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)

More >>

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

Repito!!! Repsol se va de Cuba

la gente que esta en el negocio de la prospeccion de crudos sabe perfectamente que a pesar de las avanzadas tecnologias de ubicacion de yacimientos, es necesario realizar varias perforaciones antes de hacer bingo. luego la retirada de repsol no obedece a que en un primer intento no obtuvieran resultados, sino al temor cierto que luego de inversiones billonarias se encuentre petroleo y por cualquier oscuro pretexto el regimen decida expropiar las instalaciones tal y como le ocurrio en argentina con el beneplacito de la'bana. a robar a casa de tu madre pensaran los ejecutivos e inversionistas de repsol.

----------------------------- 

El Mundo.es/

La española Repsol se marchará de Cuba después de no haber encontrado petróleo en la primera perforación que ha realizado en aguas en la isla, según se desprende de lo manifestado en Madrid por su presidente, Antonio Brufau.

"Lo razonable es que no tengamos más actividad en Cuba", dijo el máximo responsable de la petrolera española durante la presentación de la estrategia de Repsol hasta el año 2016. La petrolera "no va a hacer ningún intento más" en la isla para encontrar hidrocarburos, añadió.

Repsol contrató una plataforma para perforación en aguas ultraprofundas que llegó a Cuba a finales de enero. Tras una primera perforación en la zona económica exclusiva que la isla tiene en el Golfo de México, la compañía española comprobó que el pozo estaba seco.

"El pozo que hicimos resultó seco y casi con toda seguridad no vamos a hacer más actividad allí", insistió Brufau. En esa zona económica exclusiva operan varias petroleras extranjeras como la venezolana PDVSA y la vietnamita PetroVietnam, que tienen contratos firmados con el gobierno de Raúl Castro.

Cuba estima que en el lugar, de unos 112.000 kilómetros cuadrados, existen unas reservas de crudo de unos 20.000 millones de barriles.

Repito!!! Repsol se va de Cuba

Spain's Repsol may leave Cuba after dry well

Repsol's Chairman Antonio Brufau

May 29 (Reuters) - Spanish oil firm Repsol is considering pulling out of Cuba after its first well in an oil exploration project off the island came up dry, its chairman said.

"We're not going to drill any more ... I'm almost certain we won't do any more activities there," Chairman Antonio Brufau said at a news conference to present the firm's 2012-2016 strategy on Tuesday. (Reporting By Tracy Rucinski; Editing by Sonya Dowsett.

Spain's Repsol may leave Cuba after dry well

Cuba Oil thriller, chapter 2...

Cuba Standard/

Johannes Werner, editor

Chapter 1 of Cuba's economic story of the year is over, and now it's on to the next chapter. Repsol's first exploratory well turned up dry, and now the Scarabeo-9 platform - specifically built for drilling in Cuba - has moved westward, to a block controlled by Petronas, off the coast of Pinar del Río province. The Malaysian state oil company, in a partnership with Russia's Gazprom Neft, is drilling in an area that is untouched by previous drilling. Where the rig will go from there isn't clear. A Repsol executive told investors last year the company was planning to evaluate the results of the first drill before making a decision whether it will use the platform for a second drill. Meanwhile, Venezuelan state oil company PdVSA reportedly is in line for Scarabeo-9.    

At $600,000 a day, exploratory offshore drilling is an expensive gamble for oil companies in Cuba. However, this is the name of the game; on average, four out of five exploratory wells turn up empty. So, including a previous drill by Repsol in 2004, Cuba is at two down ... 

Cuba Oil thriller, chapter 2...

Repsol comes up dry in Cuba offshore well

By Jeff Franks and Marc Frank

HAVANA | Fri May 18, 2012 2:37pm EDT

(Reuters) - Spanish oil giant Repsol said Friday that the first of three planned wells in Cuban waters was unsuccessful, a blow to Cuba's hopes for energy independence.
"I can confirm that the Repsol well in Cuba has been reported to be unsuccessful and that we are proceeding to plug and abandon the well," a Repsol spokesman told Reuters.

Repsol operated the well in a consortium with Norway's Statoil (STL.OL) and a unit of India's ONGC (ONGC.NS), drilling 4,500 meters into the sea bed of the Gulf of Mexico.

