President Barack Obama’s decision to normalize relations between the United States and Cuba may lead to more commercial opportunities for Americans within the island nation. But don’t expect U.S. oil producers to move swiftly to take advantage of them.
In 2012, two deep-water exploratory well in the Gulf of Mexico has proved busts. Cuba’s state oil company announced Monday, dealing another blow to the island’s dreams of petroleum riches.
The drilling operation carried out by PC Gulf, a subsidiary of Malaysia’s Petronas,
Analysis of the findings revealed an active petroleum system that could extend to other parts of the four blocs contracted by PC Gulf and Gazpromneft.
“Nevertheless, at that point the rocks are very compact and do not have the capacity to deliver significant quantities of petroleum and gas,” it continued, “so it cannot be qualified as a commercial discovery.”
Exploratory wells commonly turn out to be dry or not viable, and experts say production was always at least three to five years out from any confirmed strike.
An estimated 5 billion to 9 billion barrels of crude may be buried off Cuba deep below the Gulf of Mexico, according to geologic surveys, and authorities are hoping the reserves could be even bigger.
Cubapetroleo said PC Gulf and Gazpromneft will study the geologic information gained from drilling the 15,300-foot (4,666-meter) well to evaluate the potential of other parts of the four blocs they have contracted.
Ultradeep-water drilling is technologically challenging and extremely costly, with the platform that drilled out the two wells this year being leased out at $500,000 a day. The US embargo means that exploratory ocmpanies like Repsol and Petronas had to turn to the Scarabeo-9, a one-of-a-kind vessel built with less than 10 percent U.S.-made parts to avoid triggering sanctions.
After Repsol opted out of a contract to sink a second well and Monday’s announcement of Petronas’ failed try, the massive semisubmersible now passes to Venezuelan state oil company PDVSA for an attempt near the island’s western tip.
Sonangol of Angola has an option to drill next, but after that the Scarabeo-9 is under contract to drill off Brazil with no word on when it might again be available to return to Cuban waters.
Russian company Zarubezhneft signed an $88 million, 325-day contract with Songa Offshore SE of Cyprus to rent out the Songa Mercur drilling rig for exploration off Cayo Coco, one of Cuba’s leading tourist resort areas.
But that bloc in the Bahamas Channel is relatively shallow, and Pinon said the Songa Mercur is not capable of the kind of ultradeep drilling required in the Gulf of Mexico, where nearly all Cuba’s offshore exploration zones lie.
If the US embarg is lifted in the next year, maybe oil companies will begin again with a freer hand.
