Maggie Alarcón

Cuba-Repsol Oil Operation Threatened

In Cuba, Cuba/US, Cuban Americans, Cuban Embargo, Economics, Environment, History, Miami/Cuba, Politics, US on December 20, 2011 at 2:29 pm
 
 
From the HAVANA TIMES, Dec 20 —
 
The possibility of Cuba becoming an oil-producing country is worrying politicians in the US. They have therefore begun putting pressure on those firms operating in Cuban waters, particularly the Spanish corporation Repsol, which will be the first to start drilling.
 
While Washington says it’s afraid of an oil spill, Cuban-American lawmakers are complaining that oil finds could strengthen the Castro government, and US oil companies are alarmed by the idea of drilling competition 60 miles off their shores.
 
For years there was speculation that Cuban waters could possess deep underwater oil reserves and, paradoxically, the confirmation of this came from the US.
 
A study carried out in 2004 by the US Geological Service claimed that the Gulf area belonging to Cuba had oil reserves estimated at 4.6 billion barrels, in addition to 2.8 billion cubic meters of natural gas and 900 million barrels of liquid natural gas.
Cuban sources now claim there are actually five times more than what the Americans identified.
 
Cuba parceled its 112,000 square kilometers of offshore Gulf waters into 59 blocks and signed exploration contracts with various oil companies, which will take a percentage of any oil discovered or lose their investment if they fail to find exploitable deposits.
 
The investments are huge, while exploration requires working at a depth of 1,700 meters with sophisticated and expensive technology. An aggravating factor is that to avoid a legal problem with the United States, no oil rig can have more than 10 percent of its components made in the USA, according stipulations in Washington’s 50-year economic embargo against Cuba.
 
Repsol is the leading company working in the area and will start drilling early next month from its Scarabeo 9 platform, manufactured especially for Cuba taking into account the constraints imposed by the US.
 
Other companies are waiting in line to use that platform in the exploration of their own blocks. Operating costs are so high that for oil companies to invest, they must have prior evidence that they will find exploitable reserves.
 
Cuban-American representatives in the US Congress rapidly began pressuring Repsol and other oil companies. Thirty-four federal lawmakers, led by Miami Republican Rep. Ileana Ros-Lehtinen, demanded that the project be halted.
 
They claimed that discoveries would only serve to “finance the repressive apparatus,” arguing that the Cuban government is looking for an “economic lifeline” while accusing Repsol of being a “partner ready to rescue it.”
 
Since this political offensive didn’t work, they returned to the attack by questioning the safety of the operation, given the catastrophe impact an oil spill would have on the coast of Florida.
 
In response, a group of US experts (led by William Reilly, the co-chair of the commission investigating last year’s BP spill in the Gulf) was invited to the island this past September. He was accompanied by Daniel Whittle, from the Environmental Defense Fund; and Lee Hunt, from the International Association of Drilling Contractors. The three were “optimistic,” stressing the willingness of Cuban experts to cooperate with the US and recognizing Repsol’s experience in this kind of operation.
 
Michael Bromwich, the head of the US Office of Environmental Safety, assured that “the exploration plan by Repsol-YPF is sensitive to the political and environmental issues of the US, which wants to protect the Florida coast from any oil spill while complying with the embargo against Cuba.”
 
He added that Washington is preparing licenses [to get around the blockade] so that US companies can “deploy equipment for collecting oil, dispersants, pumps and other equipment and supplies needed to minimize environmental damage in the event of a spill.”
 
As the blockade seeks to “weaken Cuba’s economy,” the discovery of reserves would neutralize that attempt.
 
Therefore, Cuban-American politicians are not giving up on their efforts. They presented a bill that would punish foreign oil firms if there were a spill.
 
Senator Bob Menendez, one of the bill’s sponsors, explained the purpose of this, saying, “Companies that want to drill in Cuban waters will have to think twice if they know they’ll be held responsible for any damage to the Florida Keys.”
 
On its website, Repsol says that it’s complying with “all technical requirements and any limitations established by the US government for oil drilling operations in Cuba.” In addition, the firm invited US experts to inspect areas outside of Cuban waters, the mobile platform, the tanker and the rig.
 
Informally, some officials on the island maintain that behind the expressed American “concerns” there hides the continued policy of economic siege.
 
Rafael Arias, the director of the Cuban oil company Cupet, stresses that these maneuvers also reveal “the extraterritoriality of the blockade, the existing prohibitions in the US Congress and the pressure and blackmail being exerted by the US government to curtail or prevent other countries or companies from doing business with Cuba.”
 
The Cuban fears are not simple paranoia. For five decades the island has suffered an embargo aimed at “weakening the economic life of Cuba,” according to documents from the US government itself.
 
These point out that the purpose is to deprive the island of “money and supplies, to reduce financial resources and real wages, to cause hunger and desperation, and to overthrow the government.”
 
Such a policy of hounding and harassment would be impossible to sustain if there were significant oil and gas reserves on the island. The economy would pick up even before the first barrel was pumped out, immediately improving the lives of Cubans.
 
A recent report by the Spanish Embassy indicated that if the survey results are positive, “The favorable consequences for Cuba would begin to be felt from that very moment and could be powerful.”

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