The disappointing result was a blow to the communist island's hopes of weaning itself from Venezuelan oil, but not a fatal one because Malaysia's state-owned Petronas will soon begin a second exploration well in Cuban waters in partnership with Russian's Gazprom Neft SIBB.MM.

"“It's a bust. It doesn't mean there's not oil out there (in Cuba's offshore), but it looks like they missed the reservoir," one industry expert said of the well, drilled in 5,600 feet of water more than 20 miles off Cuba's northern coast.

Repsol began drilling at the end of January after the Scarabeo 9, a massive Chinese-built drilling rig owned by Italy's Saipem (SPMI.MI) arrived at the island following a trip half way around the world from Singapore.

The rig was scheduled to be handed over soon to Petronas, which will sink a second well about 100 miles to the west of the current drill site.

Venezuela's PDVSA is tentatively scheduled to then get the rig for a third well.

Repsol drilled the only previous Cuba offshore well in 2004 and said it found oil but that it was not “"commercial." Reportedly, it has said it is undecided about drilling another Cuban well.

HIGH STAKES

For Cuba, the offshore exploration project has high stakes because the finding of oil could make it energy independent and possibly an oil exporter, which would aid its chronically troubled economy.

Cuba has said it may have at least 20 billion barrels of oil in its part of the Gulf of Mexico, although the U.S. Geological Survey has estimated a more modest 5 billion.

The island receives about 115,000 barrels of oil daily from socialist ally Venezuela, most of which goes toward meeting its internal demand and the rest for refining into oil products for Caribbean and central American nations.

In exchange, Venezuela receives the services of thousands of Cuban medical personnel and other professionals. It also is a heavy investor in numerous joint projects with Cuba.

The Cuba-Venezuela alliance is a product of Venezuelan President Hugo Chavez' close relations with Cuban President Raul Castro and his older brother Fidel Castro, but Chavez is suffering from an undisclosed cancer that has required frequent treatment in Cuba and for which the prognosis is unknown.

He is standing for re-election in October, with his health problems looming as a major issue.

His defeat or death could put the government in the hands of an opposition party much less friendly to Cuba and the idea of giving it oil for services.

"“This dry hole is particularly a blow to Cuba, much more so than it is to the oil companies involved," said one diplomat who declined to be identified.

Dry holes in deep water generally cost at least $175 million, industry experts said, but Repsol will share that cost with its partners.

The company struggled for years to find a drilling rig that would not violate terms of the half-century old U.S. trade embargo against Cuba, which limits the use of U.S. technology.

It raised the ire of anti-Castro Cuban exiles for helping Cuba look for offshore oil and alarmed environmentalists for drilling a well in the straits of Florida, where a spill like BP's 2010 accident could cause massive oil damage to the state's coast and coral reefs.

Repsol comes up dry in Cuba offshore well

Cuba offshore drilling may hit oil reservoir soon

Orlando Sentinel (blog)

By William E. Gibson, Washington Bureau

WASHINGTON — A Spanish company drilling an exploratory well north of Havana is within a week of reaching its target: an oil reservoir believed to lie under Cuban waters roughly 60 miles from Florida.

That’s the word from energy and environmental experts who met in Washington on Thursday to discuss plans to prevent or respond to a potential oil spill and protect South Florida’s delicate coastline.

The experts, who are in touch with Cuban officials and the Spanish company Repsol, say the drilling has been done in a slow and safe manner. But they warned that plans to respond to a potential oil spill are still hampered by the U.S. embargo of Cuba, which restricts the equipment and personnel that can be sent to prepare in case of a blowout.

“In every way, I think the Cuban approach to this is responsible and appropriate to the risk they are undertaking,” said William K Reilly, former administrator of the Environmental Protection Agency under former President George H.W. Bush.

But the U.S. government, he said, “has not interpreted its sanctions policy in a way that would clearly make available in advance the kind of technologies that would be required.”

That includes capping equipment needed to stop a major leak, he said. “That includes even the spare parts to a blowout preventer.”

