New drilling off Cuba may pose more risk to Florida

Posted on Friday, 07.06.12

New drilling off Cuba may pose more risk to Florida
By David Goodhue
dgoodhue@keysreporter.com

New oil drilling expected to begin offshore of Cuba at the end of the
summer is at least 50 miles farther away from Key West than a well that
came up dry in May.

But industry watchers say the drilling sites' location in the Gulf of
Mexico pose more of an environmental threat to the Keys and other
coastal areas of the U.S. than did the well that was only 70 miles away
from Key West in the Florida Straits.

"National Oceanic and Atmospheric Administration models of spill
scenarios indicate the obvious: The further west from the Keys, the
greater the potential exposure of the Keys and western Florida to oil
reaching the U.S. coast. This is much like NOAA's hurricane prediction
cone," said Lee Hunt, president of the International Association of
Drilling Contractors.

Spanish oil company Repsol was the first of several international firms
to begin drilling the waters off Cuba for oil on a Chinese-built,
Italian-owned giant semi-submersible rig called the Scarabeo 9. The rig
was built with less than 10 percent of its parts made in the United
States, meaning companies that work on it are not violating the
52-year-old U.S.-imposed trade embargo against Cuba.

The Scarabeo's pending arrival angered environmentalists and tourism
officials who were worried what a massive oil spill would do to coastal
states' environment and economy. It also angered critics of Cuba, who
were concerned a big oil find would make the small Communist island a
major energy exporter.

But not only did Repsol not find enough oil to continue its $100 million
operation, the company also willingly let U.S. inspectors board the rig
when it was in Trinidad and Tobago before it arrived in Cuban waters.
Repsol also conducted tabletop exercises with U.S. authorities in
Trinidad and Tobago on how to coordinate an oil spill response and
containment plan in case of an oil well blowout, said Jorge Piñon, a
research fellow at the University of Texas' Center for International
Energy and Environmental Policy.

Malaysian company Petronas is now using the rig in partnership with
Gazprom, from Russia. That lease is scheduled to end at the end of this
month, the Associated Press reported.

But the next company to use the Scarabeo 9 is Petroleos de Venezuela, or
PDVSA. PDVSA is a state-owned company run by the government of Hugo
Chavez, which has a hostile relationship with the United States.

Piñon said the U.S. is not likely to enjoy the same cooperation with
PDVSA as it did when dealing with Repsol. Petronas is also a state-owned
company. Piñon doubts members of the U.S. Coast Guard and other federal
agencies have the same open line of communication with its
representatives as they had with Repsol managers. He also doubts the
same types of contingency plans in place between the Coast Guard and
Repsol exist with Petronas, or will be made with PDVSA.

"Repsol was a publicly traded company, so we expected them to behave the
way they did. Both Petronas and PDVSA are national, state-owned oil
companies," Piñon said. "What role would sovereign immunity play in
their response and financial compensation to Florida residents in the
event of an oil spill?"

Cuba believes its coastal waters in the Florida Straits and the Gulf of
Mexico contain up to 20 billion barrels of oil. The U.S. Geological
Survey estimates a much more conservative 5 billion barrels.

Drilling for oil there is particularly risky because wells are believed
to be up to 6,000 feet below the ocean. The British Petroleum Deepwater
Horizon spill in 2010, the worst in U.S. history, happened at 5,000 feet
below the ocean surface.

Meanwhile, on the northeastern coast of Cuba, another Russian company,
Zarubezhneft, is expected to start drilling for oil in about 1,200 feet
of water near the maritime border with the Bahamas. That operation is
scheduled to begin in November on a Norwegian-Cypriot-owned rig called
the Songa Mercur.

http://www.miamiherald.com/2012/07/06/2884309/new-drilling-off-cuba-may-pose.html