Russian oil company halts exploration off Cuba's coast

Miami Herald:

A Russian state oil company drilling off Cuba’s northern shores has reportedly confirmed that it is temporarily halting its exploration — the fourth disappointment for Cuba’s dreams of energy self-sufficiency in less than two years.

The announcement by Zarubezhneft signaled an end to the only active exploration program on the island, which now relies on highly subsidized oil from the beleaguered Venezuelan government of President Nicolas Maduro.

Zarubezhneft confirmed this week that it was halting work due to “geological” problems but added that it will resume its exploration next year, the Reuters news agency reported Thursday in a dispatch from Havana.

The Russians withdrawal had been expected because the Norwegian company that owns the drilling platform they have been leasing, the Songa Mercur, already had announced that it would be leaving Cuban waters in July for another contract.

Zarubezhneft’s confirmation, nevertheless, signals “another disappointment” for Cuba’s dreams of finding oil in its waters, said Jorge Pinon, a Cuba energy expert at the University of Texas in Austin.

The U.S. Geological Survey has estimated that Cuba’s offshore waters have “significant undiscovered conventional oil potential” — between 4.6 billion and 9.3 billion barrels. Cuban officials estimate the potential reserves at 20 billion.

“This is the second geological area in Cuba that … seemed to be promising,” Pinon said of Zarubezhneft’s exploration block. But finding the oil means “you have to go into your pocket to drill exploratory wells.”

Spain’s Repsol oil company spent $100 million in the early part of 2012 unsuccessfully exploring with the Scarabeo 9 drilling platform, especially built in China to avoid the restrictions of the U.S. embargo, in deep waters northwest of Havana.

Petronas of Malaysia, Russia’s Gazprom and Petroleos de Venezuela SA (PDVSA) later leased the Scarabeo platform but also struck out, and the rig left Cuban waters at the end of last year.

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The environmentalist are probably pleased as well as the Florida Chamber of Commerce.  The cuban communist have to be disappointed that they will not have their command economy bailed out with new energy prospects.   Cuba will continue to be a resource poor country ruled by an inept click of  control freaks.