He and several oil industry and environmental experts urged President Barack Obama to grant a general license for American companies to rush into Cuban waters without restriction to help stop a spill at its source.

The staging area for needed equipment should be in Cuba for a fast response, they said, but instead it is being assembled by Helix Energy Systems near Tampa. Some equipment will also be housed in South Florida.

The Coast Guard cannot enter Cuban-controlled waters without permission from the Cuban government. But Coast Guard officials say they are increasingly confident that the Cubans would allow them to help cap and contain a spill at the source.

The initial drilling is within a week of reaching the depth needed to tap an expected reservoir beneath Cuban waters, said Lee Hunt, past president of the International Association of Drilling Contractors.

“The desirability for a command center in a Cuban port for spill-response staging is very high,” Hunt said. “The likelihood of it happening? Nil.”

Cuba offshore drilling may hit oil reservoir soon

What’s the Matter with Argentina?

Why Nations Fail/ By Daron Acemoglu and James Robinson

One hundred years ago Argentina was one of the richest countries in the world. For fifty years it rode a wave of favorable market opportunities and experienced one of the most successful periods of extractive growth in world history (sharing these honors with the Soviet Union and contemporary China or Sinagpore).

“I’m a head of state and not a hoodlum.”

But extractive growth can’t last and in Argentina it didn’t. When you have a combination of extractive political institutions but somewhat inclusive economic institutions as Argentina did (and China does now) there are two ways to go, but only one leads to sustained economic growth. You can open the political system and try to move towards an inclusive society, or you can go in reverse and clamp down on the inclusivity in economic institutions giving up prosperity for power.

Argentina did the latter. Around the time of the First World War the traditional elites in Argentina made hesitant steps towards opening the political system, but they quickly decided they did not want to run the risk of losing power. In 1930 came the first military coup. Opening the political system was off the table. Then came a series of coups, and the one in 1943 brought a military officer named Juan Domingo Perón to power as Minister of Labor. Perón used this position to build an extraordinary political machine which has dominated Argentina politics more or less ever since. There is only one effective political party today in Argentina, the Peronists (official name: Partido Justicialista). The Peronists were not the traditional elites. Quite the contrary. But they seized control of the society and its economic institutions, and have been every bit as extractive as the traditional elites.

This is a pattern we called, following the sociologist Robert Michels, the Iron Law of Oligarchy. Extractive economic institutions always create struggles for control, and they tend to attract would-be elites bent on extraction, and whoever comes to power takes over a system without checks on their power. The outcome is to re-creation of extractive institutions under a different guise.

In Argentina in the 1940s, the Peronists won the struggle for power and are still on top. And the extraction still continues (even if it often takes the form of distorting economic institutions to hold on to power rather than just for personal enrichment).

Latest evidence: this week the Peronist government under Cristina Fernández de Kirchner seized a 51% share in the oil company YPF, previously majority owned by the Spanish energy company, Repsol YPF. The government immediately ousted the Chairman Sebastián Eskenazi and replaced him with the Peronist Minister of Planning. A tribunal will be formed to decide on the level of compensation!

                                       “I’m a head of state and not a hoodlum.”

Insecure property rights are actually a well known phenomenon in Argentina. Grabbing the oil company is actually small potatoes compared to “El Corralito” in 2001 when the government effectively expropriated 75% of people’s savings in banks (as we discuss in Chapter 13 of Why Nations Fail).

The failure to make the transition towards inclusive economic institutions condemned Argentina to a century of economic stagnation.

Will the same thing happen in China? Singapore?

What’s the Matter with Argentina?

Cuba - Repsol, inversiones extranjeras y la familia Corleone de Biran

El Ministerio de Relaciones Exteriores de Raul Castro ha emitido una Declaración donde se solidariza y apoya la expropiacion por parte del gobierno argentino que preside Cristina Fernandez del 51% de las acciones de la compania petrolera YPF [Yacimientos Petroliferos Fiscales] que pertenecian a la espanola Repsol, la misma que en estos momentos realiza perforaciones en la zona economica exclusiva de Cuba en el Golfo de Mexico.

