Cuba: 3rd exploratory offshore well also a bust

Posted on Friday, 11.02.12

Cuba: 3rd exploratory offshore well also a bust
By PETER ORSI
Associated Press

HAVANA -- The third exploratory well drilled this year in deep waters
off Cuba has come up a bust, authorities announced Friday, in yet
another blow to the island's hopes of a petroleum windfall that could
boost its sagging economy.

Work on the well in the Gulf of Mexico off the western tip of Cuba, sunk
by key ally Venezuela's state oil company PDVSA, concluded Oct. 26,
according to a notice published by Communist Party newspaper Granma.

"Although this well does not offer possibilities for commercial
exploitation, the results obtained in the exploration will permit the
guidance and expansion of the operations on the blocs of Cuba's
Exclusive Economic Zone in the Gulf of Mexico," said the statement from
Cuban government oil concern Cubapetroleo.

Two other wells drilled this year, first by Spain's Repsol and then by a
subsidiary of Malaysia's Petronas and Russia's Gazpromneft, also failed
to strike black gold. Sonangol of Angola has an option to drill next.

Deepwater oil exploration is an inexact science and it is common for
exploratory wells to turn out to be dry or commercially nonviable. And
analysts say production is always at least three to five years out from
a confirmed strike.

Still, it was disappointing news for Cuba, where an estimated 5 billion
to 9 billion barrels of crude may lie deep below the Gulf of Mexico,
according to geologic surveys.

All three wells drilled this year were sunk by a massive, one-of-a-kind
semisubmersible platform, the Scarabeo-9, which was built with less than
10 percent U.S.-made parts to avoid triggering sanctions under
Washington's 50-year-old economic embargo on the island.

The Scarabeo is supposed to sail to Brazil soon to drill there, and it
is not clear when the rig might be available again for operations off Cuba.

In June, Russian company Zarubezhneft signed a contract to use a
different rig to drill in much shallower waters off Cayo Coco, one of
Cuba's leading tourist resort areas, beginning in late November.

Peter Orsi on Twitter: www.twitter.com/Peter-Orsi

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