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

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.

Cuba has said it could have 20 billion barrels in its offshore fields.
It needs the oil to end its dependence on Venezuela, which ships it
114,000 barrels a day.

Cancer-stricken Venezuelan President Hugo Chavez is Cuba's top ally, but
island leaders worry that the oil flow could stop if he dies or loses
his bid for re-election later this year.

The U.S. Geological Survey estimated Cuba may have 5 billion barrels of
oil and 10 trillion cubic feet of natural gas offshore, but its study
covered only part of the Cuban zone.

Various sources said Repsol has been encouraged by its findings thus
far, but the company has said results will not be known until the well
is finished and studies are conducted.

Oil experts say it will take three years or more to bring the Cuban oil
on line, if enough is found to justify production.

After Repsol completes its well, it will hand the Scarabeo 9 drilling
rig over to Malaysia's state-owned Petronas and its Russian partner
Gazprom Neft for a second well.

Then it will go back to Repsol, which has a consortium with Norway's
Statoil and ONGC Videsh, a unit of India's ONGC, for another well.

The massive, Chinese-built rig, which is more than 20 miles (32 km)
offshore but visible from Havana, is being leased from owner Saipem, a
unit of Italian oil company Eni .

Due to the longstanding U.S. trade embargo against Cuba, no American oil
companies are involved in the project.

Repsol drilled a well in Cuban waters in 2004 and found oil, but said it
was not commercially viable. Technological limitations imposed by the
embargo made it difficult to find another rig for work in Cuba, industry
sources have said.

The project has raised environmental concerns in the United States,
particularly in Florida, which is 90 miles (145 km) north of Cuba and
fears its shores could be damaged if there is an accident similar to the
BP oil spill in the Gulf of Mexico in 2010. (Editing by Eric Walsh)

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