Punto 0 [Fidel] y Punto 1 [Raul] tenian varias opciones de respuestas que iban desde embocar una 3ra Declaracion de La Habana hasta "hacerse de la vista gorda". Luego el mayor interes se centraba en constatar cual seria la declinacion asumida y, aunque esperada, los tres parrafos de la breve nota muestran un balance sopesado pero cinico entre ambas posiciones extremas. 

Si en el primero de ellos se informa del hecho, ya en el segundo de los parrafos se enarbola el argumento "moral" que sostiene la decision argentina: "La compañía YPF, originalmente una empresa estatal argentina fue una de las tantas privatizadas y vendidas a un precio muy inferior al real, por el Presidente Carlos Saúl Menem, quien gobernara ese país austral de 1989 a 1999, en el marco de las medidas neoliberales que, a instancias y con la connivencia de los Estados Unidos, se impusieron a Nuestra América en ese periodo".

Para el tercer parrafo bastaria intercambiar los nombres de Cuba y Argentina para obtener la verdadera intencion de la declaracion y la vision del Neokaxtrizmo respecto a sus relaciones con los inversionistas extranjeros: "Cuba [Argentina] reitera su plena solidaridad con la República Argentina [de Cuba] y afirma que a dicha nación le asiste todo el derecho de ejercer la soberanía permanente sobre todos sus recursos naturales, incluidos los hidrocarburos. La amparan el Derecho Internacional y las decisiones que en tal sentido ha adoptado en numerosas ocasiones la Asamblea General de las Naciones Unidas".

Seguramente hoy habran detenido un desayuno sobresaltado Antonio Brufau presidente de Repsol, Jose Manuel Soria ministro de industrias y hasta el mismisimo Mariano Rajoy jefe del gobierno espanol, porque deben haber comprendido que los $750 millones que costo la construccion de la Scarabeo 9 y los $511 mil de sus costos operacionales diarios son propiedad de la familia Corleone de Biran tan pronto lo consideren conveniente. 

Bien harian en prestar cuidadosa atencion tanto politico norteamericano favorable a las inversiones norteamericanas en la isla carcel, tanto emigrado sentimentaloide y reunificador y todo inversionista avido de aplicar sus capitales en las reformas neokaxtriztas, antes que sea demasiado tarde y terminen como un Max Marambio, Sarkis Yacoubian y Cy Tokmakjian o como ... Repsol...porque como la mafia, lo unico que saben en Biran es robar.

Cuba - Repsol, inversiones extranjeras y la familia Corleone de Biran

Cuba no cree que la expropiación argentina a Repsol la afecte

Expansión.com/

La Habana, 17 abr (EFECOM).- Cuba no cree que la expropiación de la participación de la petrolera española Repsol en la argentina YPF afecte a los trabajos que esa compañía realiza en sus aguas en el Golfo de México, según ha afirmado hoy el viceministro primero de Comercio Exterior e Inversión Extranjera, Antonio Carricarte.

"No tengo una impresión de que eso pueda afectar", ha indicado Carricarte en rueda de prensa en La Habana ante una pregunta sobre la situación cubana por el contencioso que se ha abierto tras la expropiación argentina.

El viceministro ha señalado que Cuba se mantendrá "al tanto" pero ha dicho que actualmente "hay un trabajo normal", al referirse a las operaciones que realiza desde enero la plataforma petrolífera contratada por Repsol-YPF para perforar en las aguas cubanas del Golfo de México.

Cuba calcula que las reservas de petróleo de que dispone en su Zona Económica Exclusiva (ZEE) en el Golfo de México -cuya extensión ronda los 112.000 kilómetros cuadrados- es de 20.000 millones de barriles de crudo mientras que otras estimaciones sitúan la cifra entre 5.000 y 9.000 millones.

La ZEE de Cuba está dividida en 59 bloques, de los que 22 están contratados por varias compañías petroleras extranjeras como la venezolana PDVSA y la vietnamita PetroVietnam, además de Repsol-YPF.

La presidenta argentina, Cristina Fernández, decretó el lunes la intervención de YPF y envió al Congreso un proyecto de ley que establece la expropiación del 51 por ciento de las acciones que Repsol tiene en la compañía, un 57,4. EFECOM

Cuba no cree que la expropiación argentina a Repsol la afecte

Truth About Cuban Oil is Trickling Out

http://www.capitolhillcubans.com/

After endless debate and speculation about the Castro regime's latest offshore oil drilling partnership with Spain's Repsol (don't forget they unsuccessfully explored together in 2004), it seems some truths are finally trickling out.

