Russian drilling rig latest to pull out of Cuban waters

Russian drilling rig latest to pull out of Cuban waters

Published on April 20, 2013

By Jeffrey Todd

Nassau Guardian Business Editor



NASSAU, Bahamas -- Amid crucial repairs to the drilling apparatus, the

Russian oil rig located just 100 kilometers (62 miles) from the Bahamian

border plans to pack up and leave by June 1.



In a release by Songa Offshore, crews are evaluating "shear ram

malfunctions and technical inspection of connector bolts in accordance

with manufacturer's instructions".



"The campaign in Cuba ends June 1, and the rig will thereafter be

demobilized back to Asia where the rig is actively marketed," the

release stated. Songa Offshore is the drilling equipment company working

under contract for JSC Zarubezhneft, a Russian-based oil company in Cuba.



Jorge Pinion, research fellow at the Center for International Energy and

Environmental Policy at the University of Texas, said that signs out of

Cuba right now are "disappointing".



Pinion is also the former president of Amoco Oil in Mexico and Latin

America and a well-known industry insider for the region.



"Time is running out. Based on the announcement by Songa Offshore and

the lack of other news out of Cuba, I would say it's disappointing," he

told Guardian Business yesterday.



The analyst noted that "any news of out Cuba will have an important

impact" on what happens in The Bahamas. While the two are not

inextricably linked, executives from the Bahamas Petroleum Company (BPC)

are keenly watching events unfold just 100 km from its proposed

exploratory drill site. Success in Cuba, where it has failed to discover

commercially viable quantities of oil before, would be the best

indication yet that The Bahamas has oil.



"That would create momentum that will carry on in the public and for

Bahamian authorities," Pinion stated.



Simon Potter, the CEO of BPC, recently attended a conference in Havana

on oil exploration and made a presentation.



He stated in the company's annual report, released this week, that

repairs are ongoing to "critical equipment", which have constrained the

drilling process.



This repair process, combined with a June 1 deadline for the rig, could

make successful operations difficult in Cuba.



However, there are other indications that drilling activities are moving

forward with some success.



According to a leading publication in Latin America, the Russian company

has opened an office in Havana to ramp up the possible production of oil

and natural gas reserves.



Back in February, Russian Prime Minister met with Cuban leaders and

agreed to "write-off" around $30 million in debt. The leaders also

sought to strengthen economic ties.



In The Bahamas, government has given the apparent green light for an

exploratory drill sometime in the next 12 to 18 months. Officials are

getting ready to present new legislation that would impose a regulatory

framework for the possible industry.



Republished with permission of the Nassau Guardian"



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