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Rig arrives in Cuba to hunt for offshore oil
Self-propelled Scarabeo-9 arrives after months-long journey, amid concerns about environmental impact and US-Cuba ties.
Last Modified: 20 Jan 2012 20:52
The oil rig is being leased by a Spanish oil company for an estimated $500,000 per day [Reuters] 

A huge drilling rig has arrived in the Gulf of Mexico, in the waters north of Havana, where it will sink an exploratory well deep into the seabed, launching Cuba's dreams of striking it rich with offshore oil.

The Scarabeo-9 platform was visible on Friday from Havana's sea wall, as it chugged westward toward its final drill site about 50km from the capital, and 90km south of Key West, in the US state of Florida.

Spanish oil company Repsol RPF, which is leasing the rig for approximately $500,000 a day, said it expects to begin drilling within days to find out whether the reserves are as rich as predicted.

A US trade embargo essentially bars US companies from doing oil business with Cuba and threatens sanctions against foreign companies if they do not follow its restrictions, making it far more complicated to line up equipment and resources for the project.

To avoid sanctions, Repsol chose the Scarabeo-9, a 115-meter, self-propelled, semi-submersible behemoth built in China and Singapore and capable of housing 200 workers.

The rig qualifies for the Cuba project because it was built with less than 10 per cent US-made parts, no small feat considering America's dominance in the industry.

"The geologists have done their work. If they've done it well, then we'll have a good chance of success," Kristian Rix, Repsol spokesman, said by phone from Madrid.

"It's been a long process, but now we're at the point where we discover whether our geologists have got it right. It's a happy day."

Environmental concerns

It has been a long journey for the Scarabeo-9, Repsol and Cuba, a process shadowed at every step by warnings of a possible environmental debacle and decades of bad blood between Cuba and the US.

While comparable platforms sat idle in the Gulf of Mexico, the Scarabeo-9 spent months navigating through three oceans and around the Cape of Good Hope to arrive in the Caribbean at tremendous expense.

Even after the rig is in place, the embargo continues to affect just about every aspect.

The Scarabeo-9's blowout preventer, a key piece of machinery that failed in the 2010 Macondo-Deepwater Horizon disaster, is state of the art.

But its US manufacturer is not licensed to work with Cuba so replacement parts must come through secondary sources.

It is also more complicated to do things like the maintenance necessary to keep things running smoothly, and decrease the chances of something going wrong.

If it does, Cuba would be hard-pressed to respond to a major spill on its own. The embargo would require licenses to be issued for all manner of equipment and services for an emergency response.

"With any other country - Mexico, Canada or Russia - we would already have in place agreements between the coast guards of the two countries,'' said Dan Whittle, Cuba programme director for the Environmental Defence Fund.

"There would be contingency plans written and publicly available. There already would have been drills, a comprehensive action plan for responding to a spill.''

'Dramatically change'

The exact size of Cuba's offshore reserves, estimated at 5bn to 9bn barrels, is still unknown. Production would not come online for years, so any windfall is still on the horizon. 

Even so, island officials are hopeful of a big strike that could inject much-needed cash into their struggling economy.

"Cuba is going through its own change regardless of American foreign policy,'' said Dick Durbin, a US senator who met with Cuban officials in Havana this week on oil and other matters.

"This discovery, or potential discovery, of significant amounts of oil could dramatically change the economy of Cuba, and change the relationship with the United States in small ways and large,'' Durbin said while visiting Haiti on Thursday.

Source:
Agencies
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