that the leased platform Scarabeo 9,is the only one allowed to operate offshore in the Cuban Exclusive Economic Zone (EEZ), an area of 112 square kilometers in the waters of the Gulf of Mexico. Repsol’s initial plan was to move the platform to a different location unless another company stepped up to lease the oil rig, at a cost of $150,000 USD per day. The Spanish company, in consortium with Statoil of Norway and the Indian ONGC, held an option to drill another well in the waters of the Cuban EEZ. But Brufau was terse in rejecting the arrangement, stating that the company preferred to concentrate its search for oil in Angola and Brazil.

Unsurprisingly, Cuba does not want to abandon its quest for oil. In an official statement, the Cuban government affirmed that Repsol’s decision does not eliminate the potential of the Cuban EEZ. He asserted that the EEZ could eventually become one of the largest reservoirs of oil production worldwide, given the high estimates regarding the country’s yet to be discovered hydrocarbon reserves. A U.S. geological survey, for instance, projects a presence of approximately 5 billion barrels in oil reserves in the country.(1) In light of such figures, this dry well could be considered isolated and not totally symptomatic. Cuban oil expert at the University of Texas Jorge Piñón affirms that two unprofitable wells are not indicative of the presence or lack of oil deposits in Cuba.(2)

The press release by the Cuban government clarifies that the exploration will continue and that the semi-submerged platform Scarabeo 9 (previously utilized by Repsol) has now been moved to the Catoche 1X sector, located north of the province of Pinar del Rio. The Malaysian oil company Gulf PC is operating in the new drilling site in cooperation with the Russian company Gazpromneft. Once this drilling is completed, the Scarabeo 9 will be moved again, this time further to Cabo de San Antonio 1X, and another round of drilling will likely commence under the supervision of the state-owned Venezuelan oil company PDVSA (Petroleos de Venezuela SA), which will hold the master lease on the platform.(3)

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