For example, what happened to the specter of a catastrophic environmental disaster affecting Florida's coasts -- similar to that of the BP Macondo spill?

Well, the U.S. Coast Guard, along with several state, federal, county and wildlife agencies, have now concluded (after various simulation exercises):

"[T]hat even under intense weather conditions and high seas, oil from the damaged platform would take at least a week to reach the Middle Keys by way of the Gulf Stream. And by the time the oil got here, it would result in more of a cleanup nuisance than the type of ecological disaster seen on the shores of Louisiana in the aftermath of the DeepWater Horizon/BP oil spill two years ago this week [...]

Jim Jeansonne (of the National Oceanic and Atmospheric Administration) said the only way his team was able to get the fictional oil to come to the Middle Keys using computer models was to calculate sustained 34-knot winds for several days coming out of the southeast. He said it would be as if a tropical storm was off the Keys on the Atlantic side and did not move for days.

'The probability is low, which is good,' Jeansonne said.

He said the team also calculated scenarios where oil reached Key West and the Lower Keys, but he called the chances of that ever happening from a disaster on the Scarabeo 9 'even more remote.'"

In other words, it was all a ploy -- as in the past -- by the Castro regime's cheerleaders trying to "scare" Congress into lifting sanctions.

As a matter of fact, what is the biggest obstacle to Cuba's offshore oil exploration?

According to the Castro regime's own energy expert, Manuel Marrero Faz, the obstacle is what he described (during a hydrocarbon conference last week in Havana), "as the ruthless economic, financial and U.S. trade sanctions with Cuba."

Isn't that a shame.

And by the way, how is Repsol's latest exploration with the Castro regime going?

Apparently, not so good:

"Drilling of the first well in the long-awaited exploration of Cuba's offshore oilfields has gone slower than expected, but should be completed by mid-May, sources close to the project said.

They said drillers had encountered harder rock beneath the sea bed than expected, which combined with other minor problems, had slowed progress."

Those are very expensive problems.

Truth About Cuban Oil is Trickling Out

First Cuba offshore well going slowly, mid-May finish seen

By Jeff Franks

HAVANA, April 13 (Reuters) - Drilling of the first well in the long-awaited exploration of Cuba's offshore oilfields has gone slower than expected, but should be completed by mid-May, sources close to the project said on Fri day.
They said drillers had encountered harder rock beneath the sea bed than expected, which combined with other minor problems, had slowed progress.
When drilling began on Feb. 1, Spanish oil giant Repsol YPF said the average deepwater well takes 60 days to complete, but that many drag on much longer, depending on conditions.
A Repsol spokesman could not confirm on Friday the projected mid-May completion date.
This well, which is in 5,600 feet (1,706 metres) of water off the communist-run island's northwest coast, is the first of five currently planned, Cuban officials say. More >>

First Cuba offshore well going slowly, mid-May finish seen

International Association of Drilling Contractors on Cuba oil drilling

 Read >>

International Association of Drilling Contractors on Cuba oil drilling

Presidente de Repsol habria visitado Cuba

De acuerdo con un despacho de americaeconomica.com   Antonio Brufau, presidente de Repsol habria visitado Cuba el pasado mes de febrero. En su recorrido habria incluido la plataforma de prospeccion petrolera Scarabeo 9. Mas >>

Presidente de Repsol habria visitado Cuba

#NASDAQ on Cuba's offshore oil drill

NASDAQ/ Pierre Bertrand

Cuba's fledgling oil industry has for the first time dropped an offshore rig into the waters off the Florida Keys, a move that has U.S. officials and environmentalists warning that the island nation's energy ambitions could come at the expense of the ecologically sensitive region at the tip of the Florida Peninsula.

"Cuba cannot be trusted to provide even the bare essentials to its own citizens and it certainly can't be trusted to oversee safe and environmentally sound oil drilling only 90 miles off our pristine Florida coast," said Florida Lt. Gov. Jennifer Carroll in testimony before the House Subcommittee on Coast Guard and Maritime Transportation.

