Spain company backs out of Cuba drilling after dry hole

Miami Herald:
Spain’s Repsol oil company announced Tuesday it was “almost certain” to withdraw from exploration in Cuba, after spending an estimated $150 million on a dry well and seeing far more profitable prospects in other countries such as Brazil and Angola.
The announcement was a blow to Cuba’s hopes to strike it rich quickly, jump-start its stagnant economy and trim its dependence on Venezuelan subsidies, although another foreign company is currently drilling a separate test well and others have options to follow.
“We won’t do another well” in Cuba, Repsol Chairman Antonio Brufau said in presenting the company’s 2012-16 business strategy at a news conference in Madrid on Tuesday. “The well we drilled turned out dry and it’s almost certain that we won’t do any more activity there.”
Repsol spent about $150 million since 2000 exploring off Cuba’s northern coast near Havana, with one well in 2004 that did not find oil “in commercial quantities” and one this year that was dry, said Jorge Piñón, a longtime Cuba oil analyst with the University of Texas.
Its combine with Statoil of Norway and ONGC of India also has an option to drill a third well later this year but clearly felt its money would be better spent in other countries with more profitable opportunities, Piñón told El Nuevo Herald.
“If you had $100 in your pocket, and I offer you Cuba, Brazil or Angola, which one would you take?” he said. “There are many other places around the world much more attractive to exploration.”
Piñón said the two bad wells are not realistic indications of whether Cuba in fact has crude deposits off its northern coast. The U.S. Geological Service has estimated the area has five billion barrels of crude, while Cuban officials have put the figure at 20 billion barrels.
But Repsol’s withdrawal raised the critical question of how offshore exploration in Cuba can continue when only one platform in the world, Scarabeo-9, can operate there. The platform was built in Asia with less than 10 percent of U.S. equipment to sidestep Washington’s embargo on the communist government.

Read more here:
After the dry holes the US Geological Service may need to reassess  the area's potential.  If Cuba was willing to have free and fair elections it probably also would not be stuck with just one potential drilling platform.  If Florida were not so goofy about offshore wells and the Democrats would get out of the way, we could probably find out what the real potential of the area is.


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