Repsol moving ahead with Cuba oil plans

Repsol moving ahead with Cuba oil plans
Tue Apr 5, 2011 10:07pm GMT
* Repsol says big oil fields possible offshore Cuba
* PDVSA also cites "great potential" in Cuba blocks
* Cuba says may have 20 billion barrels offshore
By Jeff Franks

HAVANA, April 5 (Reuters) - Repsol YPF (REP.MC: Quote) expects to have a
Chinese-built drilling rig in Cuban waters by the end of the summer and
start drilling immediately into a prospective undersea oil field that
looks like it could be a big one, a geologist for the Spanish oil
company said on Monday.

Repsol, in a consortium with Norway's Statoil (STL.OL: Quote) and a unit
of India's Oil and Natural Gas Corp. (ONGC.BO: Quote), plans to drill
one well with the high-tech Scarabeo 9 rig and another if the first is
successful, said senior structural geologist Gonzalo Zamora at Cuba's
Earth Sciences Summit in Havana.

"The perspectives are to find something, if not, we wouldn't be
drilling. And the sizes are big," he told reporters after making a
presentation at the conference that is heavily focused on Cuba's oil and
gas development.

"To drill with so much risk like we have in Cuba, we have to look for a
big prospect because the investment to develop it is very big," Zamora said.

He said seismic studies of the offshore blocks Repsol has leased have
turned up "very interesting prospects" in several geological zones. The
company drilled the only well in Cuba's offshore in 2004 and found oil
in an "area of much potential," Zamora said.

It has not sunk a second well for various reasons, but contracted with
Italian offshore oil services company Saipem for use of its Scarabeo 9
rig, which has been built in China and is now in Singapore undergoing
preparations for the trip to Cuba.

Zamora was expected to arrive in Cuba by the end of the summer, but
delays were always possible in the offshore oil business. Sources have
told Reuters the rig should arrive at the communist-led island by mid to
late August.

He said Cuba, which is anxious to tap into its unexplored sector of the
Gulf of Mexico, wanted Repsol to commit to drilling two wells, but
Repsol limited its risk by agreeing to do one well for sure.

Cuba has said it may have 20 billion barrels of oil offshore, although
the U.S. Geological Survey has estimated a more modest 5 billion barrels.

After Repsol finishes with the Scarabeo 9, which is capable of drilling
in 12,000 feet (3,657 meters) of water, the rig will be handed over to
Malaysia's Petronas to drill in its Cuban offshore leases, then to ONGC
Videsh, which is a unit of ONGC, for its Cuba exploration.

Venezuela's PDVSA may also be in line to get the rig for its Cuban
blocks, where areas of "great potential" have been found, PDVSA senior
basin analyst Jose Noya told reporters at the conference.

He said exploratory drilling could take place "maybe in a year."

"Once we have the equipment, it will be drilled. Probably we are in the
line for drilling ... with the same rig, because it is a rig that can
drill in 2,000 meters (of water)," he said of the Scarabeo 9.

Last summer, Cuban officials were saying they expected to drill seven
wells, but Cuban senior oil adviser Manuel Marrero told the conference
that the number now was five. He did not specify who would drill the
wells. (Editing by David Gregorio)

http://af.reuters.com/article/energyOilNews/idAFN0515006720110405?sp=true