Working with Spain's biggest oil company, Repsol, Cuba has placed an exploratory well 30 miles off Havana, 5,600 feet below the ocean surface. It's one of five wells planned in the region and is deeper than BP's Macondo well that spilled millions of barrels of oil in the Gulf of Mexico in 2010. The well sits 56 miles away from the Keys. By contrast, BP's well was 41 miles off the Lousiana coast. Cuban officials hope that the oil produced offshore will fill a 100,000-barrel-a-day supply gap currently covered by Venezuela.

Because of the well's location in the Florida Strait a spill or blowout, like the one that occurred in the Gulf, would be an environmental disaster of untold peril, said John Proni of Florida International University, a scientist with the Atlantic Oceanography and Meteorological Laboratory, a branch of the National Oceanographic and Atmospheric Administration.

Proni, who also testified before the maritime subcommittee, explained that the Cuban rig sits dangerously close to the Gulf Stream current system. Any leaked oil that gets into this whirlpool would reach U.S. coastal waters quickly and threaten the "iconic Florida coral reef system, important fisheries and breeding grounds, location of threatened and endangered sea grass and coral, and habitat for rare and endangered species," Proni said.

The drilling of the well is expected to take roughly two months.

The Bureau of Safety and Environmental Enforcement concluded last month that the Cuban rig met U.S. standards after American offshore oil drilling regulators boarded and reviewed the Spanish-operated equipment before it reached Cuban waters. However, because the rig was not bound for U.S. territory, nor contracted for exploration in the United States, the regulators had no authority to influence Repsol's plans. The U.S. has recently overhauled its offshore permitting processes and tightened regulations -- and it is likely that these rules will continue to evolve in the coming years. Since the U.S. and Cuba do not have diplomatic relations, it will be impossible to continue to monitor this offshore project even as the standards for operating rigs in coastal waters improve.

Read more: http://community.nasdaq.com/News/2012-02/cuban-oil-countrys-ambitions-endanger-florida-coral-reefs-and-coast.aspx?storyid=119873#ixzz1lzggamdP

#NASDAQ on Cuba's offshore oil drill

Spain's Repsol begins drilling offshore Cuba

By Jeff Franks

Havana | Thu Feb 2

(Reuters) - Spanish oil company Repsol YPF has begun drilling the first well in Cuba's long-awaited exploration of offshore oilfields that the communist country says hold both billions of barrels of oil and the key to greater prosperity, industry sources told Reuters.

The massive Scarabeo 9 drilling rig, which arrived in Cuban waters two weeks ago, began drilling into the sea floor about 30 miles northwest of Havana on Tuesday night, the sources said.

A Repsol spokesman said the company could not comment on "operational details."

The newly built, high-tech rig is operating in 5,600 feet of water, or what the oil industry calls "ultra-deep water," in the Straits of Florida, which separate Cuba from its longtime ideological foe, the United States.

Sources close to the project said such wells generally take about 60 days to complete.

Repsol, which is operating the rig in a consortium with Norway's Statoil and ONGC Videsh, a unit of India's Oil and Natural Gas Corp, has said it will take several months to determine the results of the exploration.

The well is the first of at least three that will be drilled in Cuban waters with the Scarabeo 9, which was built in China and is owned by Saipem, a unit of Italian oil company Eni.

Sources have said that Repsol will drill the first well and then the rig will go to Malaysia's Petronas in partnership with Russia's Gazprom Neft and then back to Repsol for the third well.

It is not clear what happens after that, although some sources have said Repsol, which is leasing the Scarabeo 9 from Saipem at a rate said to be more than $500,000 a day, will move the rig to Brazil for exploration there.

Cuba has said it may have 20 billion barrels of oil in its northern waters, which are its part of the Gulf of Mexico. The U.S. Geological Survey has estimated it may have 5 billion barrels of oil, but its study does not include the entire Cuban gulf zone.

(Additional reporting by Jane Sutton in Miami; Editing by Bob Burgdorfer)

Spain's Repsol begins drilling offshore Cuba