U.S. Oil-Spill Experts to Visit Cuba

U.S. Oil-Spill Experts to Visit Cuba
By TENNILLE TRACY

U.S. oil-spill commission co-chief William K. Reilly is heading to Cuba
next week to help evaluate that nation's plans for developing its oil
resources, trip organizers say.

Lawmakers have raised concerns about potential oil spills as Cuba begins
offshore drilling, and oil-industry experts have pressed the Obama
administration to grant exemptions to the U.S. economic embargo against
Cuba in order to respond to spills.

The trip, which will involve a delegation of U.S. oil-drilling experts
and environmentalists, coincides with Cuba's effort to develop its
offshore-oil resources as a way to wean itself off imports from
Venezuela. U.S. officials believe Cuba's waters could contain more than
five billion barrels of undiscovered oil.

Cuba's efforts to tap its offshore oil will get off the ground later
this year, when a consortium led by Spanish company Repsol YPF S.A. is
expected to begin drilling a well in more than 5,500 feet of water off
the nation's northern coast. If Repsol finds oil, it could touch off a
quick-moving race to set up production in Cuban waters.

The delegation to Cuba, involving the International Association of
Drilling Contractors and the Environmental Defense Fund, is on a
fact-finding mission to determine the country's long-term plans for
pursuing its oil resources and identify steps to ensure safety and
environmental protection. They're scheduled to depart Monday.

The process of oil-drilling in thousands of feet of water is "inherently
risky," said Daniel Whittle, Cuba program director at the Environmental
Defense Fund and a member of the delegation. "We believe it's imperative
that if and when Cuba drills, they get it right."

Mr. Reilly, as co-head of President Barack Obama's National Commission
on the BP Deepwater Horizon Oil Spill and Offshore Drilling, helped to
draft a report earlier this year that recommended U.S. officials work
with Cuba and Mexico to develop shared standards for drilling in the
Gulf. The oil-spill commission ceased operations in March after
completing its work.

Cuba's effort to promote drilling in its waters is presenting a thorny
situation for U.S. lawmakers, regulators and companies.

Among the loudest critics of Cuba's plans are Gulf Coast lawmakers who
are raising questions about Cuba's ability to respond to oil spills and
the risks of crude oil washing on U.S. shores. Rep. Vern Buchanan, a
Florida Republican whose district faces the Gulf of Mexico, introduced a
bill earlier this year to allow the Interior secretary to deny U.S. oil
exploration and development leases to companies that do business with Cuba.

"The U.S. is not going to see a drop of that oil," said Max Goodman, a
spokesman for Rep. Buchanan. "And we have learned from Deepwater Horizon
that an oil spill can devastate a regional economy and pose long-term
damage to our natural resources."

Repsol will be drilling in waters that are deeper than those in which
the Deepwater Horizon rig operated at the time it exploded last year.
Repsol will be using a Chinese-built drilling rig that only recently
left Singapore for Cuban waters. The rig is expected to arrive in
November or December.

The rig, known as Scarabeo 9, was built to conform with the U.S.
embargo, and Repsol has said it would be following U.S. safety
standards, Repsol representative Kristian Rix said.

"We are confident that we have the right personnel and materials to
drill safely and successfully in the area," Ms. Rix said.

If oil is discovered, Cuba has a chance of becoming less dependent on
Venezuela for its energy needs. In 2009, the country produced roughly
50,000 barrels of oil a day from onshore and coastal wells, relying on
imports to supply an additional 130,000 barrels to meet consumption
levels, according to the Energy Information Administration.

Given the risks of an oil spill, oil and natural-gas experts are urging
the Obama administration to grant exemptions under the embargo to allow
U.S. companies and experts to respond to a disaster. U.S. companies,
such as Helix Energy Solutions, have been particularly aggressive in
developing oil-spill containment systems in the wake of the BP PLC spill.

Allowing U.S. companies and experts to respond to a Cuban spill would be
in the U.S.'s best interest, given the proximity of the drilling to U.S.
shores, said Jorge Pinon, former president of Amoco Oil Latin America
and visiting research fellow at Florida International University.

"There is an experienced company doing the work [in Cuba]," Mr. Pinon
said. "What we're lacking is, in the case of an emergency, Repsol and
the other operators will not be able to access the resources" in the U.S.

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